Shiva Mills Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

1.5 Provisions and contingencies

Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best
estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.

A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot
be measured reliably. The company does not recognise a contingent liability but discloses its existence in the Notes.

1.6 Financial instrument

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.

Equity investments (other than investments in subsidiaries and joint ventures):

All equity investments within the scope of Ind AS 109, ''Financial Instruments'', are measured at fair value either through
Statement of Profit and Loss or other comprehensive income. The Company makes an irrevocable election to present in OCI the
subsequent changes in the fair value on an instrument-by-instrument basis. The classification is made on initial recognition.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding
dividends, impairment gains or losses and foreign exchange gains and losses, are recognised in the OCI. Any gains or losses
on de-recognition is recognised in the OCI and are not recycled to the Statement of Profit or Loss. Equity instruments
included within the FVTPL category are measured at fair value with all changes recognised in the Statement of profit and Loss.

(ii) Terms / rights attached to the Equity Shares:

The Company has issued only one class of equity share having a face value of Rs. 10/- per share. The holder of each equity share is
entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution to all preferential creditors and other creditors, in the order of priority. The
distribution will be in proportion to the number of equity shares held by shareholders. The company declares and pays dividend in
Indian Rupees. Board of Directors have not recommended dividend for the year.

(a) Working Capital loan carry interest ranging from 9.35% to 9.50 %

(b) In respect of borrowings made during the year, the charge on the assets given as security to the lenders have been created on
time in compliance of the regulatory requirements

(c) There are no material deviations between quarterly stock returns submitted to the bank and the unaudited books of accounts for
the respective quarters. Reconciliations have been provided wherever discrepancies were identified.

Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of information
available with the Management.

The Company has disclosed the suppliers who have registered themselves under "Micro, Small and Medium Enterprises Development
Act, 2006" to the extent they have confirmed.

34. b. Defined benefit plan - gratuity

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity plan).
The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an
amount based on the respective employee’s last drawn eligible salary and the years of employment with the Company. The
Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer included as part of
''Contribution to provident and other funds’ in Note 28 Employee benefit expense. Under this plan, the settlement obligation
remains with the Company.

Description of Risk Exposures Valuations are performed on certain basic set of pre-determined assumptions and other
regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity
benefit which are as follows:

i. Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an
increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as
shown in financial statements).

ii. Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.

iii. Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase
rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of
increase in salary used to determine the present value of obligation will have a bearing on the plan’s liabilty.

iv. Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The
Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

v. Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to
non-availabilty of enough cash/cashequivalent to meet the liabilities or holding of illiquid assets not being sold in time.

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined
benefit obligation were carried out as at March 31,2025 by actuary. The present value of the defined benefit obligation, and
the related current service cost and past service cost, were measured using the projected unit credit method.

Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is
declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment
of all gratuity liability occurring during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity
risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the
Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in
liability without corresponding increase in the asset).

The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables, and other current financial assets
and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.The fair value of the financial
assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

i) Long-term fixed-rate receivables/borrowings are evaluated by the Company based on parameters such as interest rates, specific country
risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation,
allowances are taken into account for the expected losses of these receivables

ii) Fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects
the issuer’s borrowing rate as at the end of the reporting period. The own non- performance risk as at March 31, 2025 was assessed to be
insignificant.

40. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) 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 (i.e. as
prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on
recurring basis as at March 31,2025, March 31,2024

Valuation technique used to determine fair value

The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability
in an orderly transaction between market participants at the measurement date.The carrying amounts of trade receivables, cash and
cash equivalents, other bank balances, loans, other financial assets, current borrowings and other current financial liabilities are a
reasonable approximation of their fair values.The estimated fair value amounts as at March 31,2025 have been measured as at that
date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at
each year-end.The investments in Level-3 hierarchy has been valued at cost approach to arrive at the fair value as there is vide range of
possible fair value measurement and the cost represents the estimate of fair value within that range considering the purpose and
restriction on the transferability of the instruments.There were no transfers between Level 1, Level 2 and Level 3 during the year.

41 Financial risk management

The Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these
financial liabilities is to finance the company’s operations and to provide guarantees to support its operations. The Company’s
principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its
operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit
risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts
receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing
counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties,
taking into account their financial position, past experience and other factors.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of
the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit
risk assessment.

The following table gives details in respect of percentage of revenues generated from top customer and top 10 customers:

One customer accounted for more than 9% of the revenue for the year ended March 31,2025 , One customer accounted for more
than 10% of the receivables for the year ended March 31,2025. One customer accounted for more than 10% of the revenue for the
year ended March 31,2024

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a
good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have
any significant concentration of exposures to specific industry sectors.

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
debt obligations with floating interest rates and investments.

Interest rate sensitivity analysis

If interest rates had been 1% higher and all other variables were held constant, the company''s profit for the year ended would have
impacted in the following manner:

Capital management

The Company''s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its
shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short
term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic
investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or
convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost
and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion
projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing
loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current
investments.

42. CSR Expenditure:

The Company has incurred loss for immediately preceding financial year and hence no mandatory obligation to spend on CSR
during the financial year 2024-25

43. Power and Fuel is net of Wind Power of Rs.1165.09 Lakhs ( Previous year 1108.46 Lakhs) representing units supplied to grid against
which equivalent captively consumed

46 The Code on Social Security 2020 has been notified in the Official Gazette on 29th September 2020. The effective date from which
the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and
accounted in the period in which the said code becomes effective and the rules framed thereunder are published

47 There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax
assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

48 There are no proceedings initiated or pending against the company for holding any Benami Property under the Benami
Transactions (Prohibition) Act, 1988 and the rules made there under.

49 Company has not entered into any transactions with companies struck off under Companies Act, 2013

50 The Company has not been declared as a wilful defaulter by any bank or financial institution.

51 (i) The company has not advanced or loaned or invested any fund, which are material either individually or in aggregate (either

from borrowed funds or share premium or any other sources or kind of funds) to or in any other person or entity, including
foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate
Beneficiaries”) by or on behalf of the Company

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The company has not received any fund, which are material either individually or in aggregate, from any person or entity,
including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the
Company shall:

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate
Beneficiaries”) by or on behalf of the Funding Party

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

52 All the figures are in lakhs unless otherwise stated. Previous year’s figures have been regrouped / reclassified wherever necessary
to correspond with the current year’s classification / disclosure

Material accounting policies and the accompanying 1 _ 52

notes are an integral part of the financial statements
In terms of our report attached

For VKS AIYER & Co For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration No.000066S

S V ALAGAPPAN A LALITHA

Chairman & Managing Director Joint Managing Director

CS SATHYANARAYANAN DIN: 00002450 DIN: 00003688

Partner

Membership No. 028328

. R SELVARAJ M SHYAMALA

^{Place: Coimbatore} Chief Financial Officer Company Secretary

Date : 22ⁿ May, 2025 ACS No. 24464

---

Mar 31, 2024

1.5 Provisions and contingencies

Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The company does not recognise a contingent liability but discloses its existence in the Notes.

36. b. Defined benefit plan - gratuity

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity plan). The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn eligible salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer included as part of ''Contribution to provident and other funds’ in Note 30 Employee benefit expense. Under this plan, the settlement obligation remains with the Company.

Description of Risk Exposures Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

i. Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

ii. Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

iii. Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liabilty.

iv. Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

v. Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non-availabilty of enough cash/cashequivalent to meet the liabilities or holding of illiquid assets not being sold in time.

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31,2024 by actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity liability occurring during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

i) Long-term fixed-rate receivables/borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected losses of these receivables

ii) Fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non- performance risk as at March 31,2024 was assessed to be insignificant.

42. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) 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 (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31,2024, March 31,2023

The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date.The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings and other current financial liabilities are a reasonable approximation of their fair values.The estimated fair value amounts as at March 31,2024 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.The investments in Level-3 hierarchy has been valued at cost approach to arrive at the fair value as there is vide range of possible fair value measurement and the cost represents the estimate of fair value within that range considering the purpose and restriction on the transferability of the instruments.There were no transfers between Level 1, Level 2 and Level 3 during the year.

43 Financial risk management

The Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The Company uses foreign currency borowings to mitigate foreign exchange related risk exposures.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

47 The Code on Social Security 2020 has been notified in the Official Gazette on 29th September 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period in which the said code becomes effective and the rules framed thereunder are published

48 There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

49 There are no proceedings initiated or pending against the company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 and the rules made there under.

50 Company has not entered into any transactions with companies struck off under Companies Act, 2013

51 The Company has not been declared as a wilful defaulter by any bank or financial institution.

52 (i) The company has not advanced or loaned or invested any fund, which are material either individually or in aggregate (either

from borrowed funds or share premium or any other sources or kind of funds) to or in any other person or entity, including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries”) by or on behalf of the Company

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The company has not received any fund, which are material either individually or in aggregate, from any person or entity, including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall:

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries”) by or on behalf of the Funding Party

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

53 All the figures are in lakhs unless otherwise stated. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure

Material Accounting Policies and the accompanying 1 _ 53

notes are an integral part of the financial statements In terms of our report attached

For VKS AIYER & Co For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration No.000066S

S V ALAGAPPAN A LALITHA

Chairman & Managing Director Joint Managing Director

KAUSHIK SIDARTHA DIN: 00002450 DIN: 00003688

Partner

Membership No. 217964

. M SHANMUGAM M SHYAMALA

^{Place: Coimbatore} Chief Financial Officer Company Secretary

Date : 24^th May, 2024 ACS No. 24464

---

Mar 31, 2018

1. Corporate Information

Shiva Mills Limited ("the Company”) is engaged in the manufacturing of cotton yarn products. The Company has its registered office at Coimbatore and factory in Dindigul.

The Company uses a provision matrix to determine impairment loss on portfolio of its trade receivable. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward- looking estimates. At every reporting date, the historical observed default rates are updated and changes in forward-looking estimates are analysed. Based on such estimates the above provision has been made.

(ii) Terms / rights attached to the Equity Shares:

The Company has issued only one class of equity share having a face value of Rs. 10/- per share. The holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preferential creditors and other creditors, in the order of priority. The distribution will be in proportion to the number of equity shares held by shareholders. The company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to the approval of Shareholders in the ensuing Annual General Meeting.

2. Employee benefit plans

2.1.a Defined contribution plans - provident fund and employee state insurance

The Company makes Provident Fund and Employee state insurance scheme contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised the following contributions in the Statement of profit and loss.

2.1.b Defined benefit plan - gratuity

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity plan). The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn eligible salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Insurer included as part of ''Contribution to provident and other funds’ in Note 20 Employee benefit expense. Under this plan, the settlement obligation remains with the Company.

Description of Risk Exposures Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

A Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

B Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

C Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

D Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

E Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non-availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

F In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2018 by Mr. N Srinivasan, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity liability occurring during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

3. Segment Reporting

(a) Primary Business Segment Information

The company''s business relates to single segment only i.e, Textiles. Accordingly, this is the only reportable business segment.

The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

i) Long-term fixed-rate receivables/borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected losses of these receivables.

ii) Fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non- performance risk as at March 31, 2018 was assessed to be insignificant.

iii) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.

4. Fair value hierarchy

Level 1 - Quoted prices (unadjusted) 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 (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31,2018, March 31,2017 and April 1,2016.

5. Financial risk management

The Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company''s activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The Company uses foreign currency borrowings to mitigate foreign exchange related risk exposures.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

One customer accounted for more than 10% of the revenue for the year ended March 31, 2018 , however two of the customers accounted for more than 10% of the receivables for the year ended March 31, 2018. Three customers accounted for more than 10% of the revenue for the year March 31, 2017, however one of the customers accounted for more than 10% of the receivables for the year ended March 31, 2017.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk through credit limits with banks.

The Company’s corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.

The Company’s exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. dollars, British pound sterling and euros) and foreign currency borrowings (primarily in U.S. dollars, British pound sterling and euros). A significant portion of the Company’s revenues are in these foreign currencies, while a significant portion of its costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company’s revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Company''s management meets on a periodic basis to formulate the strategy for foreign currency risk management.

Consequently, the Company management believes that the borrowings in foreign currency and its assets in foreign currency shall mitigate the foreign currency risk mutually to some extent

Foreign currency sensitivity analysis

The Company is mainly exposed to the currency USD on account of outstanding trade receivables and trade payables in USD.

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the USD. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be ^negative.

For a 5% weakening of the INR against the relevant currency, there would be equivalent amount of impact on the profit as mentioned in the above table.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates and investments.

Interest rate sensitivity analysis

If interest rates had been 1% higher and all other variables were held constant, the company''s profit for the year ended would have impacted in the following manner:

6 Capital Management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

7. Transition to Ind AS

The Company''s financial statements for the year ended March 31, 2018 are prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the interim Ind AS financial statements for the year ended March 31, 2017 be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Indian GAAP as at the transition date have been recognized directly in equity at the transition date.

In preparing these financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101 as explained below:

(a) Exceptions from full retrospective application:

Estimates exception: Upon an assessment of the estimates made under Indian GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by Indian GAAP.

(b) Exemptions from retrospective application:

The Company has not elected to restate the carrying value of the property, plant and equipment and capital work in progress in accordance with Ind AS as of April 01, 2016 (transition date) as its deemed cost as of the transition date.

(c) Reconciliations:

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Indian GAAP to I nd AS in accordance with Ind AS 101:

-equity as at April 1, 2016;

-equity as at March 31, 2017;

-total comprehensive income for the year ended March 31, 2017;

- explanation of material adjustments to cash flow statements.

(iii) There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

Explanation notes for Ind AS transition:

Under the previous GAAP, actuarial gains or losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains or losses from part of remeasurement of the net defined benefit liability / asset is recognised in other comprehensive income. Change in the defined benefit obligation on account of Ind AS is recognised in the statement of profit and loss.

Under Ind AS the adjustment for business combination (Demerger) is recognised with effect from the appointed date as per the scheme of demerger governed by the court of law i.e April1, 2015. Under previous GAAP demerger effect was given during the year ended March 31, 2017. Therefore adjustment of the net profit earned by the resulting Company during the year ended March 31, 2017 in the financials as per the previous GAAP is not required.

8. Scheme of demerger

The National Company Law Tribunal (NCLT) vide their proceedings dated 23^rd August 2017 in Company Petition No.3598360 of 2016, renumbered as TCP/22&23/CAA/2017, approved the scheme for demerger of the business of Spinning Unit - 1 along with connected wind mills ("approved scheme", in favour of Shiva Mills Limited (formerly known as STYL Textile Ventures Limited) ("SML"). The demerger comes in to effect from April 1, 2015, the appointed day fixed under the Scheme.

The net assets to be transferred to SML as on the appointed day, as per the approved scheme is recognised and disclosed as "Demerger Adjustment Account" to be adjusted against the equity of the Company when shares are allotted by SML to the share holders of Demerged Company.

During the year shares of SML were alloted on accordance with the scheme. Accordingly the demerger adjustment account is adjusted with the equity.

9. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

The notes and additional notes which form part of financial statements.