Dollar Industries Ltd. कंपली की लेखा नीति

Mar 31, 2025

3 MATERIAL ACCOUNTING POLICIES

Material accounting policy information has been identified
and disclosed based on the guidance provided under Ind
AS 1. The material accounting policy information used in
preparation of the standalone financial statements have
been disclosed in the respective notes.

4 CRITICAL ACCOUNTING ESTIMATES AND
JUDGEMENTS

The preparation of financial statements require judgements,
estimates and assumptions to be made that affect
the reported amount of assets and liabilities including
contingent liabilities on the date of the financial statements
and the reported amount of revenues and expenses during
the reporting period. Difference between actual results
and estimates are recognized in the period prospectively
in which the results are known / materialized. Information
about significant judgements and key sources of estimation
made in applying accounting policies that have the most
significant effects on the amounts recognized in the
financial statements is included in the following notes:

a) Revenue recognition: Revenue is recognised
upon transfer of control of promised products or
services to customers in an amount that reflects
the consideration which the Company expects to
receive in exchange for those products or services.
Revenue is measured based on the transaction
price, which is the consideration, adjusted for volume
discounts, price concessions and incentives, if any,
as specified in the contract with the customer. The
Company exercises judgment in determining whether
the performance obligation is satisfied at a point in
time or over a period of time. The Company considers
indicators such as how customer consumes benefits
as services are rendered or who controls the asset as
it is being created or existence of enforceable right to
payment for performance to date and alternate use
of such product or service, transfer of significant risks
and rewards to the customer, acceptance of delivery
by the customer, etc.

b) Recognition of Deferred Tax Assets: The extent to
which deferred tax assets can be recognized is based
on an assessment of the probability of the Company''s
future taxable income against which the deferred
tax assets can be utilized. In addition, significant
judgement is required in assessing the impact of any
legal or economic limits.

c) Useful lives of depreciable/ amortisable assets
(tangible and intangible): Management reviews
its estimate of the useful lives of depreciable/
amortisable assets at each reporting date, based on
the expected utility of the assets. Uncertainties in
these estimates relate to actual normal wear and tear
that may change the utility of plant and equipment.

d) Defined Benefit Obligation (DBO): Employee benefit
obligations are measured on the basis of actuarial
assumptions which include mortality and withdrawal
rates as well as assumptions concerning future

developments in discount rates, medical cost trends,
anticipation of future salary increases and the inflation
rate. The Company considers that the assumptions
used to measure its obligations are appropriate.
However, any changes in these assumptions may have
a material impact on the resulting calculations.

e) Provisions and Contingencies: The assessments
undertaken in recognising provisions and
contingencies have been made in accordance with
Indian Accounting Standards (Ind AS) 37, ‘Provisions,
Contingent Liabilities and Contingent Assets''. The
evaluation of the likelihood of the contingent events
is applied best judgement by management regarding
the probability of exposure to potential loss.

f) I impairment of Financial Assets: The Company
reviews its carrying value of investments carried at
amortized cost annually, or more frequently when there
is indication of impairment. If recoverable amount is
less than its carrying amount, the impairment loss is
accounted for.

g) Allowances for Doubtful Debts: The Company
makes allowances for doubtful debts through
appropriate estimations of irrecoverable amount.
The identification of doubtful debts requires use of
judgment and estimates. Where the expectation is
different from the original estimate, such difference
will impact the carrying value of the trade and other
receivables and doubtful debts expenses in the
period in which such estimate has been changed.

h) Fair value measurement of financial instruments:

When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the Discounted Cash Flow model. The input
to these models are taken from observable markets
where possible, but where this not feasible, a degree
of judgement is required in establishing fair values.
Judgements include considerations of inputs such as
liquidity risk, credit risk and volatility.

i) Extension and termination option in leases:

Extension and termination options are included in
many of the leases. In determining the lease term the
Management considers all facts and circumstances
that create an economic incentive to exercise an
extension option, or not exercise a termination option.
This assessment is reviewed if a significant event or
a significant change in circumstances occurs which
affects this assessment and that is within the control
of the Company.

5 Property, plant and equipment
Accounting Policy

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

In case of self-constructed assets, cost includes the costs of
all materials used in construction, direct labour, allocation
of overheads, directly attributable borrowing costs.

Subsequent costs are included in the asset''s carrying
amount, only when it is probable that future economic
benefits associated with the cost incurred will flow to the

company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a
separate asset is derecognized when replaced.

Depreciation is provided on written down method at the
rates determined based on the useful lives of respective
assets as prescribed in the Schedule II of the Companies
Act, 2013.

As per the above policy, depreciation on the solar plant
have been provided at the rate which are different from the
corresponding rates prescribed in Schedule II based on the
estimated useful life of the project.

5.1 Refer Note 20 for hypothecation of property, plant and equipment against borrowing.

5.2 Title deeds for immovable properties are held in the name of the company.

5.3 The company has not revalued its Property, Plant and Equipment during the current year or previous year.

5.4 The company has performed an assessment of its Property, Plant and Equipment for possible triggering events or
circumstances for an indication of impairment and has concluded that there were no triggering events or circumstances
that would indicate the Property, Plant and Equipment are impaired.

5.5 Property, Plant and Equipment amounting to H 25,823.97 lacs (March 31, 2024 - H 21,134.70 lacs) have been pledged
to secure borrowings of the Company (Refer note 20). Details of charge has been given on the basis of records available
with Registrar of Companies.

6 Capital work-in-progress
Accounting Policy

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount
borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far
as such expenses relate to the period prior to the commencement of commercial production.

During the previous year, there were no projects as on reporting period where activity had been suspended. Also there were no
projects as on the reporting period which has exceeded cost as compared to its original plan or where completion is overdue.

6.1 The company has performed an assessment of its Capital Work-in-Progress for possible triggering events or circumstances
for an indication of impairment and has concluded that there were no triggering events or circumstances that would
indicate the Capital Work-in-Progress are impaired

6.2 Capital Work-in-Progress amounting to H 63.13 lacs (March 31, 2024 - H 1,685.01 lacs) have been pledged to secure
borrowings of the Company (Refer note 20). Details of charge has been given on the basis of records available with
Registrar of Companies.

7 Right of use assets
Accounting Policy

The company recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date. Right of use assets
are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If
ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset

7.1 The company has performed an assessment of its Right of use assets for possible triggering events or circumstances for an
indication of impairment and has concluded that there were no triggering events or circumstances that would indicate the
Right of use assets are impaired

8 Intangible assets
Accounting Policy

Intangible assets purchased are initially measured at cost. The cost of a separately purchased intangible asset comprises its
purchase price including duties and taxes and any costs directly attributable to making the asset ready for their intended use.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired.

Intangible assets (System Oriented Softwares) are amortised on straight line basis over its estimated useful life of 3 years. All
other expenditure is recognised in Statement of Profit & Loss as incurred unless such expenditure forms part of carrying value
of another asset. The amortisation period and amortisation method are reviewed at least at the end of each financial year. If the
expected useful life of assets is significantly different from previous estimates, the amortisation period is revised accordingly.

9 Investments in subsidiary & joint venture
Accounting Policy

Investments in Subsidiary and Joint Venture are carried at cost less accumulated impairment losses, if any. Where an indication
of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
amount. On disposal of investments in joint venture, the difference between net disposal proceeds and the carrying amounts
are recognised in the statement of profit and loss.

Impairment of Non - Financial Assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated
as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price.
Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).

An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified
as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in
recoverable amount.

9.1 On 20-01-2023, the company acquired 66.66% of the share capital in M/s. Dollar Garments Private Limited and hence the
same is treated as a Subsidiary as it has control over it.

9.2 The company holds 49% of the share capital in the Joint Venture Company. During the year, the Company has provided for
reversal of impairment on its investment in Joint Venture viz. Pepe Jeans Innerfashions Pvt Ltd (PJIFPL) of H 318.86 Lacs.
Hence, the carrying amount of investment has increased to H 1,497.00 Lacs.

Financial Asset
Accounting Policy

(a) Initial recognition and measurement

All financial assets are initially recognized when the Company becomes a party to the contractual provisions of the instruments.
A financial asset is initially measured at fair value plus, 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.

(b) Subsequent Measurement and Classification:

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

¦ Measured at Amortized Cost;

¦ Measured at Fair Value Through Other Comprehensive Income (FVTOCI);

¦ Measured at Fair Value Through Profit or Loss (FVTPL);

¦ Equity Instruments measured at Fair Value through Other Comprehensive Income (FVTOCI).

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes
its business model for managing financial assets.

Financial assets carried at amortised cost - A financial asset is subsequently measured at amortised cost if it is held
within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. The Company may irrevocably elect at initial recognition to classify a Financial asset that
meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting
mismatch had the financial asset been measured at amortised cost.

Financial assets at fair value through other comprehensive income - A financial asset is subsequently measured at
fair value through other comprehensive income if it is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of the financial assets give rise
on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Asset meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently
measured at fair value with any gains or losses arising on remeasurement recognized in other comprehensive income, except
for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method
is recognized in the Statement of Profit and Loss in investment income.

Financial assets at fair value through profit and loss - Financial assets are measured at fair value through profit or loss
unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The
transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss
are immediately recognised in statement of profit and loss.

Equity Instruments measured at FVTOCI: All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make
an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes
such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. In case
the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.

(c) Derecognition:

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

d) Impairment

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period.
Ind AS 109 requires expected credit losses to be measured through a loss allowance.

12 Income taxes
Accounting Policy

Income Tax comprises current and deferred tax. It is recognized in the statement of Profit and Loss except to the extent that
it relates to an item recognized directly in equity or in other comprehensive income.

Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid to (recovered
from) the taxation authorities using the tax rates (and tax laws) that have been enacted or substantively enacted, at the end
of the reporting period.

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

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts used for taxation purposes (i.e., tax base). Deferred tax is also
recognized for carry forward of unused tax losses and unused tax credits.

Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The company reduces the carrying
amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow
the benefit of part or that entire deferred tax asset to be utilized. Any such reduction is reversed to the extent that it becomes
probable that sufficient taxable profit will be available.

Deferred tax relating to items recognized outside the statement of Profit and Loss is recognized either in other comprehensive
income or in equity. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly
in equity.

14 Inventories (as at cost or net realisable value, whichever is lower)

Accounting Policy

Inventories are valued at Cost or Net Realizable Value, whichever is lower. Costs incurred in bringing each product to its present
location and condition are as follows:

Raw materials, consumables, and packing materials: Cost includes cost of purchase and other costs incurred in bringing
the inventories to their present location and condition. Cost is determined on a weighted average.

Work-in-progress and Finished goods: Cost includes direct materials and labour and a proportion of manufacturing overheads
based on normal operating capacity. Cost of work-in-progress, (measured in Kgs) is determined on weighted average basis and
cost of work-in-progress (measured in Pieces) is determined on retail sales price method. Cost of finished goods is determined
on retail sales price method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.

15.1 In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing
the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss
experience and is adjusted for forward looking information. The expected credit loss allowance is based on ageing of the
receivables and rates used in the provision matrix.

15.2 The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2025 to be H 53,921.64
lacs (March 31, 2024: H 48,050.75 lacs), which is the carrying value of trade receivables after allowance for credit losses.
The Company''s exposure to customers is diversified and no single customer contributes more than 10% of the outstanding
receivables As at March 31, 2025 and March 31, 2024.

15.3 There are no outstanding receivables due from directors or other officers of the Company.

18.4 Rights, preferences and restrictions attached to shares

The Company has one class of issued shares i.e. equity shares having par value of H 2 per share. Each holder of ordinary shares
is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the shareholders in the
ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

18.5 The Company does not have any holding Company or ultimate holding Company.

18.6 No shares have been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment
as at the balance sheet date.

18.7 No convertible securities has been issued by the Company during the year.

18.8 No calls are unpaid by any Director and officer of the Company during the year.

(b) Nature and purpose of reserves

19.1 Securities premium

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions
of the Companies Act, 2013.

19.2 General reserve

General reserve is created out of the profits transferred from the earnings during the year. It is available for distribution to
the shareholders.

19.3 Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or
other distributions paid to shareholders.

19.4 Remeasurement of defined benefit Plans

Remeasurement of defined benefit plans comprises actuarial gains and losses and return on plan asset (excluding interest
income) which are recognised in other comprehensive income and then immediately transferred to retained earnings.

Financial Liabilities
Accounting Policy

Recognition and Initial measurement

Financial liabilities are classified, at initial recognition, as fair value through profit or loss, loans and borrowings, payables or as
derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.

Subsequent Measurement

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is
classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other
financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense
and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized
in statement of Profit and Loss.

De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable
right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the
liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

20.1 Nature of security

a) Term loan from Indian Bank (previously Allahabad Bank) is secured by exclusive first charge over the assets acquired out
of the proceeds of the respective loan and situated at the Dyeing & Bleaching unit of the company at Dist. Erode, Taluk:
Penrundurai, SIPCOT industrial Growth Centre, Tamil Nadu, PIN:938052. Factory land & Building, Windmill properties
are also pledged as collateral security (on pari passu with all consortium banks). The said term loan stand repaid during
the year

b) Term loan from HDFC Bank is secured by exclusive charge on the capital assets procured out of the proceeds of the
respective loan. Personal Guarantee of the promoter directors are also provided as collateral security.

c) As on 31.03.2024, a new Term loan from HDFC Bank (Sanctioned Limit - H 5000 lacs) is secured by exclusive charge on
the capital assets procured out of the proceeds of the respective loan and Pari Passu first charge on Factory Land and
Building of spinning unit on NH7, V. Paddukotal Village, P.O. Minukkampatti, Taluk: Vedasandur, Dist: Dindigul, Tamil Nadu.
Personal Guarantee of the promoter directors are also provided as collateral security.

d) Working capital loan and packing credit from consortium member banks (Total Sanctioned Limit - H 27500 lacs) are
secured by way of hypothecation charge over entire current assets viz. raw materials, stock-in-trade and book debts
both present and future ranking pari passu with other consortium member banks.Factory land & Building, Windmill
properties, entire fixed assets of the company are also pledged as collateral security (on pari passu with all consortium
banks). Furthermore, personal guarantee of promoter directors are provided against the same.

20.2 Repayment terms of loans outstanding As at March 31, 2025

a) Allahabad Bank term loan “V” amounting Nil (March 31, 2024: H Nil lacs) was repayable in 19 equal quarterly instalments
beginning from June, 2019, the loan has been fully repaid during the year 2023-24.

b) HDFC Bank term loan amounting H Nil lacs (March 31, 2024: H 14.38 lacs) is repayable in 20 equal quarterly instalments
beginning from February, 2021, the loan has been fully repaid during the year.

c) HDFC Bank term loan amounting H 4,316.58 lacs (March 31, 2024: H 3,427.15 lacs) is repayable in 16 equal quarterly
instalments beginning from October, 2024, the next instalment is due in April, 2025

d) Working capital loans from banks amounting to H 25,366.78 lacs (March 31, 2024: H 25,113.17 lacs) is repayable
on demand.

20.3 Interest rates on the above loans from banks and body corporate is between 6.50% to 9.15% p.a.

20.4 The Company has filed quarterly returns or statements with the banks in lieu of the sanctioned working capital facilities,

which are not in agreement with the books of account as set out below.

21 Lease liabilities
Accounting Policy

Lease liability is initially measured at the present value of future lease payments. Lease payments are discounted using
the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. Lease liability is
subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability and reducing the carrying
amount to reflect the lease payments made.

A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an
index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.

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Mar 31, 2024

3 Material Accounting Policies

Material accounting policy information has been identified and disclosed based on the guidance provided under Ind AS 1. The material accounting policy information used in preparation of the standalone financial statements have been disclosed in the respective notes.

4 Critical Accounting Estimates and Judgements

The preparation of financial statements require judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period prospectively in which the results are known / materialized. Information about significant judgements and key sources of estimation made in applying accounting policies that have the most

significant effects on the amounts recognized in the

financial statements is included in the following notes:

a) Revenue recognition: Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

b) Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits.

c) Useful lives of depreciable/ amortisable assets (tangible and intangible): Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of plant and equipment.

d) Defined Benefit Obligation (DBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.

e) Provisions and Contingencies: The assessments undertaken in recognising provisions and contingencies have been made in accordance with Indian Accounting Standards (Ind AS) 37, ‘Provisions,

Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.

f) Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.

g) Allowances for Doubtful Debts: The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable amount. The identification of doubtful debts requires use of judgment and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

h) Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be

measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

i) Extension and termination option in leases :

Extension and termination options are included in many of the leases. In determining the lease term the Management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. This assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the Company.

5 Property, plant and equipment

Accounting Policy

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

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of overheads, directly attributable borrowing costs.

Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the

6.1 The company has performed an assessment of its Capital Work-in-Progress for possible triggering events or circumstances for an indication of impairment and has concluded that there were no triggering events or circumstances that would indicate the Capital Work-in-Progress are impaired

6.2 Capital Work-in-Progress amounting to H 1685.01 Lakhs (March 31, 2023 - H 8481.38 Lakhs) have been pledged to secure borrowings of the Company (Refer note 21). Details of charge has been given on the basis of records available with Registrar of Companies.

7 Right of use assets

Accounting Policy

The company recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date. Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset

8 Intangible assets

Accounting Policy

Intangible assets purchased are initially measured at cost. The cost of a separately purchased intangible asset comprises its purchase price including duties and taxes and any costs directly attributable to making the asset ready for their intended use.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Intangible assets (System Oriented Softwares) are amortised on straight line basis over its estimated useful life of 3 years. All other expenditure is recognised in Statement of Profit & Loss as incurred unless such expenditure forms part of carrying value of another asset. The amortisation period and amortisation method are reviewed at least at the end of each financial year. If the expected useful life of assets is significantly different from previous estimates, the amortisation period is revised accordingly.

9.1 The company has performed an assessment of its Intangible assets under development for possible triggering events or circumstances for an indication of impairment and has concluded that there were no triggering events or circumstances that would indicate the Intangible assets under development are impaired.

9.2 Intangible assets under development amounting to H Nil (March 31, 2023 - H 293.12 Lakhs) have been pledged to secure borrowings of the Company (Refer note 21). Details of charge has been given on the basis of records available with Registrar of Companies.

10 Investments in subsidiary & joint venture

Accounting Policy

Investments in Subsidiary and Joint Venture are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.

Impairment of Non - Financial Assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets.

10.1 On 20-01-2023, the company acquired 66.66% of the share capital in M/s. Dollar Garments Private Limited and hence the same is treated as a Subsidiary as it has control over it.

10.2 The company holds 49% of the share capital in the Joint Venture Company. During the year, the Company has provided for impairment on its investment in Joint Venture viz. Pepe Jeans Innerfashions Pvt Ltd (PJIFPL) of H 10.86 Lakhs. Hence, the carrying amount of investment has reduced to H 1178.14 Lakhs against the total investment of H 1497.00 Lakhs.

Financial Asset Accounting Policy

(a) Initial recognition and measurement

All financial assets are initially recognized when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, 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.

(b) Subsequent Measurement and Classification :

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

¦ Measured at Amortized Cost;

¦ Measured at Fair Value Through Other Comprehensive Income (FVTOCI);

¦ Measured at Fair Value Through Profit or Loss (FVTPL);

¦ Equity Instruments measured at Fair Value through Other Comprehensive Income (FVTOCI).

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

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

The Company may irrevocably elect at initial recognition to classify a Financial asset that meets the amortised cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the financial asset been measured at amortised cost.

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

Financial Asset meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the Statement of Profit and Loss in investment income.

Financial assets at fair value through profit and loss - Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.

Equity Instruments measured at FVTOCI: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.

(c) Derecognition:

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

d) Impairment

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Ind AS 109 requires expected credit losses to be measured through a loss allowance.

12.1 Other financial assets amounting to H 346.09 Lakhs (March 31, 2023 - H 501.88 Lakhs) have been pledged to secure borrowings of the Company (Refer note 21). Details of charge has been given on the basis of records available with Registrar of Companies.

13 Income taxes

Accounting Policy

Income Tax comprises current and deferred tax. It is recognized in the statement of Profit and Loss except to the extent that it relates to an item recognized directly in equity or in other comprehensive income.

Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted or substantively enacted, at the end of the reporting period.

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

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes (i.e., tax base). Deferred tax is also recognized for carry forward of unused tax losses and unused tax credits.

Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow

14.1 Balances with Government and statutory authorities include input credit entitlements and other indirect taxes receivable.

14.2 Others include amounts claimed from parties on account of business obligations and advance paid to employees.

14.3 Balances with Government and statutory authorities include H 10.38 Lakhs (March 31, 2023 - H 2.98 Lakhs) for payment made against protest for GST Appeal and Income Tax.(Refer Note No. 39)

14.4 Other assets amounting to H 2032.55 Lakhs (March 31, 2023 - H 1633.11 Lakhs) have been pledged to secure borrowings of the Company (Refer note 21). Details of charge has been given on the basis of records available with Registrar of Companies.

15 Inventories (as at cost or net realisable value, whichever is lower)

Accounting Policy

Inventories are valued at Cost or Net Realizable Value, whichever is lower. Costs incurred in bringing each product to its present location and condition are as follows:

Raw materials, consumables and packing materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average.

Work-in-progress and Finished goods: Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of work-in-progress, (measured in Kgs) is determined on weighted average basis and cost of work-in-progress (measured in Pieces) is determined on retail sales price method. Cost of finished goods is determined on retail sales price method.

16.1 In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing

the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss c

o

experience and is adjusted for forward looking information. The expected credit loss allowance is based on ageing of the

receivables and rates used in the provision matrix. c

a

cc

16.2 The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2024 to be H 48,050.75 s

Lakhs (March 31, 2023: H 42,831.03 Lakhs), which is the carrying value of trade receivables after allowance for credit losses. 1

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The Company''s exposure to customers is diversified and no single customer contributes more than 10% of the outstanding receivables as at March 31, 2024 and March 31, 2023. —

v

N

19.4 Rights, preferences and restrictions attached to shares

The Company has one class of issued shares i.e. equity shares having par value of H 2 per share. Each holder of ordinary shares is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

19.5 The Company does not have any holding Company or ultimate holding Company.

19.6 No shares have been reserved for issue under options and contracts / commitments for the sale of shares / disinvestment as at the balance sheet date.

19.7 No convertible securities has been issued by the Company during the year.

19.8 No calls are unpaid by any Director and officer of the Company during the year.

20.1 Securities premium

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

20.2 General reserve

General reserve is created out of the profits transferred from the earnings during the year. It is available for distribution to the shareholders.

20.3 Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

20.4 Remeasurement of defined benefit Plans

Remeasurement of defined benefit plans comprises actuarial gains and losses and return on plan asset (excluding interest income) which are recognised in other comprehensive income and then immediately transferred to retained earnings.

Financial Liabilities Accounting Policy

Recognition and Initial measurement

Financial liabilities are classified, at initial recognition, as fair value through profit or loss, loans and borrowings, payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent Measurement

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL

are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in statement of Profit and Loss.

De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

21.2 Repayment terms of loans outstanding As at March 31, 2024

a) Allahabad Bank term loan “V” amounting Nil (March 31, 2023: H 78.69 Lakhs) is repayable in 19 equal quarterly instalments beginning from June, 2019, the loan has been repaid during the year

b) HDFC Bank term loan amounting H 14.38 Lakhs (March 31, 2023: H 22.60 Lakhs) is repayable in 20 equal quarterly instalments beginning from February, 2021, the next instalment is due in May, 2024.

c) HDFC Bank term loan amounting H 3427.15 Lakhs (March 31, 2023: Nil) is repayable in 16 equal quarterly instalments beginning from October, 2024.

d) Working capital loans from banks amounting to H 25113.17 Lakhs (March 31, 2023: H 16,060.37 Lakhs) is repayable on demand.

21.3 Interest rates on the above loans from banks and body corporate is between 6.50% to 9.00% p.a.

21.4 The Company has filed quarterly returns or statements with the banks in lieu of the sanctioned working capital facilities, which

are not in agreement with the books of account other than those as set out below .

21.1 Nature of security

a) Term loan from Indian Bank (previously Allahabad Bank) is secured by exclusive first charge over the assets acquired out of the proceeds of the respective loan and situated at the Dyeing & Bleaching unit of the company at Dist. Erode, Taluk: Penrundurai, SIPCOT industrial Growth Centre, Tamil Nadu, PIN:938052. Factory land & Building, Windmill properties are also pledged as collateral security (on pari passu with all consortium banks). The said term loan stand repaid during the year.

b) Term loan from HDFC Bank is secured by exclusive charge on the capital assets procured out of the proceeds of the respective loan. Personal Guarantee of the promoter directors are also provided as collateral security.

c) During the year, for new Term loan from HDFC Bank is secured by exclusive charge on the capital assets procured out of the proceeds of the respective loan and Pari Passu first charge on Factory Land and Building of spinning unit on NH7, V. Paddukotal Village, P.O. Minukkampatti, Taluk: Vedasandur, Dist: Dindigul, Tamil Nadu. Personal Guarantee of the promoter directors are also provided as collateral security.

d) Working capital loan and packing credit from consortium member banks are secured by way of hypothecation charge over entire current assets viz. raw materials, stock-in-trade and book debts both present and future ranking pari passu with other consortium member banks.Factory land & Building, Windmill properties, entire fixed assets of the company are also pledged as collateral security (on pari passu with all consortium banks). Furthermore, personal guarantee of promoter directors are provided against the same.

22 Lease liabilities

Accounting Policy

Lease liability is initially measured at the present value of future lease payments. Lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. Lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease payments made.

A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.

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Mar 31, 2023

1 CORPORATE AND GENERAL INFORMATION

Dollar Industries Limited (the Company), was incorporated in India in the year 1993. The Company is domiciled in India, and has its registered office in Om Towers, 32, J.L Nehru Road, Kolkata - 700 071.

The Company is a Public Limited Company incorporated as per the provision of Companies Act applicable in India. The Company is primarily engaged in manufacture and sale of hosiery products in knitted inner wears, casual wears and thermal wears. It also has a Power Generation Unit sourced from Windmill and Solar. The shares of the Company are listed on National Stock Exchange of India Limited and Bombay Stock Exchange.

2 BASIS OF ACCOUNTING2.1 Statement of compliance

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act), read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended), other relevant provisions of the Act and other accounting principles generally accepted in India.

The financial statements of the Company for the year ended March 31, 2023 have been approved by the Board of Directors in their meeting held on May 30, 2023.

2.2 Basis of measurement

The financial statements have been prepared on historical cost basis, except certain financial assets and liabilities (including derivative instruments) that is measured at fair value/amortised cost.

2.3 Functional and presentation currency

The financial statements have been presented in Indian Rupee (''), which is also the Company''s functional currency. All financial information presented in '' has been rounded off to the nearest lacs as per the requirements of Schedule III, unless otherwise stated.

2.4 Current/Non-current classification

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

The asset/liability is classified as current if it satisfies any of the following conditions:

¦ the asset/liability is expected to be realized/settled in the Company''s normal operating cycle;

¦ the asset is intended for sale or consumption;

¦ the asset/liability is held primarily for the purpose of trading;

¦ the asset/liability is expected to be realized/settled within twelve months after the reporting period;

¦ the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;

¦ in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

The Company classifies all other assets and liabilities as non-current.

For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents.

2.5 Use of estimates and judgements

The preparation of financial statements require judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period prospectively in which the results are known / materialized.

3 SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the financial statements is as given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

3.1 Property, Plant and Equipment

a) Recognition and Measurement

Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).

Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.

I n case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use, and estimated cost of dismantling and removing the item and restoring the site on which it is located. The costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location and condition are also added to the cost of self-constructed assets.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

b) Subsequent Expenditure

Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.

Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any unamortized part of the previously recognized expenses of similar nature is derecognized.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet

date is classified as Capital Advances under other noncurrent assets.

c) Depreciation and Amortization

Depreciation is provided on written down method at the rates determined based on the useful lives of respective assets as prescribed in the Schedule II of the Act.

As per the Above policy, depreciation on the solar plant have been provided at the rate which are different from the corresponding rates prescribed in Schedule II based on the estimated useful life of the project.

	Useful life estimated	Useful life as
	by the management	per schedule II
Solar Plant	25 years

Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date on which asset is ready for use (disposed off).

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

d) Disposal of Assets

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

e) Capital Work in Progress

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.

3.2 Intangible Assets

Software which is not an integral part of related hardware is treated as intangible asset and are stated at cost on initial recognition and subsequently measured at cost less accumulated amortization and accumulated impairment loss, if any.

a) Recognition and Measurement

I ntangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful economic lives.

b) Subsequent Expenditure

Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. All other expenditure is recognized in the Statement of Profit & Loss.

c) Amortization

¦ Intangible assets are amortized over a period of 3 years.

¦ The amortization period and the amortization method are reviewed at least at the end of each financial year. If the expected useful life of the assets is significantly different from previous estimates, the amortization period is revised accordingly.

d) Disposal

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit & Loss.

e) Intangible Assets under Development

Intangible Assets under development is stated at cost which includes expenses incurred in connection with development of Intangible Assets in so far as such expenses relate to the period prior to the getting the assets ready for use.

3.3 Investment in Subsidiary and Joint Ventures

Investments in Subsidiary and Joint Venture are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiary and joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the standalone statement of profit and loss.

3.4 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.

a) Financial Assets

Recognition and Initial Measurement:

All financial assets are initially recognized when the Company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, 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.

Classification and Subsequent Measurement:

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

¦ Measured at Amortized Cost;

¦ Measured at Fair Value Through Other Comprehensive Income (FVTOCI);

¦ Measured at Fair Value Through Profit or Loss (FVTPL); and

¦ Equity Instruments measured at Fair Value through Other Comprehensive Income (FVTOCI).

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

Measured at Amortized Cost: A debt instrument is measured at the amortized cost if both the following conditions are met:

¦ The asset is held within a business model whose objective is achieved by both collecting contractual cash flows; and

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

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.

Measured at FVTOCI: A debt instrument is measured at the FVTOCI if both the following conditions are met:

¦ The objective of the business model is achieved by both collecting contractual cash flows and selling the financial assets; and

¦ The asset''s contractual cash flows represent SPPI.

Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the Statement of Profit and Loss in investment income.

Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as amortized cost or as FVTOCI, is classified as FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Equity Instruments measured at FVTOCI: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.

Derecognition

The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Impairment of Financial Assets

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and/ or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

b) Financial Liabilities

Recognition and Initial Measurement

Financial liabilities are classified, at initial recognition, as fair value through profit or loss, loans and borrowings, payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent Measurement

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in Statement of Profit and Loss.

De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally

enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

c) Derivative financial instruments

The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately.

3.5 Impairment of Non-Financial Assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).

An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

3.6 Income Tax

I ncome Tax comprises current and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent that it relates to an item recognized directly in equity or in other comprehensive income.

a) Current Tax

Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted or substantively enacted, at the end of the reporting period.

b) Deferred Tax

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

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes (i.e., tax base). Deferred tax is also recognized for carry forward of unused tax losses and unused tax credits.

Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The Company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available.

Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized either in other comprehensive income or in equity. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

3.7 Inventories

Inventories are valued at Cost or Net Realizable Value, whichever is lower. Costs incurred in bringing each product to its present location and condition are as follows:

Raw materials, consumables, and packing materials:

Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average.

Work-in-progress and Finished goods: Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of work-in-progress, (measured in Kgs) is determined on weighted average basis and cost of work-in-progress (measured in Pieces) is determined on retail sales price

method. Cost of finished goods is determined on retail sales price method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

3.8 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.

3.9 Provisions, Contingent Liabilities and Contingent Assets

a) Provisions

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

b) Onerous Contracts

Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist when a contract under which the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received from it.

c) Contingent Liabilities

Contingent liability is a possible obligation arising 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 the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses

the existence of contingent liabilities in other Notes to Financial Statements.

d) Contingent Assets

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.

3.10 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 payment is being made. 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.

a) Sale of Goods

Sale of goods is recognised at the point in time when control of the goods is transferred to the customer. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. As the period between the date on which the Company transfers the promised goods to the customer and the date on which the customer pays for these goods is generally one year or less, no financing components are taken into account.

Certain contracts provide a customer with a right to return the goods within a specified period. The company uses the expected value method to estimate the goods that will not be returned because this method best predicts the amount of variable consideration to which the company will be entitled. The requirements in Ind AS 115 on constraining estimates of variable consideration are also applied in order to determine the amount of variable consideration that can be included in the transaction price for goods that are expected to be returned instead of revenue the Company recognises a refund liability. A right of return asset and corresponding adjustment to change in inventory is

also recognised for the right to recover products from a customer.”

b) Sale of Services

In contracts involving the rendering of services, revenue is measured using the completed service method.

c) Other Operating Revenue

Export incentive and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions and the incentive will be received. Insurance & other claims, where quantum of accruals cannot be ascertained with reasonable certainty are recognized as income only when revenue is virtually certain which generally coincides with receipt/acceptance.

d) Interest Income

For all financial instruments measured at amortized cost, Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the expected lift of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset.

e) Dividend Income

Dividend Income from investments is recognized when the Company''s right to receive payment has been established.

3.11 Government Grants

Government grants are recognized at their fair values when there is reasonable assurance that the grants will be received and the Company will comply with all the attached conditions. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Grants related to purchase of property, plant and equipment are included in nonfinancial liabilities as deferred income and are credited to the Statement Profit and Loss on a straight line basis over the expected useful life of the related asset and presented within other operating revenue.

3.12 Leases

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

Company as a lessee

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the lease term or useful life of right-of-use asset.

The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The

lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised insubstance fixed lease payments. The Company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.

The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.

Lease liability and ROU asset have been disclosed separately on the face of the Balance Sheet and lease payments have been classified as financing cash flows.

Company as a lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight- line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor''s net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract.

3.13 Foreign Currency Transactions

The financial statements of the Company are presented in Indian Rupees (?) which is the functional currency

of the Company and the presentation currency of the financial statements.

Foreign currency transactions are translated into the functional currency using the spot rates of exchanges at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchanges at the reporting date.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are generally recognized in Statement of Profit and Loss in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those qualifying assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings, the balance is presented in the Statement of Profit and Loss within finance costs.

Non-monetary items are not retranslated at period end and are measured at historical cost (translated using the exchange rate at the transaction date).

3.14 Employee Benefits

a) Short Term Benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period.

b) Post-Employment Benefits

The Company operates the following postemployment schemes:

Defined Benefit Plans

The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior

periods. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method.

The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation.

Remeasurement of the net defined benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the Statement of Profit and Loss.

Defined Contribution Plan

Defined contribution plans such as provident fund, ESI etc. are charged to the Statement of Profit and Loss as and when incurred.

3.15 Borrowing Cost

Borrowing Costs consists of interest and other costs that an entity incurs in connection with the borrowings of funds. Borrowing costs also include exchange difference to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.

Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.

3.16 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions

of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

3.17 Measurement of Fair Values

A number of the Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

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 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 — Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

¦ Level 3 — Inputs which are unobservable inputs for the asset or liability.

External valuers are involved for valuation of significant assets & liabilities. Involvement of external valuers is decided by the management of the Company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

3.18 Operating Segment

The Company''s business activity falls within a single significant primary business segment i.e. ‘hosiery and related service''. They are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

3.19 Recent Indian Accounting Standards (Ind AS) issued not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1st, 2023, as below:

Ind AS 1 - Material accounting policies

The amendments mainly related to shifting of disclosure of erstwhile “significant accounting policies” in the notes to the financial statements to material accounting policy information requiring companies to reframe their accounting policies to make them more “entity specific””. This amendment aligns with the “material” concept already required under International Financial Reporting Standards(IFRS).

Ind AS 8 - Definition of accounting estimates

The amendments specify definition of ‘change in accounting estimate'' replaced with the definition of ‘accounting estimates''.

Ind AS 12 - Annual Improvements to Ind AS (2021)

The amendment clarifies that in cases of transactions where equal amounts of assets and liabilities are recognised on

initial recognition, the initial recognition exemption does not apply. Also, if a company has not yet recognised deferred tax asset and deferred tax liability on right-of-use assets and lease liabilities or has recognised deferred tax asset or deferred tax liability on net basis, that company shall have to recognise deferred tax assets and deferred tax liabilities on gross basis based on the carrying amount of right-of-use assets and lease liabilities existing at the beginning of April 1st, 2023.

Based on preliminary assessment, the Company does not expect the amendments listed above to have any significant impact in its financial statements

3.20 Earnings per share

Basic earnings per share is computed by dividing profit or loss for the year attributable to equity holders by the weighted average number of shares outstanding during the year. Partly paid up shares are included as fully paid equivalents according to the fraction paid up.

Diluted earnings per share is computed using the weighted average number of shares and dilutive potential shares except where the result would be anti-dilutive.

4 SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES

Information about significant judgements and key sources of estimation made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

a) Revenue recognition: Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of

significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

b) Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits.

c) Useful lives of depreciable/ amortisable assets (tangible and intangible): Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of plant and equipment.

d) Defined Benefit Obligation (DBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.

e) Provisions and Contingencies: The assessments undertaken in recognising provisions and contingencies have been made in accordance with Indian Accounting Standards (Ind AS) 37, ‘Provisions, Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.

f) Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.

g) Allowances for Doubtful Debts: The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable amount. The identification of doubtful debts requires use of judgment and estimates.

Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

h) Fair value measurement of financial instruments: When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

i) Extension and termination option in leases : Extension and termination options are included in many of the leases. In determining the lease term the Management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. This assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the Company.

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Mar 31, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the financial statements is as given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

1.1 Inventories

Inventories are valued at Cost or Net Realizable Value, whichever is lower. Cost incurred in bringing each product to its present location and condition are as follows:

Raw materials, consumables, and packing materials:

Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average.

Work-in-Progress and Finished goods:

Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of Work-in-progress, (measured in Kgs) is determined on Weighted Average basis and cost of work-in-progress (measured in Pieces) is determined on Retail sales price method. Cost of finished goods is determined on Retail sales price method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.2 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.

1.3 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Income Tax

Income Tax comprises current and deferred tax. It is recognized in The Statement of Profit and Loss except to the extent that it relates to an item recognized directly in equity or in other comprehensive income.

1.4.1. Current Tax

Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted or substantively enacted, at the end of the reporting period.

1.4.2. Deferred Tax

- Deferred Tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

- Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes (i.e., tax base). Deferred tax is also recognized for carry forward of unused tax losses and unused tax credits.

- Deferred tax assets are recognized 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 utilized.

- The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The Company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available.

- Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized either in other comprehensive income or in equity. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

1.5 Property, Plant and Equipment

1.5.1. Recognition and Measurement:

- Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).

- Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.

- In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use, and estimated cost of dismantling and removing the item and restoring the site on which it is located. The costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location and condition are also added to the cost of self-constructed assets.

- If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

- Profit or loss arising on the disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.

1.5.2. Subsequent Expenditure

- Subsequent costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.

- Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is derecognized.

- Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as Capital Advances under other non-current assets.

1.5.3. Depreciation and Amortization

- Depreciation on tangible assets is provided on written down method at the rates determined based on the useful lives of respective assets as prescribed in the Schedule II of the Act.

- Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date on which asset is ready for use (disposed of).

- Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

1.5.4. Disposal of Assets

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.

1.5.5. Capital Work in Progress

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.

1.6 Intangible Assets

Software which is not an integral part of related hardware is treated as intangible asset and are stated at cost on initial recognition and subsequently measured at cost less accumulated amortization and accumulated impairment loss, if any.

1.6.1. Subsequent Expenditure

Subsequent costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. All other expenditure is recognized in the Statement of Profit & Loss.

1.6.2. Amortization

- Other Intangible assets are amortized over a period of 3 years.

- The amortization period and the amortization method are reviewed at least at the end of each financial year. If the expected useful life of the assets is significantly different from previous estimates, the amortization period is revised accordingly.

1.7 Leases

1.7.1. Determining whether an arrangement contains a lease

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 fulfillment 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.

For arrangements entered prior to the date of transition, the company has determined whether the arrangement contains a lease on the basis of facts and circumstances existing on the date of transition.

1.7.2. Company as lessor - Finance Lease

Leases which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item are classified and accounted for as finance lease. Lease rental receipts are apportioned between the finance income and capital repayment based on the implicit rate of return. Contingent rents are recognized as revenue in the period in which they are earned.

- Operating Lease

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease except where scheduled increase in rent compensates the Company with expected inflationary costs.

1.7.3 Company as lessee

- Finance Lease

Finance Leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease Payments under such leases are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly to the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

- Operating Lease

Assets acquired on leases where a significant portion of risk and reward is retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on a straight-line basis over the lease term, except where scheduled increase in rent compensates the Company with expected inflationary costs.

1.8 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 payment is being made. 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.

1.8.1. Sale of Goods

Revenue from the sale of goods is recognized when significant risks and rewards of ownership of goods have passed to the buyer, usually on dispatch of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivables, net of returns and allowances and trade discounts.

1.8.2. Rendering of Services

Revenue from services is recognised when the stage of completion can be measured reliably. Stage of completion is measured by the services performed till balance sheet date as a percentage of total services contracted.

1.8.3. Interest Income

For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected credit losses. Interest income is included in finance income in the statement of profit and loss.

1.8.4 Other Operating Revenue

Incentive such as Export incentive etc. and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions and the incentive will be received.

1.9 Employee Benefits

1.9.1. Short Term Benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period.

1.9.2. Post Employment Benefits

The Company operates the following post employment schemes:

- Defined Benefit Plans

The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method.

The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The benefits are discounted using the government securities (G-Sec) at the end of the reporting period that have terms approximating to the terms of related obligation.

Remeasurement of the net defined benefit obligation, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling, are recognized in other comprehensive income. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss.

- Defined Contribution Plan

Defined contribution plans such as provident fund, ESI etc are charged to the statement of profit and loss as and when incurred.

1.10 Government Grants

Government grants are recognized at their fair values when there is reasonable assurance that the grants will be received and the Company will comply with all the attached conditions. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Grants related to purchase of property, plant and equipment are included in non-financial liabilities as deferred income and are credited to the Statement Profit and Loss on a straight line basis over the expected useful life of the related asset and presented within other operating revenue.

1.11 Foreign Currency Transactions

The financial statements of the Company are presented in Indian Rupees (Rs.) which is the functional currency of the company and the presentation currency of the financial statements.

Foreign currency transactions are translated into the functional currency using the spot rates of exchanges at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchanges at the reporting date.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are generally recognized in profit or loss in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those qualifying assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings, the balance is presented in the Statement of Profit and Loss within finance costs.

Non monetary items are not retranslated at period end and are measured at historical cost (translated using the exchange rate at the transaction date).

1.12 Borrowing Cost

Borrowing Costs consists of interest and other costs that an entity incurs in connection with the borrowings of funds. Borrowing costs also include exchange difference to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.

Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

1.13 Investment in Joint Ventures

Investments in joint venture is carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and an impairment provision is recognised, if required immediately, to its recoverable amount. On disposal of such investments, difference between the net disposal proceeds and carrying amount is recognised in the statement of profit and loss.

1.14 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.

1.14.1. Financial Assets

- Recognition and Initial Measurement:

All financial assets are initially recognized when the company becomes a party to the contractual provisions of the instruments. A financial asset is initially measured at fair value plus, 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.

- Classification and Subsequent Measurement:

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

- Measured at Amortized Cost;

- Measured at Fair Value Through Other Comprehensive Income (FVTOCI);

- Measured at Fair Value Through Profit or Loss (FVTPL); and

- Equity Instruments measured at Fair Value through Other Comprehensive Income (FVTOCI).

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

Measured at Amortized Cost: A debt instrument is measured at the amortized cost if both the following conditions are met:

- The asset is held within a business model whose objective is achieved by both collecting contractual cash flows; and

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

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.

Measured at FVTOCI: A debt instrument is measured at the FVTOCI if both the following conditions are met:

- The objective of the business model is achieved by both collecting contractual cash flows and selling the financial assets; and

- The asset’s contractual cash flows represent SPPI.

Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the statement of profit and loss in investment income.

Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as FVTPL. In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

Equity Instruments measured at FVTOCI: All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. In case the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.

- Derecognition

The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

- Impairment of Financial Assets

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The company recognizes lifetime expected losses for all contract assets and/ or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

1.14.2. Financial Liabilities

- Recognition and Initial Measurement

Financial liabilities are classified, at initial recognition, as at fair value through profit or loss, loans and borrowings, payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

- Subsequent Measurement:

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

- Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

- Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

1.14.3. Derivative financial instruments

The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to interest rate and foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately.

1.15 Impairment of Non-Financial Assets

- The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (Cash Generating Units - CGU).

- An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

1.16 Provisions, Contingent Liabilities and Contingent Assets

1.16.1. Provisions

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

1.16.2. Contingent Liabilities

Contingent liability is a possible obligation arising 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 the Company or a present obligation that arises from past events but is not recognized because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent liabilities in Other Notes to Financial Statements.

1.16.3. Contingent Assets

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.

1.17 Operating Segment

The Company’s business activity falls within a single significant primary business segment i.e. ‘hosiery and related service’. They are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

1.18 Measurement of Fair Values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

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 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 — Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 — Inputs which are unobservable inputs for the asset or liability.

External valuers are involved for valuation of significant assets & liabilities. Involvement of external valuers is decided by the management of the company considering the requirements of Ind As and selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

1.19 Standards Issued but not yet Effective

The standard issued but not yet effective up to the date of issuance of the Company’s financial Statements is disclosed below. The company intends to adopt this Standard when it becomes effective.

- Ind AS 115 - Revenue from Contracts with Customers.

- Appendix B to Ind AS 21 - The Effect of Changes in Foreign Exchange Rates. Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establishes a single model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard, Ind AS 18 “Revenue” and Ind AS 11 “Construction Contracts” when it becomes effective. The core principle of Ind AS 115 is that, an entity should recognize revenue to depict the transfer of promised goods and services to customers in an account that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. The new standard also requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue. Based on the preliminary assessment of the Company, the impact of the application of the Standard is expected to be not material.

Appendix B to Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendment 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 impact of the Appendix, on the financial statements, as assessed by the Company, is expected to be not material.

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Mar 31, 2017

(A) Basis of preparation of Financial Statements

The financial statements have been prepared on accrual basis under the historical cost convention and in accordance with the Generally Accepted Accounting Principles in India ( Indian GAAP ), including the applicable mandatory Accounting Standards as precribed under section 133 of The Companies Act, 2013 read with rule 7 of the Companies ( Accounts ) Rule, 2014.

(B) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgement, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

(C) Tangible Fixed Assets and Capital Work-in-Progress

(i) Fixed Assets, except Land, are stated at cost less accumulated depreciation. The cost of the assets comprise its purchase price, borrowing cost and any other cost directly attributable to bringing the asset to its working condition for its intended use. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. This applies mainly to components for machinery. When significant parts of fixed assets are required to be replaced at intervals, the company recognizes such part as individual assets with specific useful lifes and depreciates them accordingly. Subsequently expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

(ii) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses are shown as Capital Work in Progress. However, amount have been appropriated out of Capital Work in Progress to the respective fixed assets on their completion during the previous year by the management.

(D) Intangible Fixed Assets

Intangible assets are stated at acquisition cost net of accumulated amortization and accumulated impairment loss, if any. The cost of the intangible assets comprises purchase price, borrowing cost and any other cost directly attributable to bringing the asset to its working condition for its intended use.

(E) Depreciation and Amortisation

(i) Depreciation on fixed assets is provided to the extent of depreciable amount on the written Down Value (WDV) Method based on the useful lives of respective assets as estimated by the management and/or based on the useful lives prescribed in Schedule II to the Companies Act, 2013. The identified components are depreciated over their useful lives as estimated by the management.

(ii) Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

(F) Impairment of Assets

The carrying amounts of assets ( tangible and intangible ) are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favourable change in the estimate of the recoverable amount.

(G) Investments

(i) Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as Current Investments. All other investments are classified as Non- Current Investments.

(ii) Non-Current Investments are stated at cost. The diminution, if any, in the value of investment, is recognised when such diminution is considered other than temporary in the opinion of the management.

(iii) On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

(H) Inventories

(i) Raw Materials ( including packing materials ) are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be used are expected to be sold at or above cost.

(ii) Finished goods are valued at lower of cost and net realizable value. Cost of inventories comprises material cost on FIFO basis, labour and manufacturing overheads incurred in bringing the inventories to their present location and condition.

(iii) Inter-divisional transfers are valued, at works/factory costs of the transferor unit/division, plus other charges.

(iv) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(I) Foreign Currency Transactions

(i) Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency as at the date of the transaction.

(ii) Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction.

(iii) Exchange Differences: Exchange differences arising on the settlement of monetary items are recognised as income or as expense in the year in which they arise.

(iv) Forward Exchange Contracts: The Company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Statement of Profit & Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of foreign exchange contract is recognised as income or expense for the year.

(v) Derivative Financial Instruments and Hedging: The Company enters into derivative financial instruments to hedge foreign currency risk of firm commitments and highly probable forecast transactions and interest rate risk. The method of recognizing the resultant gain or loss depends on whether the derivative is designated as Hedging instrument, and if so, the nature of the item being hedged. The carrying amount of a derivative designated as a hedge is presented as a current asset or a liability.

(vi) Cash Flow Hedge: Forward exchange contracts entered into to hedge foreign currency risks of firm commitments or highly probable forecast transactions, forward rate options, currency and interest rate swap that qualifies as cash flow hedges are recorded in accordance with the principles of hedge accounting enunciated in Accounting Standard (AS) 30 - “Financial Instruments: Recognition and Measurement”issued by the Institute of Chartered Accountants of India. The gains or losses on designated hedging instruments that qualify as effective hedges are recorded in the Hedging Reserve account and are recognized in the statement of Profit and Loss in the same period or periods during which the hedge transactions affect Profit and Loss Account.

(J) Revenue Recognition

(i) Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(ii) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract. Sales are inclusive of delivery charges, if any, and net of Trade Discounts and VAT/Sales Tax. But incentive schemes, cash discounts and rebates are seperately booked as expenditure.

(iii) In contracts involving the rendering of services, revenue is measured using the completed service method.

(iv) Sale of power to Tamil Nadu Electricity Board (TNEB) is accounted for based on the meter reading as per the metering equipments of TNEB installed at the Power Grid.

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

(vi) Export Incentives are recognised when the right to receive such incentives as per the applicable terms is established in respect of the exports made and when there is no significant uncertainity regarding the ultimate realisation/ utilisation of such incentives.

(vii) Insurance and other claims due to uncertainty in realisation are accounted for on settlement/realization.

(viii) Other income is accounted for on accrual basis as and when the right to receive arises.

(K) Employee Benefits

(i) Employee benefits of short term nature are recognized as expense as and when it accrues. Employee benefits of long term nature are recognized as expenses based on actuarial valuation using projected unit credit method.

(ii) Contributions are made to Provident Fund and Employees State Insurance as per the provisions of Provident Fund Act and ESI Act respectively and are charged to the Statement of Profit and Loss. The Company has no further obligations beyond its monthly contributions to the respective funds. Provision for Leave Encashments are not made and are recognised as and when incurred. Termination benefits are recognised as expenditure as and when incurred.

(iii) The Company has provided for gratuity covering eligible employees. Company’s gratuity policy provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. The manangement has changed the company’s gratuity policy from cash basis to accrual basis starting from the current financial year. Previously, the company was not making any provision for gratuity and recognised it as and when incurred.

(L) Borrowing Costs

(i) Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

(ii) Other Borrowing costs are recognised as expense in the period in which they are incurred.

(M) Taxation

(i) Current Tax: Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternative Tax credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal tax during the specified period.

(ii) Deferred Tax: The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised only if there is a virtual certainty of their realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to obtain reassurance as to realisation.

(N) Provisions, Contingent Liabilities and Contingent Assets

(i) Provision involving substantial degree of estimation in measurements is 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. Provisions are not discounted to their present value and are determied by the management based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

(ii) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

(iii) A Contingent Asset is not recognized in the Accounts.

(O) Operating Leases

Assets taken on lease, under which all the risks and rewards of ownership are effectively retained by the lessor, are classified as operating lease. Operating Lease payments are recognised as an expense in the Profit & Loss Account on a straight line basis over the lease term.

(P) Research & Development Expenses

Revenue expenditure on Research and Development is charged as an expense through the normal heads of account in the year in which the same is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and is depreciated according to the policy followed by the Company.

(Q) Government Grants

(i) Grants and subsidies from the governmnet are recognized when there is reasonable assurance that the company will comply with the conditions attached to them, and the grant/subsidy will be received.

(ii) When the grant or subsidy relates to revenue, it is recognized as income on systematic basis in the statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate. When the grant or subsidy relates to an asset, its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset.

(R) Segment Reporting

Based on the synergies, risks and returns associated with the business operations and in terms of Accounting Standard - 17, the company is predominantly engaged in a single segment of Hosiery goods and related services during the year. The analysis of the geographical segments is based on the areas in which the company’s customers are located.

(S) Earning Per Share

(i) Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(T) Dividend

Dividend payable on equity shares including dividend distribution taxes is recorded as a liability, in the period to which it relates, by the management on prudent basis. The same is subject to approval by the shareholders of the Company.

(U) Corporate Social Responsibility

The Company has been an early adopter of CSR initiatives. The company works primarily through its registered trust, viz. Dollar Foundation and also through other Trusts/Intitutions which are primarily engaged in projects for supporting in eradication of hunger, poverty and malnutrition, promoting education, art and culture, healthcare including preventive healthcare and protection and welfare of cows through Goshalas.

(V) Material Events occuring after Balance Sheet date are taken into consideration.

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Mar 31, 2015

[A) Basis of preparation of Financial Statement

The financial statements have been prepared to comply with (he Generally Accepted Accounting Principles in India (Indian GAAP ), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under (he historical cost convention.

(B) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgment, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known/materialized.

(C) Fixed Assets & Depreciation

(i) Fixed Assets are slated a t cost less accumulated depreciation. The cost of the assets comprise its purchase price, borrowing cost and any other cost directly attributable to bringing 1he asset to its working condition for its intended use. Subsequently expenditures related to an item of fixed asset are abided to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

(Ii) The amount shown under the bead ''Capital Work in progress" has been appropriated towards respective fixed assets on their completion.

(iii) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses is shown as Capital Work in Progress/Intangible Assets under development.

(iv) Depredation on Fixed Assets is provided to the extent of depreciable amount on the written down Value (WDV) Method. Depreciation is provided based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

(D) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal /external factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment costs is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has Seen a favorable change in the estimate of the recoverable amount.

(E) Foreign Currency Transactions

(i) Initial Recognition: Foreign currency Transactions are recorded in (he reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and (he foreign currency as at the date of the transaction.

(ii) Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate al the date of the transaction.

(iii) Exchange Differences: Exchange differences arising on the settlement of monetary items are recognized as income or as expense in the year in which they arise.

(iv) Forward Exchange Contracts. The Company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes. The premium or discount arising and the inception of forward exchange contract is amortized as expense or income over the Site of the contract. Exchange differences on such contract are recognized in the Statement of Profit & Loss in the year in which the exchange rates change. Any profit or loss arising on cancelation or renewal of foreign exchange contact is recognized as income or expense for the year.

(v) Derivative Financial Instruments and Hedging : The Company enters info derivative financial instruments to hedge foreign currency risk of firm commitment and highly probable forecast transactions and Interest rate risk. The method of recognizing the resultant gain or loss depends on whether the derivative is designated as Hedging instrument, and if so, the nature of the item being hedged The carrying amount of a derivative designated as a hedge is presented as a current asset or a liability.

(vi) Cash Flow Hedge : Forward exchange contracts entered into to hedge foreign currency risks of firm commitment or highly probable forecast transactions, forward rate options, currency and interest rates w a p that qualifies as cash flow hedges are recorded in accordance with the principles of hedge accounting enunciated in Accounting Standard (AS) 30 - ''financial Instruments: Recognition and Measurement" issued by the Institute of Chartered Accountants of India. The gains or losses on designated hedging instruments that qualify as effective hedges are recorded In the Hedging Reserve account and are recognized in the statement of Profit and Loss in the same period or periods during which the hedge transactions affect Profit and Loss Account.

(F) Investments

Non-Current Investments are stated at cost. The diminution, if any. in the value of investment, is recognized when such diminution is considered other than temporary.

(G) Inventories

(i) Raw Materials and finished goods are valued at Cost or Net Realizable value, whichever is Lower.

(ii) Cost of inventories comprises material cost on FIFO basis, labour and manufacturing overheads incurred in bringing the inventories to their present location and condition,

(iii) Inter-divisional transfers are valued, either at works factory costs of the transferor unit/division, plus other charges

(H) Revenue Recognition

(i) Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

{ii) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred [o the buyer- under the terms of the contract. Sates are inclusive of excise duty and delivery charges. if any and net of Trade Discounts. Gut incentive schemes, cash discounts and rebates are separately booked as expenditure. However, excise duly relating !o sates is reduced from gross turnover for disclosing net turnover.

(iii) Sale of power to Tamil Nadu Electricity Board (TNEB) is accounted for based on the meter reading as per the metering equipments of TN£ B in stated at the Power Grid,

(iv) Interest income Is recognized on a lime proportion basis taking into account the amount outstanding and the rate applicable.

(v) Other income is accounted for on accrual basis as and when the right to recede arises.

(I) Employee Benefits

Contributions are made to Provident Fund and Employees State Insurance as per the provisions of Provident Fund Act and £ SI Act respectively and are charged to the profit and Loss account. The Company has no further obligations beyond its monthly contributions to the respective funds, Provision for gratuity and leave encashment are not made and are recognized as and when incurred Termination benefits are recognized as expenditure as and when incurred.

(J) Borrowing Costs

(I) Borrowing costs that are directly attributable to the acquisition. construction or production of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily fakes substantial period of time to get ready for its intended use.

(ii) Otter Borrowing costs are recognized as expense in the period in which they are incurred.

(K) Research & Development Expenses

Revenue expenditure on Research and Development is charged as an expense through the normal heads of account in the year in which the same is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and is depreciated according to the policy followed by the Company.

(L) Taxation

(i) Current Tax: Provision for current lax is made on the assessable income at the tax rate applicable lo the relevant assessment year. Minimum Alternative Tax credit is recognized as an asset only When and to the extent there is convincing evidence that the Company will pay normal tax during the specified period

(ii) Deferred Tax: The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enabled or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tan laws, are unrecognized only if there is a virtual certainly of their realization, supported by convincing evidence. Deferred (ax assets on account of other liming differences are recognized, only to the extent there is a reasonable certainty or its realization. At each Balance Sheet that, the carrying amount of deferred tax assets is reviewed to obtain reassurance as to realization.

(M) Previsions, Contingent Liabilities and Contingent Assets

(i} Provision Involving substantial degree of estimation in measurement is 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.

(ii) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence al the Balance Sheet date is considered not probable.

(iii) A Contingent Asset is not recognized in the Accounts,

(N) Earnings Per Share

(i) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(O) Export Incentives

Export incentives are accounted for on the basis of export sales effected during the period on accrual basis.

(P) Leases

Assets taken on lease, under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight Ii ne basis over the lease term.

(Q) Material Even is occurring after Balance- Sheet date are taken into consideration.

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Mar 31, 2014

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST MARCH, 2014

Note: 1 ¦ Significant Accounting Policies

(A) Basis of Accounting

(i) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

(ii) The Financial Statements are prepared to comply in all material aspects with the accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(iii) All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI (Revised) to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as

12 months for the purpose of current/non-current classification of assets and liabilities.

(i v) The preparation of the Financial Statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known/materialize.

(B) Fixed Assets & Depreciation

(i) Fixed Assets are stated at cost less accumulated depreciation.

(ii) Depreciation on all fixed assets except Land is provided on written down value method on pro-rata basis as per the rates prescribed under Schedule XIV of the Companies Act, 1956.

(iii) The amount shown under the head "Capital Work in progress" has been appropriated towards respective fixed assets on their completion.

(iv) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses is shown as Capital Work in Progress/Intangible Assets under development.

(C) Revenue Recognition

(i) Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(ii) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract. Sales are inclusive of excise duty and delivery charges, if any and net of Trade Discounts. But incentive schemes, cash discounts and rebates are separately booked as expenditure. However, excise duty relating to sales is reduced from gross turnover for disclosing net turnover.

(iii) Sale of power to Tamil Nadu Electricity Board (TNEB) is accounted for based on the meter reading as per the metering equipments of TNEB installed at the Power Grid.

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

(v) Other income is accounted for on accrual basis as and when the right to receive arises.

(D) Inventories

(i) Raw Materials and finished goods are valued at Cost or Net Realizable value, whichever is lower.

(ii) Cost of inventories comprises material cost on FIFO basis, labor and manufacturing overheads incurred in bringing the inventories to their present location and condition.

(iii) Inter-divisional transfers are valued, either at works/factory costs of the transferor unit/division, plus other charges.

(E) Investments

Non-Current Investments are stated at cost. The diminution, if any, in the value of investment, is recognized when such diminution is considered other than temporary.

(F) Earning Per Share

(I) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(G) Provisions, Contingent Liabilities and Contingent Assets .

(I) Provision involving substantial degree of estimation in measurements is 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.

(ii) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(iii) A Contingent Asset is not recognized in the Accounts.

(H) Taxation

(I) Current Tax: Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal tax during the specified period.

(ii) Deferred Tax: The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized only if there is a virtual certainty of their realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized, only to the extent the reinsure reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to obtain reassurance as to realization.

(I) Foreign Currency Transactions

(i) Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency as at the date of the transaction.

(ii) Conversion : Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction.

(iii) Exchange Differences : Exchange differences arising on the settlement of monetary items are recognized as income or as expense in the year in which they arise.

(iv) Forward Exchange Contracts: The Company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit & Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of foreign exchange contract is recognized as income or expense for the year.

(v) Derivative Financial Instruments and Hedging : The Company enters into derivative financial instruments to hedge foreign currency risk of firm commitments and highly probable forecast transactions and interest rate risk. The method of recognizing the resultant gain or loss depends on whether the derivative is designated as Hedging instrument, and if so, the nature of the item being hedged. The carrying amount of a derivative designated as a hedge is presented as a current asset or a liability.

(vi) Cash Flow Hedge : Forward exchange contracts entered into to hedge foreign currency risks of firm commitments forecast transactions, forward rate options, currency and interest rate or highly probable swap that qualifies as cash flow hedges are recorded in accordance with the principles of hedge accounting enunciated in Accounting Standard (AS) 30 - "Financial Instruments: Recognition and Measurement" issued by the Institute of Chartered Accountants of India. The gains or losses on designated hedging instruments that qualify as effective hedges are recorded in the Hedging Reserve account and are recognized in the statement of Profit and Loss in the same period or periods during which the hedge transactions affect Profit and Loss Account.

(J) Export Incentives

Export Incentives are accounted for on the basis of export sales effected during the period on accrual basis.

(K) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on intimae/extremely factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate of the recoverable amount.

(L) Employee Benefits

Contributions are made to Provident Fund and Employees State Insurance as per the provisions of Provident Fund Act and ESI Act respectively and are charged to the Profit and Loss account. The Company has no further obligations beyond its monthly contributions to the respective funds. Provision for gratuity and leave encashment are not made and are recognized as and when incurred Termination benefits are recognized as expenditure as and when incurred.

(M) Borrowing Costs

(I) Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

(ii) Other Borrowing costs are recognized as expense in the period in which they are incurred.

(N) Research & Development Expenses

Revenue expenditure on Research and Development is charged as an expense through the normal heads of account in the year in which the same is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and is depreciated according to the policy followed by the Company.

(0) Leases

Assets taken on lease, under which all the risks and rewards of ownership are effectively retained by the less or, are classified as operating lease. Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight line basis over the lease term.

(P) Material Events occurring after Balance Sheet date are taken into consideration.

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Mar 31, 2013

Notes on Financial Statements for the Year ended 31st March, 2013

NOTE: 1 - SIGNIFICANT ACCOUNTING POLICIE

(A) Basis Accounting

{i} The financial statements are prepared In accordance with Generally Accepted Accounting Principles (Indian GAAP} under the historical cost convention on accrual basis and or principles of going concern. The accounting policies are consistently applied by the Company.

(iii The Financial Statements are prepared to comply in all material aspects with the accounting standards notified by the Companies (Accounting Standards) Rules. 2006 and the relive provisions of the Companies Act, 1956.

(iii) Alt assets and Liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI (Revised) to the Companies Act. 1956 Based on the nature of products and the time between. (he acquisition of assets for processing and their realization in cash and cash equivalents. the Company leas ascertained its operating cycle as 12 months for the purpose of current man Classification of assets and liabilities.

(iv) The preparation of the Financial Statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the Financial Statement* and the reported amounts of revenues and expenses during 15 porting period. Differences between ^;be actual rest Rs arid estimates are recognizes in the period in which the results are know-/materialize.

(B) Fixed Assets & Depreciation

(i) Fined Assess are stalled at less accumulated depreciation

(ii) Depreciation on all fixed assets except Land is provided on written down value method on private oasis as per the rates prescribed under Schedule XIV of the Companies Act. 1956.

(iii) The amount shown under (he head "Capital Work in progress'' has been appropriated towards respective fixed assets their completion, -

{iv} Cost of the fixed assets not ready for their intended use at the Balance Street date excel her with and reefed expenses is shown as Capita) Work in Progress/I Assets under development,

(C) Revenue Recognition

(i) Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(ii) Revenue from sate of goods is recognized when the substantial rewards of ownership are transferred to the buyer under the terms of the contract. Sales are of excise out and delivery charges, if any and net of Trade Discounts. But incentive schemes, cash discounts and rebates arc separately booked a& expenditure. However, excise duty relating to sales is reduced turnover for disclosing net turnover.

Notes on Financial Statements for the Year ended 31st March, 2013 Note: 1 * Significant Accounting Policies (Contd.)

(iii) Sate power to Tamil Nadu Electricity Board (TNEB) is accounted for based on the meter reading as per the metering equipments of T NEB installed at ;the Power Grid

(iv) Interest income is recognized on a lime proportion basis taking into account (he amount outstanding and the rile applicable.

(v) Other income is accounted for on accrual basis as and when the right the receives.

(O) Inventories

(i) Raw Materials and finished goods are valued at Cost or Ne( Realizable value, whichever is lower.

(ii) Cos( of inventories compasses material cost on basis, labor and manufacturing overheads incurred in bringing the inventories to their present location and condition.

(iii) Inter-divisional transfers are valued, either at works/factory costs of the transferor unfair/division. plus other charges.

{E} Investments

Non-Current Investments are stated at cost. The diminution, if any, in the value ot investment is recognized when such diminution is considered other than temporary.

(F) Earning Per Share

(& Basic earning per share is calculated by dividing the net profit or loss for the period attributable lo equity shareholders by the weighted average number of equity shares outstanding during ''-e period

(ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the period to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the attics of a( cimices potential equity shares.

(G) Provisions, Contingent Liabilities and Contingent Assets

(f) Provision involving substantial degree of estimation in measurements is 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

(ii) Contingent liabilities are shown by way of notes to the Accounts in respect of obligations where, leased on the evidence available (heir existence at the Balance Sheet date is considered not probable.

(iii) A Contingent Asset is not recognized in the Accounts

(H) Taxation

(i) Current Tax: Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal ;ax during the specified period

Notes on Financial Statements for the Year ended 31st March, 2013 Note: 1 - Significant Accounting Policies {Contd.)

(ii) Deferred Tax'' The deferred tax asset and deferred tax liberty It calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Sa a ice Sheet dale, deferred (ax assets arising mainly on account of brought forward tosses and unabsorbed depreciation under tax laws, are recognized only if I here is a virtual certainly of their realization, by convincing advance. Deferred tax assets on account of other timing differences are , only to the extent ;here is a certainty of its realization. A( each Balance Sheet date, the carrying amount d deferred tax assets is rev weed to obtain reassurance as to realization

(I) Foreign Currency Transactions

(i) initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and Pie foreign currency as at the date of the transaction.

(ii) Conversion : Foreign currency monetary items are reported using the closing rate tan-monetary items which are carted in terns of historical cost denominated in foreign currency are reports: using the exchange rate at the date of the transaction.

(iii) Exchange Differences . Exchange differences arising on the settlement of items recognized as ''income or as expense in the year in arise.

(iv) Forward Exchange Contracts : The Company enters into “orvyaro Exchange Contacts which are not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the of the contract. Exchange differences on such contracts are recognized in the Statement of '' the year in which (he exchange rates change. Any profit or loss arising on cancellation or renewal of fore the exchange contract is recognized as income or expense for the year.

(v) Derivative Financial Instruments and Hedging The Company enters Into derivative financ.al instruments to hedge foreign currency risk of firm commitments an;: highly probable forecast transactions and interest rate risk. The method of recognizing the resultant gain or loss depends on whether the derivative is designated as Hedging instrument, and if so, the nature of the itenrceng hedged The carrying amount of a derivative designated as a hedge is presented as a current asset nr a Ira piety.

(vi) Cash Flow Hodge Forward exchange contracts entered in the to hedge foreign currency risks of firm commitments or high y pupate forecast transactions, forward ray currency and interest rate swap that quaintest as cash flow hedges are recorded in accordance with the principles of hedge accounting -.

Enunciated in Accounting Standard (AS) 30 - "Financial Instrument: Recognition and Measurement" issued by the Institute of Chartered Accountants of India. The gains or losses on designated hedging instruments that qualify ‘as effective hedges are recorded in the Hedging Reserve account and are recognized in (he statement of Profit and Loss in the same pesos or periods during which the hedge transactions affect Profit and Loss Account

Notes on Financial Statements for the Year ended 31st March, 2013 Note: 1 Significant Accounting Policies Coned)

(J) Export Incentives

Expand incentives are accounted fa''¹ on the basis of export sales ejected dung the period on accrual basis.

(K) Impairment of As sets

The carrying amounts of assets are reviewed at each Balance Sheet (fete, If the® .s any incrassation of impairment based on internal/external factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which five asset is identified is impaired- An impairment loss recognized in prior accounting periods is reversed if there has been a favorable change in (he estimate of the recoverable amount.

(L) Employee Benefits

Contributions are made to Provident Fund and Employees State insurance as per the provisions of Provider# Fund Ac! and £31 Act respectively and are charged to the profit and Loss account. The Company has further obligations buyer. d ,is monthly contributions to the respective funds, Provision gratuity and leave encashment are not made and are recognized as and when incurred, Termination benefits ire recognized as expenditure as and when incurred.

(M} Borrowing Costs

(i) Sorrowing costs that are directly attributable to the . conduction or of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes at period of time to get ready for its intended use.

(ii) Other Borrowing costs are recognized as expense in the period in which they are inquired

(N) Research & Development Expenses

Revenue expenditure on Research and Development is charged as an expense through the normal heads of account in the year in which the same is incurred, Capital expenditure inspired on equipment and facilities that are acquired for research and death filament activities is capitalized and is depreciated accordion to the policy followed by the Company,

(0) Leases

Assets taken on lease, under which of the risks and rowan’s of ownership are effectively retained by the lesser, are classified as operating (ease. Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight tine basis over (he (ease term.

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Mar 31, 2012

(A) Basis of Accounting

(i) The financial statement are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP ) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

ii) The financial Statements are prepared to comply m all material aspects with the accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act. 1956

(iii) All assets and liabilities have been classified as current or non-current as per the

Company’s normal operating cycle and other criteria set out in the Schedule VI (Revised) to the Compares Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents the Company has ascertained its operating cycle as 12 months for the purpose of current/ non-current classification of assets and I liabilities.

(iv) The preparation of the Financial Statements requires estimates and assumptions to be made that affect the reported amounts of a and liabilities on the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period Differences between the actual results and estimates are recognized in the period m which the results are known/materialize.

(B) Fixed Assets & Depreciation

(i) Fixed Assets are stated at cost less accumulated depreciation.

(ii) Deprecation on all fixed assets except Land is provided on written down value method on pro-rata basis as per the rates prescribed under Schedule XIV of the Companies Act. 1956.

(iii) The amount shown under the head "Capital Work in progress” has been appropriated towards respective fixed assets on their completion.

(iv) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses is shown as Capital Work in Progress/Intangible Assets under development.

(C) Revenue Recognition

(i) Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(i) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

(iii) Sales of power to Tamil Nadu Electricity Board (TN-B) is accounted for based on the meter reading as per metering equipments of TNEB installed at the Power Grid.

(iv) Other income is accounted for on accrual basis as and when the right to receive a arises.

(D) Valuation of Inventories

(i) Inventories of Raw Materials are valued at weighted average cost on FIFO basis or net realizable value whichever is lower.

(ii) Inventories of Finished Goods are valued at the lower of cost or estimated realizable value.

(E) Investments

Non - Current Investments are stated at cost. The diminution, if any, in the value of investment, is recognized when such diminution is considered other than temporary.

(F) Faming Per Share

(i) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(G) Provisions, Contingent Liabilities and Contingent Assets

(i) Provision involving substantial degree of estimation in measurements is 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

(ii) Contingent Liabilities are shown by way ofnotes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(iii) A Contingent Asset is not recognized in the Accounts.

(H) Change in Accounting Policy

During the year elided 31^st March 2013, the revved schedule VI notified under the Companies

Act 1956, has become applicable to the company, for the preparation and presentation of

Its financial statements, The adoption of Revised Schedule VI does not impact recognition and measurement principles followed tax preparation of financial statement. However, it has significant impact on presentation and disclosure made is the financial statements. The company_; has also reclassified the previous year figures in accordance with the requirements, applicable in The current year,

(l) Taxation

(i) Current Tax: Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal tax during the specified period.

(ii) Deferred Tax: The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date, Deferred tax assets arising mainly on account of brought forward losses and tin absorbed depreciation under tax laws, are recognized only if there is a virtual certainty of their realization supported by convincing evidence.

Deferred tax assets on account of other timing differences are recognized, only to the extent there is a reasonable certainty of its realization, At each Balance Sheet datethe carrying amount of deferred tax assets is reviewed to obtain reassurance as to realization.

j) Foreign Currency transactions

(i) initial Recognition- Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency as at the date of the transaction,

(ii) Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in series of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction

(iii) Exchange Differences: Exchange differences arising on the settlement of monetary items are recognized as income or as expense in the year in which they arise.

(iv) Forward Exchange Contracts: The Company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes .The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contact. Exchange differences on such contracts are recognized in the Statement of Profit & Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of foreign exchange contract is recognized as income or expense for the year.

(K) Sales

Sales are recorded net of value added tax, sales tax, sales return etc. But incentive schemes. Trade discounts and rebates are separately booked as expenditure

(L) Export Incentives

Export Incentives are accounted for on the basis of export sales effected during the period on accrual basis.

(M) Impairment of Assets

The Company identifies impair able assets based on cash generating unit concept at the yearend for the purpose of arriving at impairment loss thereon, if any, being the difference better the book value end recoverable value of the relevant asset. Impairment loss when crystallizes is charged against revenue of the year

(N) Preliminary Expenses

Preliminary Expenses are treated as deferred expenditure and written off over a period of 5 (five) years.

(O) Employee Benefits

Contributions are made to Provident Fund and Employees State Insurance as per the provisions Provident Fun Act and ESI Act respectively and are charged to the Profit and Loss account. The Company has no further obligations beyond its monthly contributions to the respective funds Provision for gratuity and leave encashment are not made and are recognized as and when incurred. Termination benefits are recognized as expenditure as and when incurred.

(P) Borrowing Costs

(i ) Borrowing costs that are directly attributable to the acquisition construction or production of qualifying assets are capitalized For the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time of get ready for its intended use.

(ii) Other Borrowing costs are recognized as expense in the period in which they are incurred.

(Q) Research & Development Expenses

Revenue expenditure on Research and Development is charged as an expense through the normal heads of account in the year in which the same is incurred, Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and is depreciated according to the policy followed by the Company.

(R) Leases

Assets taken on lease, under which all the risk and rewards of ownership are effectively retained by the lessor, are classified as operating lease operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight line basis over the lease term,