Accounting Policies of Hindoostan Mills Ltd. Company

Mar 31, 2018

Note 1: Significant Accounting Policies Accounting Judgements , Estimates and Assumptions:

Significant Accounting Policies:

1.1 Basis of preparation of Ind-AS Financial Statements:

The Ind-AS financial statements of the Company have been prepared in accordance with the relevant provisions of the Companies Act, 2013, the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with the Companies (Indian Accounting Standards) Amendment Rules, 2017 and the Guidance Notes and other authoritative pronouncements issued by the Institute of Chartered Accountants of India (ICAI).

For all periods up to and including the year ended 31^st March 2017, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended).Thesefinancialstatementsfortheyearended 31^st March 2018 are the first the Company has prepared in accordance with Ind-AS. Refer to Note No.33 (XVII) for information on how the Company adopted Ind AS, including the details of the first time adoption exemptions availed by the company.

The Ind-AS financial statements have been prepared on a historical cost basis, except for certain financial assets and financial liabilities measured at fair value (refer accounting policy no. 2.9 regarding financial instruments). Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

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

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

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

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

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

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

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

1.2 Current and Non-Current Classification of Assets and Liabilities and Operating Cycle:

An asset is considered as current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle,

- Held primarily for the purpose of trading,

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

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

All other assets are classified as non-current.

A liability is considered as current when:

- It is expected to be settled in normal operating cycle,

- It is held primarily for the purpose of trading,

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

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

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

The Operating Cycle is the time between the acquisition of assets for business purposes and their realisation into cash and cash equivalents.

1.3 Property, Plant and Equipment:

Property, Plant and Equipment are recorded at their cost of acquisition, net of refundable taxes or levies, less accumulated depreciation and impairment losses, if any. The cost thereof comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost for bringing the asset to its working condition for its intended use.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Profit or Loss when the asset is derecognised.

Machinery Spares which can be used only in connection with a particular item of Fixed Asset and the use of which is irregular, are capitalised at cost. The cost thereof comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost for bringing the asset to its working condition for its intended use.

For transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognised as on 1^st April, 2016 (date of transition) measured as per previous GAAP as its deemed cost on the date of transition.

1.4 Investment Property

Investment Property is recorded at its cost of acquisition, net of refundable taxes or levies, less accumulated depreciation and impairment loss, if any. Depreciation on Investment Property is provided over its useful life using the Straight Line Method as per Schedule II of the Companies Act, 2013.

For transition to Ind AS, the Company has elected to continue with the carrying value of investment Property recognised as on 1^st April, 2016 (date of transition) measured as per previous GAAP as its deemed cost on the date of transition.

1.5 Depreciation:

Depreciation on Property, Plant and Equipment and Investment Properties is provided on different class of assets based on the method and on the basis of its useful lives as per Schedule II of the Companies Act, 2013/expected pattern of usage and exploitation, as indicated below:

(a) Textile unit:

Depreciation on Plant and Machinery is provided on Straight Line Method. Depreciation on Assets other than Plant and Machinery is provided on Written down value Method.

Costs of Reeds are amortized over a period of 2 years.

Cost of Imported Heald frames are amortized over a period of 5 years and Domestic Heald frames over a period of 3 years.

(b) Engineering unit:

Depreciation on Fixed Assets is provided on Straight Line Method for Assets acquired upto March 31, 2001. However, due to a change in the expected pattern of exploiting the assets, the depreciation on Fixed Assets acquired on or after April 1, 2001 is provided on Written down value Method.

(c) Composite unit:

i. Depreciation on Plant and Machinery is provided on Straight Line Method.

ii. Depreciation on Fixed Assets other than Plant and Machinery is provided on Written down value Method.

(d) Depreciation on additions to Fixed Assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

(e) Depreciation on Assets sold, discarded, demolished or scrapped, is provided upto the date on which the said Asset is sold, discarded, demolished or scrapped.

(f) Cost of Leasehold Land and Improvement is written off over the period of Lease.

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

1.6 Capital Work in Progress and Capital Advances:

Costs incurred for acquisition of capital assets outstanding at each balance sheet date are disclosed under capital work-in-progress. Advances given towards the acquisition of fixed assets are shown separately as capital advances under the head Other Non-Current Assets.

1.7 Intangible Assets and amortisation thereof:

The cost relating to Intangible assets, with finite useful lives, which are capitalised and amortised on a straight line basis over a period of ten years, are based on their estimated useful lives.

An item of Intangible Asset is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Profit and Loss when the asset is derecognised.

The residual values, useful lives and methods of amortisation of Intangible Assets are reviewed at each financial year end and adjusted prospectively, if appropriate.

For transition to Ind AS, the Company has elected to continue with the carrying value of all its Intangible Assets recognised as on 1^st April, 2016 (date of transition) measured as per previous GAAP as its deemed cost on the date of transition.

1.8 Impairment of Property Plant and Equipment, Investment Property and Intangible Assets Carrying amount of tangible and intangible assets are reviewed at each Balance Sheet date. These are treated as impaired when the carrying cost thereof exceeds its recoverable value. Recoverable value is higher of the asset’s net selling price or value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount receivable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the cost of disposal. An impairment loss is charged for when an asset is identified as impaired.

The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.9 Inventories:

Inventories of Raw Materials, Work-in-Progress, Stores and spares, Finished Goods, Stock-in-trade and Property under development are stated ‘at cost or net realisable value, whichever is lower’. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are ‘First-in-First-out’, ‘Weighted Average cost’ or ‘Specific identification’, as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary.

1.10 Revenue Recognition:

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

i. Sale of Goods:

- Revenue from Domestic sale is recognised on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

- Revenue from Export sale is recognised on transfer of significant risks and rewards of ownership based on terms of the contracts.

ii. Other Operating Revenue:

- Export Incentive under various scheme are accounted in the year of Export.

- Revenue in respect of other income/ claims, etc is recognised only when it is reasonably certain that ultimate collection will be made.

iii. Rental Income:

Rent income is recognised on accrual basis as per substance of the agreement.

iv. Interest Income:

Interest Income from Financial Assets is recognised using the Effective Interest Rate (EIR) on amortised cost basis.

v. Dividend Income:

Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend.

1.11 Accounting for Government Grants:

Grant from Government under Technology Up-gradation Fund Scheme (TUFS) is recognised and disclosed under Other Operating Income at fair value where there is reasonable assurance that the grant will be received and the Company will comply with all attached condition.

1.12 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial Assets:

Initial Recognition and Measurement:

All financial assets are recognised initially at fair value.In the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset are included therein.

Subsequent Measurement:

For purposes of subsequent measurement, financial assets are classified in three categories:

- Financial assets at amortised cost

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

- Investments measured at fair value through Profit & Loss (FVTPL)

Financial Assets at Amortised Cost:

A financial asset is measured at the amortised cost if both the following conditions are met:

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

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

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR.

Equity Instruments at FVTOCI:

For equity instruments not held for trading, an irrevocable choice is made on initial recognition to measure it at FVTOCI. All fair value changes on such investments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit or loss, even on sale or disposal of the investment. However, on sale or disposal the company may transfer the cumulative gain or loss within equity.

Financial Assets at FVTPL Even if an instrument meets the two requirements to be measured at amortised cost or fair value through other comprehensive income, a financial asset is measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as “accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. All other financial assets are measured at fair value through profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s statement of

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

ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘‘pass-through’’ arrangement and either;

a. the Company has transferred substantially all the risks and rewards of the asset,

or

b. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk

ii) Financial Liabilities:

Initial Recognition and Measurement:

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.

Subsequent Measurement:

This is dependent upon the classification thereof as under:

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition:

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

(iii) Equity Instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity in accordance with the substance of the contractual arrangements. These are recognised at the amount of the proceeds received, net of direct issue costs.

1.13 Employee Benefits:

Short term employee benefits are those which are payable wholly within twelve months of rendering service and are recognised as an expense at the undiscounted amount in Statement of Profit and Loss of the year in which the related service is rendered.

Contribution paid/ payable for the year to Defined Contribution Retirement Benefit Plans is charged to Statement of Profit and Loss

Liabilities towards Defined Benefit Schemes viz. Gratuity benefits and other long term benefit viz. compensated absences are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the Balance Sheet date. Actuarial gains and losses are recognised immediately in the Balance Sheet with a corresponding effect in the Statement of Other Comprehensive Income. Past service cost is recognised immediately in the Statement of Profit and Loss.

1.14 Leases:

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

As a Lessee:

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership is classified as a finance lease.

Finance lease is capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term, unless the payments are structured to increase in line with the expected general inflation to compensate the lessor.

As a lessor:

Lease in which the Company does not transfer substantially all the risks and rewards of ownership of an asset is classified as operating lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Lease is classified as finance lease when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amount due from lessee under finance lease is recorded as receivables at the Company’s net investment in the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

1.15 Foreign Currency Transactions:

Transactions in foreign currencies are initially recorded at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised as income or expenses in the period in which they arise.

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

1.16 Borrowing Costs:

Borrowing costs comprising of interest and other costs that are incurred in connection with the borrowing of funds, that are attributable to the acquisition or construction of qualifying assets are considered as a part of cost of such assets less interest earned on the temporary investment. 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 Statement of profit and loss in the year in which they are incurred.

1.17 Taxes on Income:

Current Income Taxes:

Current income tax liabilities are measured at the amount expected to be paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognised directly in other comprehensive income / equity is recognised similarly and not in the statement of profit and loss.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Taxes:

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

Deferred tax liabilities are recognised for all taxable temporary differences, when the deferred tax liability arises from an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except, when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

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

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

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

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities.

MAT:

Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which give rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the specified years. Accordingly, MAT is recognised as deferred tax asset in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefits associated with it will flow to the Company.

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.

When the Company expects part or entire provision to be reimbursed, the same is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. 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 recognised as a finance cost. A Contingent Liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of enterprise or a present obligation that arises from past events that may, but probably will not, require an outflow of resources.

Both provisions and contingent liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the Financial Statements.

1.19 Earnings Per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events including a bonus issue, bonus element in right issue to existing shareholders, share split, and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.20 Cash and Cash Equivalent:

Cash and cash equivalent for the purpose of Cash Flow Statement comprise cash at bank and in hand and short term highly liquid investments which are subject to insignificant risk of changes in value.

1.21 Statement of Cash Flow

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.22 Commitments

Commitments are future liabilities for contractual expenditure. The commitments are classified and disclosed as follows:

(a) The estimated amount of contracts remaining to be executed on capital account and not provided for; and

(b) Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of the Management.

1.23 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The Board of Directors of the Company has been identified as being the Chief Operating Decision Maker (CODM) by the management of the Company. CODM for management purposes organises the Company into business units based on its products and services and has three reportable segments. Information about reportable segments & principal activities are mentioned in Note No 33 XII.

1.24 Significant Accounting Judgements, Estimates and Assumptions:

The preparation of Financial Statements is in conformity with the recognition and measurement principles of Ind AS which requires the management to makejudgements for estimates and assumptions that affect the amounts of assets, liabilities and the disclosure of contingent liabilities on the reporting date and the amounts of revenues and expenses during the reporting period and the disclosure of contingent liabilities. Differences between actual results and estimates are recognized in the period in which the results are known/ materialize.

Estimates Assumptions and Judgements:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

a) Estimation of current tax expense and deferred tax:

The calculation of the Company’s tax charge necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these items may give rise to material profits/losses and/ or cash flows. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

b) Recognition of deferred tax assets/ liabilities:

The recognition of deferred tax assets/liabilities is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, reference is made to the latest available profit forecasts.

c) Estimation of Provisions & Contingent Liabilities: The Company exercises judgement in measuring and recognising provisions and the exposures to contingent liabilities which is related to pending litigation or other outstanding claims. Judgement is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in this evaluation process, actual liability may be different from the originally estimated as provision.

d) Estimated useful life of Property, Plant and Equipment:

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life, its expected usage pattern and the expected residual value at the end of its life. The useful lives, usage pattern and residual values of Company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology etc.

e) Estimation of Provision for Inventory:

The Company writes down inventories to net realisable value based on an estimate of the realisability of inventories. Write downs on inventories are recorded where events or changes in circumstances indicate that the carrying value may not be realised. The identification of write-downs requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the periods in which such estimate has been changed.

f) Estimation of Defined Benefit Obligation:

The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for post employment plans include the discount rate. Any changes in these assumptions will impact the carrying amount of such obligations. The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit obligations. In determining the appropriate discount rate, the Company considers the interest rates of government bonds of maturity approximating the terms of the related plan liability.

g) Estimated fair value of Financial Instruments.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Management uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

1.25 Standards issued but not yet effective

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and there is no impact on the company’s financial statements due to the said changes. Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The Company is evaluating the impact thereof.

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Mar 31, 2017

I. Basis of Preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with rule 7 of the Companies (Accounts) Rules, 2016, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

II. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of Assets and Liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognized in the year in which the results materialize/ are known.

III. Property, Plant and Equipment (Fixed Assets) and Intangible Assets:

1. Tangible Assets

i. Tangible Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed) and Borrowing Costs, if any.

ii. Machinery Spares which can be used only in connection with a particular item of Fixed Asset and the use of which is irregular, are capitalized at cost (net of Modvat / Cenvat credit availed)

2. Intangible Assets

Intangible Assets are recognized only if it is probable that the future economic benefits that are attributable to the Assets will flow to the enterprise and the cost of the assets can be measured reliably. The Intangible Assets are recorded at cost and are carried at cost less amortization and accumulated impairment losses, if any.

3. Assets taken on Lease:

i. Finance Lease

Assets taken on Finance Lease after April 1, 2001 are accounted for as Fixed Assets in accordance with the Accounting Standard -19 “Lease” (AS 19) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016. Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

ii. Operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

IV. Depreciation/ Amortization:

(Refer Note 27B Point no. VI regarding Fixed Assets and

Depreciation)

A. Tangible Assets

1. Textile Unit:

i. Depreciation on Plant and Machinery is provided on Straight Line Method.

ii. Depreciation on Assets other than Plant and Machinery is provided on Written down value Method.

iii. Costs of Reeds are amortized over a period of 2 years.

iv. Cost of Imported Heald frames are amortized over a period of 5 years and Domestic Heald frame over a period of 3 years.

2. Engineering Unit:

i. Depreciation on Fixed Assets is provided on Straight Line Method for Assets acquired upto March 31, 2001.

ii. Depreciation on Fixed Assets is provided on Written down value Method for Assets acquired on or after April 1, 2001.

3. Composite Unit:

i. Depreciation on Plant and Machinery is provided on Straight Line Method.

ii. Depreciation on Fixed Assets other than Plant and Machinery is provided on Written down value Method.

4. Depreciation on additions to Fixed Assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

5. Depreciation on Assets sold, discarded, demolished or scrapped, is provided upto the date on which the said Asset is sold, discarded, demolished or scrapped.

6. Cost of Leasehold Land and Improvement is written off over the period of Lease.

B. Intangible Assets.

Intangible Assets are amortized in accordance with Accounting Standard 26 “Intangible Assets” (AS-26) issued by the Institute of Chartered Accountants of India and prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016.

V. Investments:

Long term Investments are stated at cost less diminution in the value of Investments, if any. Current Investments are stated at cost or market value whichever is lower.

VI. Inventories:

1. Textile Unit:

i. Raw Materials :

At monthly weighted average cost.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished Goods :

At quarterly weighted average cost or net realizable value whichever is lower.

2. Engineering Unit:

i. Raw Materials :

At cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished goods :

Finished Goods are valued at lower of cost or net realizable value.

3. Composite Unit:

i. Raw Materials :

At cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished Goods :

At cost or net realizable value whichever is lower.

Cost comprises of cost of materials, employee cost, factory overheads and other costs incurred in bringing the inventory to their present location and condition.

VII. Employee Benefits:

1. Defined Contribution Plan:

Employee Benefits in the form of contributions to Provident Fund, Employees State Insurance, Labour Welfare Fund managed by Government Authorities are considered as defined contribution plan and the same is charged to the Statement of Profit and Loss for the year on accrual basis.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defined Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

2. Defined Benefit Plan:

The liability for Leave Encashment and Gratuity is determined on actuarial basis as per the Accounting Standard-15 “Employee Benefits” (AS 15) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016.

VIII. Foreign Currency Transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are effected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring Fixed Assets are adjusted in the carrying amount of the respective Fixed Assets. Exchange differences arising on settlement of other transactions are recognized in the Statement of Profit and Loss.

Monetary items (other than those related to acquisition of imported Fixed Assets) denominated in foreign currency and not covered by forward contracts are restated using the exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recognized in the Statement of Profit and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / Discount arising on such forward exchange contract is amortized as income / expense over the life of the contract. Any profit / loss arising on cancellation of such forward exchange contract are recognized as income or expense.

IX. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

X. Revenue Recognition:

1. Revenue from Domestic sale is recognized on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

2. Revenue from Export sale is recognized on transfer of significant risks and rewards of ownership based on Bill of lading date.

3. Dividend income is recognized when the right to receive dividend is established.

4. Revenue in respect of other income/claims, etc is recognized only when it is reasonably certain that ultimate collection will be made.

XI. Government Grants:

Grants are accounted for when it is reasonably certain that ultimate collection will be made.

XII. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on “Accounting for Taxes on Income” (AS-22) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognized for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

XIII. Accounting of Value Added Tax (VAT):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

XIV. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying Assets are capitalized as part of the cost of such Assets in accordance with Accounting Standard - 16 on “Borrowing Costs” (AS-16) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

XV. Provision, 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. Contingent liabilities are not recognized but are disclosed in the Other Notes to Accounts. Contingent assets are neither recognized nor disclosed in the Financial Statement.

XVI. Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on Fixed Assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard - 28 “Impairment of Assets” (AS-28) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2016. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

---

Mar 31, 2016

I. Basis of Preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with rule 7 of the Companies (Accounts) Rules , 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

II. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect reported amounts of Assets and Liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognized in the year in which the results materialize/ are known.

III. Fixed Assets:

1. Tangible Fixed Assets

i. Tangible Fixed Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed) and Borrowing Costs, if any.

ii. Machinery Spares which can be used only in connection with a particular item of Fixed Asset and the use of which is irregular, are capitalized at cost (net of Modvat / Cenvat credit availed)

2. Intangible Fixed Assets

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the Assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less amortization and accumulated impairment losses, if any.

3. Assets taken on Lease:

i. Finance Lease

Assets taken on Finance Lease after April 1, 2001 are accounted for as Fixed Assets in accordance with the Accounting Standard-19 “Lease” (AS 19) issued by the

Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act , 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability. ii. Operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

IV. Depreciation/ Amortization

(See note no. 2713 VI regarding Fixed Assets and ^the Depreciation)

A. Tangible Fixed Assets

1. Textile Unit:

i. Depreciation on Plant and Machinery is provided on Straight Line Method.

ii. Depreciation on Assets other than Plant and Machinery is provided on Written down value Method.

iii. Costs of Reeds are amortized over a period of 2 years.

iv. Cost of Imported Held frames are amortized over a period of 5 years and Domestic Heal frame over a period of 3 years.

2. Engineering Unit:

i. Depreciation on Fixed Assets is provided on Straight Line Method for Assets acquired up to March 31, 2001.

ii. Depreciation on Fixed Assets is provided on Written down value Method for Assets acquired on or after April 1, 2001.

3. Composite Unit:

i. Depreciation on Plant and Machinery is provided on Straight Line Method.

ii. Depreciation on Fixed Assets other than Plant and Machinery is provided on Written down value Method.

4. Depreciation on additions to Fixed Assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

5. Depreciation on Assets sold, discarded, demolished or scrapped, is provided up to the date on which the said Asset is sold, discarded, demolished or scrapped.

6. Cost of Leasehold Land is written off over the period of Lease.

B. Intangible Assets.

Intangible Assets are amortized in accordance with Accounting Standard 26 “Intangible Assets” (AS-26) issued by the Institute of Chartered Accountants of India and prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.

V. Investments:

Long term Investments are stated at cost less diminution in the value of Investments, if any. Current Investments are stated at cost or market value whichever is lower.

VI. Inventories:

1. Textile Unit:

i. Raw Materials :

At monthly weighted average cost.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished Goods :

At quarterly weighted average cost or net realizable value whichever is lower.

2. Engineering Unit:

i. Raw Materials :

At cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished goods :

Finished Goods are valued at lower of cost or net realizable value.

3. Composite Unit:

i. Raw Materials :

At cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition.

ii. Stores, Spares and Other Consumable:

Stores, Spares and Other Consumables are valued at cost. Cost comprises of purchase cost and any other cost, incurred in bringing the inventory to their present location and condition. Cost is considered on First in First out Basis.

iii. Process Stock and Finished Goods :

At cost or net realizable value whichever is lower.

Cost comprises of cost of materials, employee cost, factory overheads and other costs incurred in bringing the inventory to their present location and condition.

VII. Employee Benefits:

1. Defined Contribution Plan:

Employee Benefits in the form of contributions to Provident Fund, Employees State Insurance, Labour Welfare Fund managed by Government Authorities are considered as defined contribution plan and the same is charged to the Statement of Profit and Loss for the year on accrual basis.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defined Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

2. Defined Benefit Plan:

The liability for Leave Encashment and Gratuity is determined on actuarial basis as per the Accounting Standard -15 “Employee Benefits” (AS-15) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.

VIII. Foreign Currency Transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are affected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring Fixed Assets are adjusted in thecarrying amount of the respective Fixed Assets. Exchange differences arising on settlement of other transactions are recognized in the Statement of Profit and Loss.

Monetary items (other than those related to acquisition of imported Fixed Assets) denominated in foreign currency and not covered by forward contracts are restated using exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recognized in the Statement of Profit and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / Discount arising on such forward exchange contract is amortized as income / expense over the life of the contract. Any profit / loss arising on cancellation of such forward exchange contract are recognized as income or expense.

IX. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

X. Revenue Recognition:

1. Revenue from Domestic sale is recognized on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

2. Revenue from Export sale is recognized on transfer of significant risks and rewards of ownership based on Bill of lading date.

3. Dividend income is recognized when the right t receive dividend is established.

4. Revenue in respect of other income/claims, etc is recognized only when it is reasonably certain that ultimate collection will be made.

XI. Government Grants:

Grants are accounted for when it is reasonably certain that ultimate collection will be made.

XII. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on “Accounting for Taxes on Income” (AS-22) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognized for future tax consequence attributable to timing difference

between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

Xm. Accounting of Value Added Tax (VAT):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

XIV. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying Assets are capitalized as part of the cost of such Assets in accordance with Accounting Standard - 16 on “Borrowing Costs” (AS-16) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

XV. Provision, Contingent liabilities and Contingent Assets: (AS-29)

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. Contingent liabilities are not recognized but are disclosed in the Other Notes to Accounts. Contingent assets are neither recognized nor disclosed in the Financial Statement.

XVI. Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on Fixed Assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard-28 “Impairment of Assets”(AS-28) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

IV. The Board of Directors has recommend dividend of'' 4.50 per share on 16,64,548 Equity Shares of Rs, 10/- each aggregating to Rs, 90.15 lakhs (Inclusive of Dividend Distribution Tax of Rs,15.25 lakhs).

V. The Memorandum of Settlement between Hindoostan Mills Limited and the Karad Taluka Girani Kamagar Sangh, Karad (Sangh) expired on 31^st December, 2015. The Charter of Demands has been submitted by Sangh to the Management. The negotiations between the Management and the Sangh are in progress and accordingly, the Company has made a provision on an estimated basis which will be adjusted in the year in which finality is reached.

VI. FIXED ASSETS AND DEPRECIATION :

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 1^st April, 2014, the Companies has re-worked depreciation with reference to the useful lives of Fixed Assets prescribed by PART ‘C’ of Schedule II to the Act. Where the remaining useful life of an Asset is nil, the carrying amount of the Asset after retaining the residual value, as at 1^st April, 2014 has been adjusted to the General Reserve. In other cases the carrying values have been depreciated over the remaining useful lives of the Assets and recognized in the Statement of Profit and Loss.

Since then, as per the amendment dated 20th August, 2014, the useful life specified in Part C- of Schedule II has been defined to mean that if the cost of a Part of Asset is significant to the total cost of the Assets and useful life of that part is different from the useful life of the remaining Assets, useful life of that significant part shall be determined separately and depreciated accordingly.

In the opinion of the Management, the Company’s Assets are such that there are no significant parts thereof whose life would be different than the useful life of the whole Asset (The management opinion on component accounting being technical in nature the same is relied upon by the Auditors). Consequently, the Company has continued to provide depreciation in respect of all its Assets on the basis as was followed in the financial year 2014-15, i.e. based on useful lives of the respective Assets.

VII. INVESTMENTS:

The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana Ltd. (Society), are held in the names of two Directors of the Company, being its nominees, as required by the bye-laws of the Society.

VIII. Property under Development reflected as Stock-in-Trade was written down to '' 1 lakh in the earlier year as a measure of prudence. The settlement of account is a matter of dispute between the company (owner) and developer and there are claims and counter claims. The matter has been referred to arbitration in 2002. The impact of Arbitration Award will be recognised in the books of accounts as and when finality in the matter is reached.

Note : Dues to Mcro and Small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Company and relied upon by the Auditors.

X. During the year, under the New Textile Policy, 2012, as per Government Resolution (GR) dated 19^th January, 2016, the Company is entitled to an Interest Subsidy for the period from May 2014 to June 2015 aggregating to Rs,93.76 Lacs. The Company is of the view that it will receive the Interest Subsidy for the Period from July 2015 to 31^st March, 2016 aggregating to '' 80.76 Lacs as and when the processing is completed by the Ministry of Textiles. Accordingly, the Company has recognized Interest Subsidy on “accrual basis” for the period from May 2014 to 31^st March, 2016 aggregating toRs, 174.52 Lacs as Other Income.

XI. CURRENT TAX :

In view of losses for the year ended 31st March 2016, no provision for Income Tax and Minimum Alternate Tax under Section 115JB of Income Tax Act, 1961 is required to be made.

DEFERRED TAX :

In accordance with Accounting Standard 22 on “Accounting for Taxes on Income” ( AS - 22) as prescribed under Section 133 of Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, Deferred Tax Assets consist of substantial amounts of carry forward losses and unabsorbed depreciation under the Income Tax Act, 1961. However, since the availability of sufficient future taxable income against which they said benefits can be set off is not possible to be ascertained with virtual certainty, the Deferred Tax Assets have not been recognized as a measure of abundant caution.

---

Mar 31, 2015

I. Basis of Preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, provision of the Act(to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

II. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of Assets and Liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results materialize/ are known.

III. Fixed Assets:

1. Tangible Fixed Assets

i. Tangible Fixed Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed) and Borrowing Costs, if any.

ii. Machinery Spares which can be used only in connection with a particular item of fixed asset and the use of which is irregular, are capitalised at cost (net of Modvat / Cenvat credit availed)

iii. Fixed Assets declared surplus are valued as follows:

- Material items of Assets at lower of net realizable value and net book value.

- At net book value if the value is not material.

2. Intangible Fixed Assets

Intangible Assets are recognized only if it is probable that the future economic benefits that are attributable to the Assets will flow to the enterprise and the cost of the Assets can be measured reliably. The Intangible Assets are recorded at cost and are carried at cost less depreciation /amortization and accumulated impairment losses, if any.

3. Assets taken on Lease:

i. Finance Lease

Assets taken on finance lease after April 1, 2001 are accounted for as Fixed Assets in accordance with the Accounting Standard -19 "Lease" (AS 19) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014. Accordingly, the Assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

ii. Operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

IV. Depreciation/ Amortization

A. Tangible Fixed Assets

1. Textile Unit:

i. Depreciation on all the Plant and Machineries is provided on the Straight Line Method in accordance with Schedule II to the Companies Act, 2013.

ii. Depreciation on Assets other than Plant and Machineries is provided on the Written Down Method in accordance with Schedule II to the Companies Act, 2013.

iii. Costs of Reeds are written off over a period of 2 years.

2. Engineering Unit:

i. Depreciation on Fixed Assets is provided on the Straight Line Method for the Assets acquired upto March 31, 2001 in accordance with Schedule II to the Companies Act, 2013.

ii. Depreciation on Fixed Assets is provided on the Written Down Method for the Assets acquired on or after April 1, 2001 in accordance with Schedule II to the Companies Act, 2013.

3. Composite Unit:

i. Depreciation on all the Plant and Machineries is provided on the Straight Line Method in accordance with Schedule II to the Companies Act, 2013.

ii. Depreciation on all Fixed Assets other than Plant and Machineries is provided on the Written Down Method in accordance with Schedule II to the Companies Act, 2013.

4. Depreciation on additions to Fixed Assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

5. Depreciation on Assets sold, discarded, demolished or scrapped, is provided upto the date on which the said Asset is sold, discarded, demolished or scrapped.

6. Cost of Leasehold Land is written off over the period of Lease.

B. Intangible Assets

1. Tenancy Rights:

Management is of the opinion that the Tenancy Rights need not be amortized.

2. Other Intangible Assets:

Intangible Assets are Amortized in accordance with Accounting Standard 26 "Intangible Assets" (AS-26) issued by the Institute of Chartered Accountants of India and prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014.

V. Investments:

Long term Investments are stated at cost less diminution in the value of Investments, if any. Further, Current Investments are stated at cost or market value whichever is lower.

VI. Inventories:

1. Textile Unit:

1. Raw Materials :

At monthly average cost or net realizable value whichever is lower.

ii. Stores and Spares :

At cost or net realizable value whichever is lower.

iii. Process Stock and Finished Goods :

At quarterly average cost or net realizable value whichever is lower.

2. Engineering Unit:

i. Raw Materials :

At cost or net realizable value whichever is lower.

ii. Process stock :

Cost comprises of Raw Material cost and processing cost.

iii. Stores and Other Consumables :

Stores and Other Consumables are valued at cost. Cost is considered on First in First out Basis.

iv. Finished Goods :

Finished Goods are valued at lower of cost or net realizable value.

3. Composite Unit:

i. Raw Materials :

At cost or net realizable value whichever is lower

ii. Stores and Spares :

At cost or net realizable value whichever is lower

iii. Process Stock and Finished Goods :

At cost or net realizable value whichever is lower

Cost comprises of cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

VII. Employee Benefits:

1. Defined Contribution Plan:

Employee Benefits in the form of contributions to Provident Fund, Employees State Insurance, Labour Welfare Fund managed by Government Authorities are considered as defined contribution plan and the same is charged to the Statement of Profit and Loss for the year on accrual basis.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defined Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

2. Defined Benefit Plan:

The liability for Leave encashment and Gratuity is determined on actuarial basis as per the Accounting Standard -15 "Employee Benefits" (AS 15) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014.

VIII. Foreign Currency Transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are effected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring Fixed Assets from a country outside India are adjusted in carrying amount of the respective Fixed Assets. Exchange differences arising on settlement of other transactions are recognised in the Statement of Profit and Loss.

Monetary items (other than those related to acquisition of imported Fixed Assets) denominated in foreign currency and not covered by forward contracts are restated using the exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recognised in the Statement of Profit and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / Discount arising on such forward exchange contract is amortised as income/expense over the life of the contract. Any profit / loss arising on cancellation of such forward exchange contract are recognised as income or expense.

IX. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

X. Revenue Recognition:

1. Revenue from Domestic sale is recognised on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

2. Revenue from Export sale is recognised on transfer of significant risks and rewards of ownership which is based on Bill of Lading date.

3. Dividend income is recognised when the right to receive dividend is established.

4. Income from Property Development is accounted on pro-rata basis taking into consideration amount receivable for property development, number of flats sold and construction work completed.

5. Revenue in respect of other income/claims, etc is recognised only when it is reasonably certain that ultimate collection will be made.

6. Revenue in respect of Government Grants is recognised on receipt basis.

XI. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognised for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at

relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

XII. Accounting of Value Added Tax (VAT):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

XIII. Borrowing Costs:

Borrowing Costs that are attributable to the acquisition or construction of qualifying Assets are capitalized as part of the cost of such Assets in accordance with Accounting Standard - 16 on "Borrowing Costs" (AS-16) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

XIV. Provision, Contingent Liabilities and Contingent Assets: (AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the Financial Statement.

XV. Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on Fixed Assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard - 28 "Impairment of Assets" (AS-28) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognised in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

---

Mar 31, 2014

I. Basis of Preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

II. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results materialize/ are known.

III. Fixed Assets:

1. Tangible Fixed Assets

i. Tangible Fixed Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed)

ii. Machinery Spares which can be used only in connection with a particular item of fixed asset and the use of which is irregular, are capitalised at cost (net of Modvat / Cenvat credit availed)

2. Intangible Fixed Assets

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less depreciation /amortization and accumulated impairment losses, if any.

3. Assets taken on Lease:

i. Finance Lease

Assets taken on finance lease after April 1, 2001 are accounted for as fixed assets in accordance with the Accounting Standard -19 "Lease" (AS 19) issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006. Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

ii. Operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

IV. Depreciation/ Amortization:

A. Tangible Fixed Assets

1. Textile Unit:

i. Depreciation on all the Plant & Machineries is provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956.

ii. Depreciation on assets other than Plant & Machineries is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

iii. Costs of Reeds are written off over a period of 2 years.

2. Roll Manufacturing Unit:

i. Depreciation on Fixed Assets is provided on the Straight Line Method for the assets acquired upto March 31, 2001 in accordance with Schedule XIV to the Companies Act, 1956.

ii. Depreciation on Fixed Assets is provided on the Written Down Method for the assets acquired on or after April 1, 2001 in accordance with Schedule XIV to the Companies Act, 1956.

3. Technical Fabric Unit:

i. Depreciation on all the Plant and Machineries is provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956.

ii. Depreciation on all Fixed Assets other than Plant and Machineries is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

4. Depreciation on additions to fixed assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

5. Depreciation on assets sold, discarded, demolished or scrapped, is provided upto the date on which the said asset is sold, discarded, demolished or scrapped.

6. Cost of Leasehold Land is written off over the period of Lease.

B. Intangible Assets

Intangible Assets are amortised in accordance with Accounting Standard 26 "Intangible Assets" (AS-26) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006.

V. Investments:

Long term investments are stated at cost less diminution in the value of investments, if any. Further, current investments are stated at cost or market value whichever is lower.

VI. Inventories:

1. Textile Unit:

i. Raw Materials :

At monthly average cost or net realizable value whichever is lower.

ii. Stores and Spares :

At cost or net realizable value whichever is lower.

iii. Process Stock and Finished Goods :

At quarterly average cost or net realizable value whichever is lower.

2. Roll Manufacturing Unit:

i. Raw Materials :

At cost or net realizable value whichever is lower.

ii. Process Stock :

Cost comprises of Raw Material cost and processing cost.

iii. Stores & Other Consumables :

Stores & Other Consumables are valued at cost. Cost is considered on First in First out Basis.

iv. Finished Goods :

Finished Goods are valued at lower of cost or net realizable value.

3. Technical Fabric Unit:

i. Raw Materials :

At cost or net realizable value whichever is lower. ii. Stores and Spares :

At cost or net realizable value whichever is lower. iii. Process Stock and Finished Goods :

At cost or net realizable value whichever is lower.

Cost comprises of cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

VII. Employee Benefits:

1. Denned Contribution Plan:

Employee Benefits in the form of contributions to Provident Fund, Employees State Insurance, Labour Welfare Fund managed by Government Authorities are considered as defined contribution plan and the same is charged to the Statement of Profit and Loss for the year on accrual basis.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defined Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

2. Denned Benefit Plan:

The liability for Leave encashment and Gratuity is determined on actuarial basis as per the Accounting Standard -15 "Employee Benefits" (AS 15) issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006.

VIII. Foreign Currency Transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are effected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring fixed assets from a country outside India, are adjusted in carrying amount of the respective fixed assets. Exchange differences arising on settlement of other transactions are recognised in the Statement of Profit and Loss.

Monetary items (other than those related to acquisition of imported fixed assets) denominated in foreign currency and not covered by forward contracts are restated using the exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recognised in the Statement of Profit and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / discount arising on such forward exchange contract is amortised as income / expense over the life of the contract. Any profit / loss arising on cancellation of such forward exchange contract are recognised as income or expense.

IX. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

X. Revenue Recognition:

1. Revenue from domestic sale is recognised on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

2. Revenue from Export sale is recognised on transfer of significant risks and rewards of ownership which is based on Bill of lading date.

3. Dividend income is recognised when the right to receive dividend is established.

4. Income from Property Development is accounted on pro-rata basis taking into consideration amount receivable for property development, number of flats sold and construction work completed.

5. Revenue in respect of other income/claims, etc is recognised only when it is reasonably certain that ultimate collection will be made.

6. Revenue in respect of Government Grants is recognised on receipt basis.

XI. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognised for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

XII. Accounting of Value Added Tax (VAT):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

XIII. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard - 16 on "Borrowing Costs" (AS-16) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules, 2006. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

XIV Provision, Contingent liabilities and Contingent Assets:

(AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the Financial Statement.

XV Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard - 28 "Impairment of Assets" (AS- 28) issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognised in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

I. Basis of Preparation of Financial Statements:

The accounts for the year ended March 31, 2014 are prepared in accordance with the provisions of the Companies Act, 1956 read with of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs.

II. Amalgamation of Hindoostan Technical Fabrics Ltd with the Company.

i. Pursuant to the Scheme of Amalgamation of Hindoostan Technical Fabrics Ltd a wholly owned Subsidiary ("Transferor Company") with the Company, as sanctioned by the Hon''ble High Court of Bombay vide their order dated - October 10, 2014, the Assets and Liabilities of the Transferor Company were transferred to and vested with the Company with effect from the appointed date, April 1, 2013.

ii. The Transferor Company is engaged in the business of manufacturing of composite fabric.

iii. The amalgamation has been accounted for under the ''Pooling of interest'' method as prescribed by Accounting Standard 14 ''Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly the Assets and Liabilities of the Transferor Company as at April 1, 2013, have been taken over at their book values.

iv Consequent to the Scheme of Amalgamation, the Authorized Equity Share Capital of the Company stands increased from 2,27,67,500 Equity Shares of Rs.10/- each, aggregating to Rs.2,276.75 lakhs to 2,77,67,500 Equity Shares of Rs.10/- each aggregating to Rs.2,776.75 lakhs.

v. As per the Scheme of Amalgamation, the Debit balance in Statement of Profit and Loss of the Transferor Company as on March 31,2013 of Rs.186.68 lakhs has been adjusted in the Surplus in Reserves and Surplus.

vi. Details of Assets and Liabilities taken over in Amalgamation:

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Mar 31, 2013

1. Basis of Preparation of Financial Statements:

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results materialize/are known.

3. Fixed Assets:

A. Tangible Fixed Assets

a. Tangible Fixed Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed)

b. Machinery Spares which can be used only in connection with a particular item of fixed asset and the use of which is irregular, are capitalised at cost (net of Modvat / Cenvat credit availed)

B. Intangible Fixed Assets

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less depreciation /amortization and accumulated impairment losses, if any.

C. Assets taken on Lease:

a. Finance Lease

Assets taken on finance lease after April 1,2001 are accounted for as fixed assets in accordance with the Accounting Standard 19 "Lease" (AS 19) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006. Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

b. Operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

4. Depreciation of Tangible Fixed Assets: I. Textile Unit:

a. Depreciation on all the Plant & Machineries acquired is provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets other than Plant & Machineries acquired is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

c. Cost of Reeds are written off over the period of 2 years.

II. Roll Manufacturing Unit:

a. Depreciation on Fixed Assets is provided on the Straight Line Method for the assets acquired upto March 31, 2001 in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on Fixed Assets acquired after April 1, 2001 is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

III. Depreciation on additions to fixed assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

IV. Depreciation on assets sold, discarded, demolished or scrapped, is provided upto the date on which the said asset is sold, discarded, demolished or scrapped.

V. Cost of Leasehold Land is written off over the period of Lease.

5. Investments:

Long term investments are stated at cost less diminution in the value of investments'', if any. Further, current investments are stated at cost or market value whichever is lower.

6. Inventories:

a. Textile Unit:

i. Raw Materials

At monthly average cost or net realizable value whichever is lower.

ii. Process Stock and Finished Goods

At quarterly average cost or net realizable value whichever is lower.

iii. Stores and Spares

At cost or net realizable value whichever is lower.

b. Roll Manufacturing Unit:

Stock of Raw Materials, Stores & Other Consumables and Semi Finished Goods are valued at lower of cost or net realisable value and for this purpose cost is determined on following basis:

i. Raw Materials

At cost or net realizable value whichever is lower.

ii. Process stock

Cost comprises of Raw Material cost and processing cost.

iii. Stores & Other Consumables

Stores & Other Consumables are valued at cost. Cost is considered on First in First out Basis.

iv. Finished goods

Finished Goods are valued at lower of cost or net realizable value.

Cost comprises of cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

7. Employee Benefits:

Defined Contribution Plan:

Employee Benefit in the form of contribution to Provident Fund managed by Government Authorities, Employees State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to the Statement of Profit and Loss for the year when the contributions to the respective funds are due.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defined Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

Defined Benefit Plan:

The liability for Leave encashment and Gratuity is determined on actuarial basis as per the Accounting Standard 15 "Employee Benefits" (AS-15) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006.

8. Foreign Currency Transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are effected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring fixed assets from a country outside India, are adjusted in carrying amount of the respective fixed assets. Exchange differences arising on settlement of other transactions are recognized in the Statement of Profit and Loss.

Monetary items (other than those related to acquisition of imported fixed assets) denominated in foreign currency and not covered by forward contracts are restated using the exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recogn ized in the Statement of Profit and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / discount arising on such forward exchange contract is amortised as income / expense over the life of the contract. Any profit / loss arising on cancellation of such forward exchange contract are recognized as income or expense.

9. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

10. Revenue Recognition:

a. Revenue from domestic sale is recognized on transfer of significant risks and rewards of ownership which is based on the dispatch of goods.

b. Revenue from Export sale is recognized on transfer of significant risks and rewards of ownership which is based on Bill of lading date.

c. Dividend income is recognized when the right to receive dividend is established.

d. Income from property development is accounted on pro-rata basis taking into consideration amount receivable for property development, number of flats sold and construction work completed.

e. Revenue in respect of other income/claims, etc is only when it is reasonably certain that ultimate collection will be made.

11. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognized for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

12. Accounting of Value Added Tax (VAT):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

13. Borrowing Costs:

Borrowing costs that are 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 a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

14. Provision, 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. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent assets are neither recognized nor disclosed in the Financial Statement.

15. Impairment of Fixed Assets:

At the end of the each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with the Accounting Standard 28 "Impairment of Assets" (AS 28) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules, 2006. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

---

Mar 31, 2012

1. Basis of Preparation of Financial statements:

These fnancial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2. Use of estimates:

The preparation of fnancial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of fnancial statements and reported amounts of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results materialize/are known.

3. Fixed assets:

a. tangible Fixed assets

a. Tangible Fixed Assets are recorded at their original cost of acquisition/installation (net of Modvat / Cenvat credit availed)

b. Machinery Spares which can be used only in connection with a particular item of fxed asset and the use of which is irregular, are capitalised at cost (net of Modvat / Cenvat credit availed)

B. Intangible Fixed assets

Intangible assets are recognized only if it is probable that the future economic benefts that are attributable to the assets will fow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less depreciation /amortization and accumulated impairment losses, if any.

C. assets taken on Lease:

a. Finance Lease

Assets taken on fnance lease after April 1, 2001 are accounted for as fxed assets in accordance with the Accounting Standard 19 ''Lease'' (AS 19) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006. Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between fnance charge and reduction of outstanding liability.

b. operating Lease

Assets taken on lease under which all the risks and rewards of ownership effectively retained by the Lessor are classifed as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreements.

4. Depreciation of tangible Fixed assets: I. textile Unit:

a. Depreciation on all the Plant & Machineries acquired is provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets other than Plant & Machineries acquired is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

c. Cost of Reeds are written off over the period of 2 years.

II. Roll Manufacturing Unit:

a. Depreciation on Fixed Assets is provided on the Straight Line Method for the assets acquired upto March 31, 2001 in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on Fixed Assets acquired after April 1, 2001 is provided on the Written Down Method in accordance with Schedule XIV to the Companies Act, 1956.

III. Depreciation on additions to fxed assets is provided on pro-rata basis from the date of acquisition or installation, and in case of new project from the date of commencement of commercial production.

I V. Depreciation on assets sold, discarded, demolished or scrapped, is provided upto the date on which the said asset is sold, discarded, demolished or scrapped.

V. Cost of Leasehold Land is written off over the period of Lease.

5. Investments:

Long term investments are stated at cost less diminution in the value of investments, if any. Further, current investments are stated at cost or market value whichever is lower.

6. Inventories:

a. textile Unit:

i. Raw Materials

At monthly average cost or net realizable value whichever is lower.

ii. Process Stock and Finished Goods

At quarterly average cost or net realizable value whichever is lower.

iii. Stores and Spares

At cost or net realizable value whichever is lower.

b. Roll Manufacturing Unit:

Stock of Raw Materials, Stores & Other Consumables and Semi Finished Goods are valued at lower of cost or net realisable value and for this purpose cost is determined on following basis:

i. Raw Materials

At cost or net realizable value whichever is lower.

ii. Process stock

Cost comprises of Raw Material cost and processing cost.

iii. Stores & Other Consumables

Stores & Other Consumables are valued at cost. Cost is considered on First in First out Basis.

iv. Finished goods

Finished Goods are valued at lower of cost or net realizable value.

Cost comprises of cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

7. Employee Benefts:

Defned Contribution Plan:

Employee Beneft in the form of contribution to Provident Fund managed by Government Authorities, Employees State Insurance Corporation and Labour Welfare Fund are considered as defned contribution plan and the same is charged to the Statement of Proft and Loss for the year when the contributions to the respective funds are due.

Certain employees of Hindoostan Mills Ltd. are participants in the LIC Group Superannuation Scheme which is a Defned Contribution Plan. The Company has no obligations to the Plan beyond its yearly contributions.

Defned Beneft Plan:

The liability for Leave encashment and Gratuity is determined on actuarial basis as per the Accounting Standard 15 ''Employee Benefts'' (AS-15) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006.

8. Foreign Currency transactions:

Transactions in Foreign Currency are recorded at the original rate of exchange in force at the time the transactions are effected. Exchange differences arising on repayment / restatement of foreign currency liabilities incurred for the purpose of acquiring fxed assets from a country outside India, are adjusted in carrying amount of the respective fxed assets. Exchange differences arising on settlement of other transactions are recognized in the Statement of Proft and Loss.

Monetary items (other than those related to acquisition of imported fxed assets) denominated in foreign currency and not covered by forward contracts are restated using the exchange rate prevailing at the date of the Balance Sheet and the resulting net exchange difference is recogn ized in the Statement of Proft and Loss.

Monetary items covered by forward contracts are translated at the rate on the date of transaction. Premium / discount arising on such forward exchange contract is amortised as income / expense over the life of the contract. Any proft / loss arising on cancellation of such forward exchange contract are recognized as income or expense.

9. Research and Development:

Research and Development expenses are charged to revenue under the respective heads of accounts during the year in which they are incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.

10. Revenue Recognition:

a. Revenue from domestic sale is recognized on transfer of signifcant risks and rewards of ownership which is based on the dispatch of goods.

b. Revenue from Export sale is recognized on transfer of signifcant risks and rewards of ownership which is based on Bill of lading date.

c. Dividend income is recognized when the right to receive dividend is established.

d. Income from property development is accounted on pro-rata basis taking into consideration amount receivable for property development, number of fats sold and construction work completed.

e. Revenue in respect of other income/claims, etc is only when it is reasonably certain that ultimate collection will be made.

11. taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard – 22 on ''Accounting for Taxes on Income'' (AS-22) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules,2006. Tax expenses comprise both Current Tax and Deferred Tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred Tax Assets and Liabilities are recognized for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

12. accounting of Value added tax (Vat):

VAT input credit is accounted on accrual basis on purchase of materials, which is utilized for payment of VAT on sale of taxable goods and balance is processed for claiming refund.

13. Borrowing Costs:

Borrowing costs that are 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 a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

14. Provision, 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 outfow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent assets are neither recognized nor disclosed in the Financial Statement.

15. Impairment of Fixed assets:

At the end of the each year, the Company determines whether a provision should be made for impairment loss on fxed assets by considering the indications that an impairment loss may have occurred in accordance with the Accounting Standard 28 ''Impairment of Assets'' (AS 28) issued by the Institute of Chartered Accountants of India and prescribed by the Companies (Accounting Standards) Rules, 2006. An impairment loss is charged to the Statement of Proft and Loss in the year in which an asset is identifed as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

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Mar 31, 2011

A. Basis of accounting:

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis. Financial statements are based on historical cost.

Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amounts of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results materialize/ are known.

1. Fixed assets and Depreciation:

Fixed Assets are recorded at cost of acquisition or construction.

Depreciation for the year is provided on the written down value except on Plant and Machinery at Ambernath Plant acquired before 2001 and Plant and Machinery at Karad Plant which is provided on straight line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

2. Investments:

Long term investments are stated at cost less diminution in the investments if any. Further current investments are stated at cost or market value whichever is lower.

Investment made through Portfolio Management Services account is reflected by way of opening and closing stock and no transaction wise details have been shown.

3. Inventories:

A) Ambernath Unit:

Stock of raw materials, packing materials and semi finished goods are valued at lower of cost or net realisable value and for this purpose cost is determined on following basis:

1. Raw Materials

At cost or net realisable value whichever is lower. Cost includes incidental expenses like freight transport, custom duty etc.

2. Process stock

Cost comprises of Raw Material cost and processing cost.

3. Packing Materials

Packing materials are valued at cost. Cost is considered on First In First Out Basis

4. Finished goods

Finished Goods are valued at lower of cost or net realisable value and for this purpose the cost is determined on job costing basis.

B) Karad Unit:

1) Stores and Spares

At weighted average cost or net realizable value whichever is lower.

2) Raw Materials

At monthly average cost or net realizable value whichever is lower.Cost includes incidental expenses like freight, transport etc.

3) Process Stock and Finished Goods

At monthly average cost or net realizable value whichever is lower.

Cost comprises of cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

4. Employee Benefits:

Contributions payable to the Company's Superannuation Scheme of L.l.C and Provident Fund are charged to revenue. The provision for leave encashment and Gratuity is determined on actuarial basis as per the Accounting Standard (AS- 15) as per Companies (Accounting Standards) Rules, 2006.

5. Foreign currency transactions:

Transactions in foreign currency are recorded at prevailing rates i.e. in the original rate of exchange in force at the time the transactions are effected. Monetary items in the nature of current assets and liabilities denominated in foreign currencies, to the extent not covered by foreign exchange contracts, are accounted at the exchange rates prevailing on the Balance Sheet date. Gains/losses arising out of fluctuations in exchange rates are accounted for in the profit and loss account except where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets as required under schedule VI of the Companies Act, 1956

6. Taxes on income:

Income Taxes are accounted for in accordance with Accounting Standard - 22 on " Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India. Tax expenses comprises both current tax and deferred tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities using the applicable tax rates. Deferred tax assets and liabilities are recognized for future tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date, the Company reassesses unrealized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.

7. Revenue Recognition:

a) Revenue from domestic sale is recognized on transfer of significant risks and rewards of ownership.

b) Revenue from export sale (including duty drawback) is recognized on transfer of significant risks and rewards of ownership.

c) Dividend income is recognized when the right to receive dividend is established.

d) Revenue in respect of insurance/other claims, interest etc. is recognized only when it is reasonably certain that ultimate collection will be made.

8. Accounting of value added tax :

VAT input credit is accounted on accrual basis on purchase of materials / goods.

9. Provision, Contingent liabilities and Contingent Assets:

Provision 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. Contingent liabilities are not recognized but are disclosed in the Notes. Contingents assets are neither recognized nor disclosed in the Financial Statement.

10. Impairment of Fixed Assets:

At the end of the each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with the Accounting Standard (AS 28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired, when the carrying value of the asset exceeds it recoverable value. The impairment loss recognized in prior accounting period is reversed, if there has been a change in the estimate of recoverable amounts.

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Mar 31, 2010

(a) Basis of accounting:

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis. Financial statements are based on historical cost.

(b) Fixed assets and depreciation:

i) All fixed assets are stated at cost of acquisition less accumulated depreciation.

ii) Depreciation for the year is provided on the written down value and straight line method at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under:

a) Fixed assets of erstwhile Eck Haubold and Laxmi Limited acquired after April 1985 on the straight line method.

b) All other assets on the written down value method.

(c) Investments:

Long term investments are stated at cost as there is no diminution in the value of investments. Further short term investments are stated at cost or market value whichever is lower.

(d) Inventories:

1) Stock of raw materials, packing materials and semi finished goods are valued at lower of cost or net realisable value and for this purpose cost is determined on following basis:

a) Raw materials and semi finished goods

- First-in-first-out method except Cotton, Brown Papers & Steel (Kgs)

- Cotton hard waste, Brown Papers & Steel (Kgs) — weighted average basis

b) Packing Materials - First-in-first-out method

However, the aforesaid items are not valued below cost as the finished goods in which they are to be incorporated are expected to be sold at or above cost.

2) Raw materials, stores, packing materials, tools etc., are accounted on net basis.

3) Finished goods are valued at lower of cost or net realisable value and for this purpose the cost is determined on job costing basis.

(e) Lease rent:

Annual contractual lease rent received/accrued is credited to the profit and loss account

(f) Employee Benefits:

(i) Snort Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits and they are recognised in the period in which the employee render service. The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expenses) after deducting any amount already paid.

(ii) Post Employment Benefits:

(a) Defined Benefits Plan Defined Benefit Gratuity Plan. The Company operates defined benefits Gratuity Plans for employees, which is unfunded.

The cost of providing defined benefits is determined using the Projected Unit Credit Method with actuarial valuation being carried out at each balance sheet date. Past service cost is recognised immediately to the extent that the benefits are already vested, else is amortised on a straight- line over the average period until the amended benefits become vested.

The defined benefit obligation recognised in the balance sheet represent the present value of the defined obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost.

The estimates of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

Other Long Term Employee Benefits;

Entitlements to annual leaves are recognised when they accrue to employees. Annual leave can either be availed or encashed subject to a restriction on the maximum number of accumulation of leaves. The Company determines the liability for such accumulated leaves using the Projected Accrued Benefit Method with actuarial valuations being carried out at each balance sheet date.

g) Foreign currency transactions:

Transactions in foreign currency are recorded at prevailing rates. Monetary items in the nature of current assets and liabilities denominated in foreign currencies, to the extent not covered by foreign exchange contracts, are transacted at the exchange rates prevailing on the Balance Sheet date. Gains/losses arising out of fluctuations in exchange rates are accounted for in the profit and loss account except where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets as required under schedule VI of the Companies Act, 1956.

h) Taxes on income:

Income-tax expenses comprises of current tax and deferred tax. The deferred tax charge or credit is recognised using current tax rates.