Soma Textiles & Industries Ltd. कंपली की लेखा नीति

Mar 31, 2025

2 MATERIAL ACCOUNTING POLICIES

2.01 Statement of Compliance:

These financial statements of the Company comprising of Balance Sheet, Statement of Profit and Loss, Statement
of changes in Equity and Cash Flow Statement together with the notes have been prepared in accordance with
Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS")
as amended by the Companies (Indian Accounting Standards) Rules, 2016, the Companies (Indian Accounting
Standards) Rules, 2017 and other relevant provisions of the Companies Act, 2013.

2.02 Basis of Preparation and Presentation:

The Financial Statements have been prepared on the historical cost basis except for certain financial instruments
measured at fair value at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes
in to account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure
purposes in these financial statements is determined on such a basis, except for leasing transactions that are within
the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net
realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on
the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the
fair value measurements in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;

Level 2 inputs are 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 are unobservable inputs for the asset or liability.

The financial statements are presented in Indian Rupees (?) which is the Company''s functional and presentation
currency.

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rupees in lakhs (upto
two decimals), except share data and as otherwise stated as per the requirement of Schedule III of the Companies Act,
2013.

The financial statements were approved by the Board of Directors on 30th May, 2025.

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 “Presentation of financial statements”.
Based on the nature of products and the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of
current-non current classification of assets and liabilities.

2.03 Revenue Recognition:

Revenue from the sale of the Company is recongnised when delivery has taken place and control of the goods has
been transferred to the customer, and when there are no longer any unfulfilled obligations.

a) The customer obtains control of the goods when the significant risks and reward of products sold are transferred
according to the specific delivery term that have been agreed with the customer.

b) Revenue is measured at fair value of the consideration received or receivable, after deduction of any discounts,
price concessions, volume rebates and any taxes or duties collected on behalf of the government such as
goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts, price
concessions and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal
will not occur.

2.04 Goods and Service Tax:

All items in the financial statements are presented exclusive of Goods and Services Tax (GST) except for receivables
and payables, which are presented on a GST-inclusive basis. Where GST is not recoverable as input tax, it is
recognized as part of the related asset or expense. The net amount of GST recoverable from the Department is
included as part of receivables in the Financial Statement.

2.05 Other Income:

a) I nterest income is recognised on the time proportion basis, by reference to the principal outstanding and the
effective interest rate applicable.

b) Insurance and other claims are accounted as and when unconditionally admitted by the appropriate authorities.

c) Gains or Losses arising on retirement or disposal of property, plant and equipment are recognised in the
Statement of Profit and Loss in the year of such retirement or disposal.

2.06 Property, Plant and Equipment:

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Subsequent costs are included in the asset''s carrying amount or recognised as asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of
Profit and Loss during the period in which they are incurred.

Gains or Losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of
Profit and Loss.

Capital work-in-progress / intangible assets under development are carried at cost, comprising direct cost, related
incidental expenses and attributable borrowing cost.

The management''s estimate of useful lives are in accordance with Schedule II to the Companies Act, 2013. Depreciation
is provided on pro-rata basis on the straight line method over the useful life of assets. The useful life, residual value
and the depreciation method are reviewed atleast at each financial year end and adjusted prospectively.

Spares in the nature of capital spares/ insurance spares are added to the cost of the assets. The total cost of such
spares is depreciated over a period not exceeding the useful life of the asset to which they relate.

Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the
respective Fixed Assets and is represented at their Net off values.

2.07 Intangible Assets:

Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses,
if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. The amortisation period
and amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is
significantly different from previous estimates, the amortisation period is changed accordingly.

2.08 Impairment of assets:

Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there
is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable
amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases,
the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount
of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit
and Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
(or cash-generating unit) earlier.

2.09 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at
Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than
temporary in nature.

2.10 Financial instruments:

1. Initial recognition and measurement

Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract
embodying the related financial instruments. All financial assets, financial liabilities are initially measured at fair
value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from as the case may be, the fair value of such assets or liabilities, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss
are recognised immediately in profit or loss.

2. Financial assets:

Classification and subsequent measurement of financial assets:

a) Classification of financial assets:

(i) The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income,
or through profit or loss), and

- those measured at amortised cost.

(ii) The classification is done depending upon the Company''s business model for managing the financial
assets and the contractual terms of the cash flows.

b) Subsequent Measurement
(i) Equity instruments:

The Company subsequently measures all equity investments at fair value. There are two measurement
categories into which the Company classifies its equity instruments:

Investments in equity instruments at FVTPL:

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects
on initial recognition to present subsequent changes in fair value in other comprehensive income for
equity instruments which are not held for trading.

Investments in equity instruments at FVTOCI:

On initial recognition, the Company can make an irrevocable election (on an instrument-by¬
instrument basis) to present the subsequent changes in fair value in other comprehensive income.
This election is not permitted if the equity investment is held for trading. These elected investments
are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair
value with gains and losses arising from changes in fair value recognised in other comprehensive
income and accumulated in the reserve for ''equity instruments through other comprehensive income''.
The cumulative gain or loss is not reclassified to Statement of Profit and Loss on disposal of the
investments.

c) Impairment of financial assets:

The Company applies the expected credit loss model for recognising impairment loss on financial assets
measured at amortised cost, lease receivables, trade receivables, other contractual rights to receive cash
or other financial asset. For trade receivables, the Company measures the loss allowance at an amount

equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss
allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS
109. This expected credit loss allowance is computed based on a provision matrix which takes into account
historical credit loss experience and adjusted for forward-looking information.

d) Derecognition of financial assets

A financial asset is primarily derecognised when:

1. the right to receive cash flows from the asset has expired, or

2. the Company has transferred its rights to receive cash flows from the asset; and

(a) the Company has transferred substantially all the risks and rewards of the asset, or

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

On derecognition of a financial asset in its entirety (other than investments in equity instruments at
FVOCI), the differences between the carrying amounts measured at the date of derecognition and
the consideration received is recognised in the Statement of Profit and Loss.

3. Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability and an
equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue
costs.

Repurchase of the Company''s own equity instrument is recognised and deducted directly in equity. No gain
or loss is recognised in the Statement of Profit and Loss on the purchase, sale, issue or cancellation of the
Company''s own equity instruments.

Financial Liabilities

Classification and subsequent measurement

The Company''s financial liabilities include trade and other payables, loans and borrowings and derivative
financial instruments. Subsequent measurement of financial liabilities depends on their classification as fair
value through Profit and loss or at amortized cost. All changes in fair value of financial liabilities classified as
FVTPL are recognized in the Statement of Profit and Loss. Amortised cost category is applicable to loans
and borrowings, trade and other payables. After initial recognition the financial liabilities are measured at
amortised cost using the Effective Interest Rate method.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. Gains and losses are recognized in profit and loss when the liabilities are derecognized.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when
there is a currently enforceable legal right to offset the recognised amounts and there is an intention either
to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

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 recognised in the Statement of profit and Loss immediately.

2.11 Inventories:

Inventories are stated at the lower of cost and net realisable value.

Cost of inventories comprise all costs of purchasWe (net of input credits), costs of conversion and other costs incurred
in bringing the inventories to their present location and condition.

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

Cost of raw materials and components, packing materials, stores, spare parts other than specific spares for machinery
and finished goods are determined on the basis of ''First-in-First-out'' (FIFO) or ''Weighted Average Cost'', as applicable.
Cost of Materials in transit are determined at cost-to-date.

2.12 Foreign currencies:

Items included in the financial statements of the Company are recorded using the currency of the primary economic
environment (INR) in which the Company operates (the ‘functional currency'')

Foreign currency transactions are translated into the functional currency using exchange rates at the date of the
transaction. Foreign exchange gains and losses from settlement of these transactions, and from translation of
monetary assets and liabilities at the reporting date exchange rates are recognised in the Statement of Profit and Loss.

2.13 Employee Benefits:

Retirement benefit costs and termination benefits:

Defined Contribution Plans

Payment to defined contriWWbution retirement benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions.

Contributions to Provident and Family Pension Fund and Superannuation scheme, which are defined contribution
plans, are made as required by the statute and expensed in the Statement of profit and loss.

Defined Benefit Plans

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit
credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement
comprising actuarial gains and losses and the effect of the changes to the return of plan assets (excluding net interest),
is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the
period in which they occur. Remeasurement recognised in the other comprehensive income is reflected immediately in
retained earnings and is not reclassified to Statement of Profit and Loss. Past service cost is recognised in Statement
of Profit and Loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the
beginning of the period to the defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);

• net interest expense or income; and

• remeasurement.

The Company presents the first two components of defined benefit costs in the Statement of Profit and Loss in the line
item “Employee benefits expense”. Curtailment gains and losses are accounted for as past service cost.

Short-term and other long-term employee benefits:

Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and
Loss of the year in which the related service is rendered.

2.14 Borrowing Costs:

(a) Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are
capitalised as a part of the cost of such asset till such time the asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily requires a substantial period of time (generally over twelve months)
to get ready for its intended use or sale.

(b) All other borrowing costs are recognised as expense in the period in which they are incurred.

2.15 Taxation:

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be
paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing
differences between accounting income and taxable income originating and reversing during the year. Deferred tax is
measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax
assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.

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Mar 31, 2024

1 GENERAL INFORMATION

The company was originally established R.B. Rodda & Co. Ltd. in the year 1940 under the Indian Companies Act, VII of 1913 and the name of the company was changed to Soma Textiles & Industries Ltd. on 21^st January, 1992. The Company is currently engaged in Trading of Cotton. The address of its registered office is 2, Red Cross Place, Kolkata, West Bengal - 700001.

2 SIGNIFICANT ACCOUNTING POLICIES

2.01 Statement of Compliance:

These financial statements of the Company comprising of Balance Sheet, Statement of Profit and Loss, Statement of changes in Equity and Cash Flow Statement together with the notes have been prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS") as amended by the Companies (Indian Accounting Standards) Rules, 2016, the Companies (Indian Accounting Standards) Rules, 2017 and other relevant provisions of the Companies Act, 2013.

2.02 Basis of Preparation and Presentation:

The Financial Statements have been prepared on the historical cost basis except for certain financial instruments measured at fair value at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are 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 are unobservable inputs for the asset or liability.

The financial statements are presented in Indian Rupees (?) which is the Company''s functional and presentation currency. All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rupees in lakhs (upto two decimals), except share data and as otherwise stated as per the requirement of Schedule III of the Companies Act, 2013. The financial statements were approved by the Board of Directors on 22nd May, 2024.

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 “Presentation of financial statements”. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current-non current classification of assets and liabilities.

2.03 Revenue Recognition:

Revenue from the sale of the Company is recongnised when delivery has taken place and control of the goods has been transferred to the customer, and when there are no longer any unfulfilled obligations.

a) The customer obtains control of the goods when the significant risks and reward of products sold are transferred according to the specific delivery term that have been agreed with the customer.

b) Reve nue is measured at fair value of the consideration received or receivable, after deduction of any discounts, price concessions, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts, price concessions and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

2.04 Goods and Service Tax:

All items in the financial statements are presented exclusive of Goods and Services Tax (GST) except for receivables and payables, which are presented on a GST-inclusive basis. Where GST is not recoverable as input tax, it is recognized as part of the related asset or expense. The net amount of GST recoverable from the Department is included as part of receivables in the Financial Statement.

2.05 Other Income:

a) I nterest income is recognised on the time proportion basis, by reference to the principal outstanding and the effective interest rate applicable.

b) Insurance and other claims are accounted as and when unconditionally admitted by the appropriate authorities.

c) Gains or Losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of Profit and Loss in the year of such retirement or disposal.

2.06 Property, Plant and Equipment:

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the asset''s carrying amount or recognised as asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or Losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of Profit and Loss.

Capital work-in-progress / intangible assets under development are carried at cost, comprising direct cost, related incidental expenses and attributable borrowing cost.

The management''s estimate of useful lives are in accordance with Schedule II to the Companies Act, 2013. Depreciation is provided on pro-rata basis on the straight line method over the useful life of assets. The useful life, residual value and the depreciation method are reviewed atleast at each financial year end and adjusted prospectively.

Spares in the nature of capital spares/ insurance spares are added to the cost of the assets. The total cost of such spares is depreciated over a period not exceeding the useful life of the asset to which they relate.

Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets and is represented at their Net off values.

2.07 Intangible Assets:

Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. The amortisation period and amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly.

2.08 Impairment of assets:

Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not

exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) earlier.

2.09 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

2.10 Financial instruments:

1. Initial recognition and measurement

Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities are initially measured at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

2. Financial assets:

Classification and subsequent measurement of financial assets:

a) Classification of financial assets:

(i) The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

- those measured at amortised cost.

(ii) The classification is done depending upon the Company''s business model for managing the financial assets and the contractual terms of the cash flows.

b) Subsequent Measurement (i) Equity instruments:

The Company subsequently measures all equity investments at fair value. There are two measurement categories into which the Company classifies its equity instruments:

Investments in equity instruments at FVTPL:

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for equity instruments which are not held for trading.

Investments in equity instruments at FVTOCI:

On initial recognition, the Company can make an irrevocable election (on an instrument-byinstrument basis) to present the subsequent changes in fair value in other comprehensive income. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the reserve for ''equity instruments through other comprehensive income''. The cumulative gain or loss is not reclassified to Statement of Profit and Loss on disposal of the investments.

c) Impairment of financial assets:

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, lease receivables, trade receivables, other contractual rights to receive cash or other financial asset. For trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

d) Derecognition of financial assets

A financial asset is primarily derecognised when:

1. the right to receive cash flows from the asset has expired, or

2. the Company has transferred its rights to receive cash flows from the asset; and

(a) the Company has transferred substantially all the risks and rewards of the asset, or

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

On derecognition of a financial asset in its entirety (other than investments in equity instruments at FVOCI), the differences between the carrying amounts measured at the date of derecognition and the consideration received is recognised in the Statement of Profit and Loss.

3. Financial liabilities and equity instruments

Classification as debt or equity Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instrument is recognised and deducted directly in equity. No gain or loss is recognised in the Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

Financial Liabilities

Classification and subsequent measurement

The Company''s financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments. Subsequent measurement of financial liabilities depends on their classification as fair value through Profit and loss or at amortized cost. All changes in fair value of financial liabilities classified as FVTPL are recognized in the Statement of Profit and Loss. Amortised cost category is applicable to loans and borrowings, trade and other payables. After initial recognition the financial liabilities are measured at amortised cost using the Effective Interest Rate method.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Gains and losses are recognized in profit and loss when the liabilities are derecognized.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when there is a currently enforceable legal right to offset the recognised amounts and there is an intention either to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

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 recognised in the Statement of profit and Loss immediately.

2.11 Inventories:

Inventories are stated at the lower of cost and net realisable value.

Cost of inventories comprise all costs of purchase (net of input credits), costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

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

Cost of raw materials and components, packing materials, stores, spare parts other than specific spares for machinery and finished goods are determined on the basis of ''First-in-First-out'' (FIFO) or ''Weighted Average Cost'', as applicable. Cost of Materials in transit are determined at cost-to-date.

2.12 Foreign currencies:

Items included in the financial statements of the Company are recorded using the currency of the primary economic environment (INR) in which the Company operates (the ‘functional currency'')

Foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction. Foreign exchange gains and losses from settlement of these transactions, and from translation of monetary assets and liabilities at the reporting date exchange rates are recognised in the Statement of Profit and Loss.

2.13 Employee Benefits:

Retirement benefit costs and termination benefits:

Defined Contribution Plans

Payment to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

Contributions to Provident and Family Pension Fund and Superannuation scheme, which are defined contribution plans, are made as required by the statute and expensed in the Statement of profit and loss.

Defined Benefit Plans

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement comprising actuarial gains and losses and the effect of the changes to the return of plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in the other comprehensive income is reflected immediately in retained earnings and is not reclassified to Statement of Profit and Loss. Past service cost is recognised in Statement of Profit and Loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• net interest expense or income; and

• remeasurement.

The Company presents the first two components of defined benefit costs in the Statement of Profit and Loss in the line item “Employee benefits expense”. Curtailment gains and losses are accounted for as past service cost.

Short-term and other long-term employee benefits:

Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

2.14 Borrowing Costs:

(a) Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are capitalised as a part of the cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time (generally over twelve months) to get ready for its intended use or sale.

(b) All other borrowing costs are recognised as expense in the period in which they are incurred.

2.15 Taxation:

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

2.16 Provisions, Contingent Liabilities and Contingent Assets:

Provisions : Provisions are recognised when there is a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured using the cash flows estimated to settle the present obligation at the Balance sheet date. .

Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past events, 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 where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent Assets : Contingent assets are disclosed, where an inflow of economic benefits is probable.

2.17 Cash and cash equivalents:

Cash and Cash equivalents include cash, cheques on hand, cash at bank and short term deposits with banks having original maturity of three months or less, which are subject to insignificant risk of changes in value.

2.18 Non-current Assets held for sale:

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use of the assets and actions required to complete such sale indicate that it is unlikely that significant changes to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such assets are classified as held for sale only if the management expects to complete the sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at their carrying amount as current market valuation is not available. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

2.19 Statement of Cash Flows:

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

2.20 Earnings per Share:

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

2.21 Critical accounting judgements and key sources of estimation uncertainty:

The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes judgments, estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The judgments, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to significant accounting estimates include useful lives and impairment of property, plant and equipment, allowance for doubtful debts/advances, deferred tax assets, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, allowances for inventories, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

(i) Useful lives and Impairment of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This re-assessment may result in change in depreciation expense in future periods.

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset''s recoverable amount. An asset''s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset''s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset.

(ii) Allowance for doubtful debts/advances

When determining the lifetime expected credit losses for trade receivables, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and credit assessment and including forward-looking information.

(iii) Deferred tax assets

Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits. The amount of total deferred tax assets could change if estimates of projected future taxable income or if tax regulations undergo a change.

(iv) Employee Benefit Obligations

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, employee benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(vi) Allowance for Inventories

An inventory provision is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory provision is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / non-moving inventory items.

2.22 Recent Accounting Developments:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31^st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

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Mar 31, 2016

1 Basis of preparation :

The financial statements have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention, on the accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with the Rule 7 of the Companies (Accounts) Rules 2014 and the provisions of the Act (to the extent notified).

The financial statements has been prepared and presented as per requirement of Schedule III as notified under Companies Act, 2013.

2 Revenue recognition :

(a) Sales including export sales and trading sales are recognized when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realization is accounted as “Foreign Exchange Rate Fluctuation” and is dealt in the Statement of Profit and Loss.

(c) Export incentives are accounted in the year of export.

(d) Any fluctuation, on account of a capital asset/ liability are accounted in that relevant accounting head.

3 A) Fixed assets :

(a) During the year ended 31st March, 2016, the company has provided depreciation on fixed assets considering useful lives specified in Schedule II of the Companies Act, 2013 or re-assessed by the Company. Fixed Assets are stated at cost, net of accumulated depreciation and impairment loss, if any. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalized. This year Fixed Assets value has been recalculated to re-align the depreciation and in turn the carrying value as per Schedule II of Companies Act, 2013.

(b) Cost of leasehold land is not amortized over the period of lease, as the same is not applicable as per Accounting Standards 19.

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets and is represented at their Net off values.

(f) The Company post for 31st March 2016 decided to discontinue its operation of the spinning unit business and held the asset for sale. The asset holds a gross block value of Rs. 1837.09 Lakhs and have a W.D.V. of ''261.28, which are held for sale. Current market valuation is not available and hence has not been disclosed. This decision was taken before the annual general meeting was held as per letter submitted to SEBI on 14th May, 2016 and the unit was a substantial operation for the company and hence is been disclosed by this note.

B) Depreciation :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis. Depreciation on addition to Fixed Assets is provided on proprata basis from the date of acquision or installation and depreciation on assets sold/discarded/ demolished/scrapped is provided upto the date on which the said asset is sold/discarded/ demolished/scrapped.

4 Inventories :

Inventories of Raw Materials, Goods in Process, Stores & Spares and Finished Goods are stated at cost or net realizable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is ‘First-in-First-out'' (FIFO) or ‘Weighted Average Cost'', as applicable.

5 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognize a decline, if any other than temporary in nature.

6 Foreign exchange transaction :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of money receivable and money payable denominated in foreign currencies, are recognized in the Statement of Profit and Loss.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Statement of Profit and Loss, as per AS-11.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Statement of Profit and Loss as per the revised Accounting Standard 11 “The Effects Of Changes In Foreign Exchange Rates”.

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as “ Foreign Exchange Rate Fluctuation”, during the year.

7 Use of estimates :

The preparation of financial statement in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the period in which these results are known/ materialized.

8 Impairment of assets :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company''s Assets. If any indication exists, an Asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount or when there is permanent diminution in its value or functionality. The recoverable amount is the greater of the net selling price and value in use.

9 Employee benefits :

Expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting Standard 15 -Employee benefits.

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

10 Research and development expenses :

Research and development expenditure of revenue nature is recognized as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

11 Treatment of contingent liabilities :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

12 Taxation :

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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Mar 31, 2015

1 Basis of preparation :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 2013, generally accepted accounting principles in India and Companies (Accounting Standards) Rules 2006 as amended from time to time to the extent applicable.

2 Revenue recognition :

(a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realisation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt in the Statement of Profit and Loss.

(c) Export incentives are accounted in the year of export.

(d) Any fluctuation, on account of a capital asset/ liability are accounted in that relevant accounting head.

3 A) Fixed assets :

(a) During the year ended 31st March, 2015, the company has provided depreciation on fixed assets considering useful lives specified in Schedule II of the Companies Act, 2013 or re-assessed by the Company. Fixed Assets are stated at cost, net of accumulated depreciation and impairment loss, if any. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalized. This year Fixed Assets value has been recalculated to re- align the depreciation and in turn the carrying value as per Schedule II of Companies Act, 2013. Depreciation to the tune of Rs.289.71 lacs has been charged towards recalculations pertaining to previous years, and Rs. 90.00 has been charged to Deferred Tax Assets. Remaining balance Rs.199.71 lacs has been deducted from Reserve and Surplus.

The depreciation and amotisation expenses charged for the year ended 31st March, 2015 would have been lower by Rs. 621.49 lacs had the company contnued with previous assessment of useful life of such asset.

(b) Cost of leasehold land is not amortised over the period of lease, as the same is not applicable as per Accounting Standards 19.

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets and is represented at their Net off values.

B) Depreciation :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis. Drepreciation on addition to Fixed Assets is provided on proprata basis from the date of acquision or installation and depreciation on assets sold/discarded/ demolished/ scrapped is provided upto the date on which the said asset is sold/discarded/ demolished/scrapped.

4 Inventories :

Inventories of Raw Materials, Goods in Process, Stores & Spares and Finished Goods are stated at cost or net realisable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is 'First-in-First-out' (FIFO) or 'Weighted Average Cost', as applicable.

5 Baramati Unit:

Under Slump Sale,Baramati Unit has been handed over to To M/s GTN Engineering (India) Ltd at a value of Rs.29.80 crores as against the Book value of Rs. 26.56 crores. In this process, M/s GTN Engineering (India) Ltd. did not take over the liabilities and creditors as as on 09.06.2013 (the day of handover and transfer).

6 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

7 Foreign exchange transaction :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of money receivable and money payable denominated in foreign currencies, are recognised in the Statement of Profit and Loss.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Statement of Profit and Loss, as per AS-11. The gross expenses of forward exchange contracts is amortised over the period fo the contract.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Statement of Profit and Loss as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as " Foreign Exchange Rate Fluctuation", during the year.

8 Use of estimates :

The preparation of financial statement in confirmity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the period in which these results are known/ materialised.

9 Impairment of assets :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company's Assets. If any indication exists, an Asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount or when there is permanent diminution in its value or functionality. The recoverable amount is the greater of the net selling price and value in use.

10 Employee benefits :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

11 Research and development expenses :

Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

12 Treatment of contingent liabilities :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

13 Taxation :

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

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Mar 31, 2014

1 Basis of preparation :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, generally accepted accounting principles in India and Companies (Accounting Standards) Rules 2006 as amended from time to time to the extent applicable.

2 Revenue recognition :

(a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realisation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt in the Statement of Profit and Loss.

(c) Export incentives are accounted in the year of export.

(d) Any fluctuation, on account of a capital asset/ liability are accounted in that relevant accounting head.

3 A) Fixed assets :

(a) Fixed Assets are stated at cost, net of accumulated depreciation and impairment loss, if any. However, in the case of Baramati Unit, fixed assets are further reduced by the amount of Sales Tax refund due. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalized.

(b) Cost of leasehold land is not amortised over the period of lease, as the same is not applicable as per Accounting Standards 19.

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets and is represented at their Net off values.

B) Depreciation :

(a) Ahmedabad Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis.

(b) Baramati Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on pro-rata basis, by applying the rates as specified in Schedule XIV to the Companies Act, 1956. However, the Plant & Machinery have been considered as Continuous Process Plant based on technical assessment and the rate of depreciation has been applied accordingly.The depreciation on assets of baramati Unit have been charged till the date these assets were under ownership of the Company.

4 Inventories :

Inventories of Raw Materials, Goods in Process, Stores & Spares and Finished Goods are stated at cost or net realisable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is ''First-in-First-out'' (FIFO) or ''Weighted Average Cost'', as applicable.

5 Baramati Unit:

Under Slump Sale,Baramati Unit has been handed over to To M/s GTN Engineering (India) Ltd at a value of Rs.29.80 crores as against the Book value of Rs. 26.56 crores.In this process, M/s GTN Engineering (India) Ltd. did not take over the liabilities and creditors as as on 09.06.2013(the day of handover and transfer).

6 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

7 Foreign exchange transaction :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of money receivable and money payable denominated in foreign currencies, are recognised in the Statement of Profit and Loss.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Statement of Profit and Loss, as per AS-11.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Statement of Profit and Loss as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as " Foreign Exchange Rate Fluctuation", during the year.

8 Use of estimates :

The preparation of financial statement in confirmity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates.Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the period in which these results are known/ materialised.

9 Impairment of assets :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company''s Assets. If any indication exists, an Asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount or when there is permanent diminution in its value or functionality. The recoverable amount is the greater of the net selling price and value in use.

10 Employee benefits :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

11 Research and development expenses :

Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

12 Treatment of contingent liabilities :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

13 Taxation :

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

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Mar 31, 2013

1 Basis of accounting :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, generally accepted accounting principles in India and Companies (Accounting Standards) Rules, 2006 as amended from time to time to the extent applicable.

2 Revenue recognition :

(a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realisation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt in the Statement of Profit and Loss.

3 A) Fixed Assets :

(a) Fixed Assets are stated at cost, net of accumulated depreciation. However, in the case of Baramati Unit, fixed assets are further reduced by the amount of Sales Tax refund due. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalized.

(b) Cost of land is not amortised as the same being a perpetual lease, amortisation of the same over the period of lease is not required.

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of the respective assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets in accordance with AS -12.

B) Depreciation :

(a) Ahmedabad Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis.

(b) Baramati Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on pro-rata basis, by applying the rates as specified in Schedule XIV to the Companies Act, 1956. However, the Plant & Machinery have been considered as Continuous Process Plant based on technical assessment and the rate of depreciation has been applied accordingly.

4 Inventories :

Inventories of Raw Materials, Goods in Process, Stores & Spares and Finished Goods are stated at cost or net realisable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is ‘First-In-First-Out'' (FIFO) or ‘Weighted Average Cost'', as applicable.

5 Investments :

Investments are classified as long term investments and current investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 Foreign exchange transaction :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the Statement of Profit and Loss.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Statement of Profit and Loss.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Statement of Profit and Loss as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as "Foreign Exchange Rate Fluctuation" during the year.

7 Use of estimates :

The preparation of financial statement requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the Financial Statement has been made relying on these estimates.

8 Impairment of assets :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company''s Assets. If any indication exists, an Asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount or when there is permanent diminution in its value or functionality. The recoverable amount is the greater of the net selling price and value in use.

9 Employee benefits :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain/loss in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

10 Research and development expenses :

Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

11 Treatment of contingent liabilities :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

12 Taxation :

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

---

Mar 31, 2012

1 Basis of accounting :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, generally accepted accounting principles in India and Companies (Accounting Standards) Rules 2006 as amended from time to time to the extent applicable.

2 Revenue recognition :

(a) Sales including export sales and trading sales are recognized when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences and rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realization is accounted as "Foreign Exchange Rate Fluctuation" and is dealt in the Profit and Loss Statement.

3 A) Fixed assets :

(a) Fixed Assets are stated at cost, net of accumulated depreciation. However, in the case of Baramati Unit, fixed assets are further reduced by the amount of Sales Tax refund due. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalized.

(b) Cost of leasehold land is not amortized over the period of lease, as the same is not applicable as per Accounting Standards 19(1)(c).

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of fixed assets.

(e) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets.

B) Depreciation :

(a) Ahmadabad Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorate basis.

(b) Baramati Unit :

Depreciation on fixed assets is charged on Straight Line Method (SLM) on pro-rata basis, by applying the rates as specified in Schedule XIV to the Companies Act, 1956. However, the Plant & Machinery have been considered as Continuous Process Plant based on technical assessment and the rate of depreciation has been applied accordingly.

4 Inventories :

Inventories of Raw Materials, Goods in Process, Stores & Spares and Finished Goods are stated at cost or net realizable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is 'First-in-First-out' (FIFO) or 'Weighted Average Cost', as applicable.

5 Investments :

Investments are classified as Long Term Investments and Current Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognize a decline, if any other than temporary in nature.

6 Foreign exchange transaction :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the Profit and Loss Statement.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Profit and Loss Statement.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Profit and Loss Statement as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as " Foreign Exchange Rate Fluctuation", during the year.

7 Use of estimates :

The preparation of financial statement requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates.

8 Impairment of assets :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company's Assets. If any indication exists, an Asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount or when there is permanent diminution in its value or functionality. The recoverable amount is the greater of the net selling price and value in use.

9 Employee benefits :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit and Loss Statement of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss Statement for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Profit and Loss Statement.

10 Research and development expenses :

Research and development expenditure of revenue nature is recognized as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

11 Treatment of contingent liabilities :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

12 Taxation :

Tax expense comprises current and deferred tax. Current tax is measured at the amount estimated/calculated to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

---

Mar 31, 2011

1 BASIS OF ACCOUNTING :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, generally accepted accounting principles in India and Companies (Accounting Standards) Rules 2006 as amended from time to time to the extent applicable.

2 REVENUE RECOGNITION :

(a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realisation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt in the Profit and Loss Account.

3 A) FIXED ASSETS :

(a) Fixed Assets are stated at cost, net of accumulated depreciation. However, in the case of Baramati Unit, fixed assets are further reduced by the amount of Sales Tax refund due. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalised.

(b) Cost of leasehold land is not amortised over the period of lease, as the same is exempted as per Accounting Standards 19 (1) (c).

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets.

B) DEPRECIATION :

(a) Ahmedabad Unit:

Depreciation on fixed assets is charged on Straight-Line method on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis.

(b) Baramati Unit:

Depreciation on fixed assets is charged on Straight-Line Method on pro-rata basis, by applying the rates as specified in Schedule XIV to the Companies Act, 1956. However, the Plant & Machineries have been considered as Continuous Process Plant based on technical assessment and are depreciated accordingly.

4 INVENTORIES :

Inventories of Raw Materials, Goods in Process, Stores and Spares and Finished Goods are stated at cost or net realisable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used are 'First-in-First-out' (FIFO) or 'Weighted Average Cost', as applicable.

5 INVESTMENTS :

Investments are classified as Long Term Investments and Current Investments as per AS -13 "Accounting for Investments". Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 FOREIGN EXCHANGE TRANSACTIONS :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the Profit and Loss Account.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Profit and Loss Account.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Profit & Loss Account as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as " Foreign Exchange Rate Fluctuation", during the year.

7 USE OF ESTIMATES :

The preparation of financial statement requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates.

8 IMPAIRMENT OF ASSETS :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company's Assets. If any indication exists, an Asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

9 EMPLOYEE BENEFITS :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Profit & Loss Account.

10 RESEARCH AND DEVELOPMENT EXPENSES :

Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

11 TREATMENT OF CONTINGENT LIABILITIES :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

12 AMORTISATION OF MISCELLANEOUS EXPENDITURE :

Upfront processing charges and expenses related to loans from IDBI, Dena Bank and Exim Bank are being amortised over a period of loan i.e. ten years.

Preliminary expenses being cost of increasing authorised capital & GDR issue expenses are amortised over a period of ten years.

Upfront fee and loan processing charges paid to ICICI Bank Limited are amortised over a period of five years.

In view of AS-26 "Intangible Assets", balance which remained in "Deferred Revenue Expenditure Account" as on 31st March, 2011 of Rs 7,725,974/- has been written off by charging the same to the Profit & Loss Acccount under the head "Prior Period Item".

13 EXPORT INCENTIVES :

Following the Accrual Concept of Accountancy, the Company has taken credits as income for Rs. 16,461,806/- (Previous Year Rs. 12,312,267/-) being Duty Drawback available and DEPB License at the close of the year, and the same has been shown as Miscellaneous Receipts under the head "Other Income"- Schedule 15.

14 TAXATION:

Tax expense comprises current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

---

Mar 31, 2010

1 BASIS OF ACCOUNTING :

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, generally accepted accounting principles in India and Companies (Accounting Standards) Rules 2006 as amended from time to time to the extent applicable.

2 REVENUE RECOGNITION :

(a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, discounts, rate differences, rebate allowed to customers.

(b) Export Sales are booked on the rate prevailing on the date of transaction and the resultant gain or loss on realisation is accounted as “Foreign Exchange Rate Fluctuation” and is dealt in the Profit and Loss Account.

3 A) FIXED ASSETS :

(a) Fixed Assets are stated at cost, net of accumulated depreciation. However, in the case of Baramati Unit, fixed assets are further reduced by the amount of Sales Tax refund due. All costs including financing costs till the commencement of commercial production related to the acquisition and installation of the respective assets have been capitalised.

(b) Cost of leasehold land is not amortised over the period of lease, as the same is exempted as per Accounting Standards 19 (1) (c).

(c) Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on commissioning of assets.

(d) Assets, identified and evaluated technically as obsolete and held for disposal have been written off in relevant year and adjusted from profit on sale of Fixed Assets.

(e) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Profit & Loss Account as per the revised Accounting Standard 11 “The Effects Of Changes In Foreign Exchange Rates”.

(f) The 10% Capital Subsidy under TUFS from Ministry of Textiles on specified processing machinery has been deducted from the respective Fixed Assets.

B) DEPRECIATION :

(a) Ahmedabad Unit :

Depreciation on fixed assets is charged on Straight-Line method on prorata basis, except on the fixed assets purchased during the period 1st April, 1988 to 31st March, 2005 on which depreciation has been charged on Written Down Value Method on prorata basis.

(b) Baramati Unit :

Depreciation on fixed assets is charged on Straight-Line Method on pro-rata basis, by applying the rates as specified in Schedule XIV to the Companies Act, 1956. However, the Plant & Machineries have been considered as Continuous Process Plant based on technical assessment and are depreciated accordingly.

4 INVENTORIES :

Inventories of Raw Materials, Goods in Process, Stores and Spares and Finished Goods are stated at cost or net realisable value whichever is lower except saleable waste which is valued at contracted selling price. Goods in Transit are stated at cost. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost formulae used is ‘First-in-First-out (FIFO) basis.

5 INVESTMENTS :

Investments are classified as Long Term Investments and Current Investments as per AS -13 “Accounting for Investments”. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 FOREIGN EXCHANGE TRANSACTIONS :

(a) Foreign currency transactions are recorded at the exchange rates at the date of transaction.

(b) Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the Profit and Loss Account.

(c) Premium in respect of forward contracts is accounted over the period of the contract.

(d) Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the resultant gain or loss is dealt with in Profit and Loss Account.

(e) All foreign currency loans outstanding at the close of the balance period are expressed in Indian currency at the exchange rate prevailing on the date of Balance Sheet.

(f) Foreign exchange rate variations relating to acquisition of Fixed Assets are transferred to Profit & Loss Account as per the revised Accounting Standard 11 "The Effects Of Changes In Foreign Exchange Rates".

(g) Current assets & current liabilities in foreign currency, other than those covered by forward exchange contracts, outstanding at the close of the balance sheet date are converted in Indian currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted as " Foreign Exchange Rate Fluctuation", during the year.

7 USE OF ESTIMATES :

The preparation of financial statement requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of the information in the financial statement has been made relying on these estimates.

8 IMPAIRMENT OF ASSETS :

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Companys Assets. If any indication exists, an Assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

9 EXCISE DUTY :

The Company has obtained exemption for excise duty with effect from 10.11.2004 with respect to Ahmedabad Unit and with effect from 24.02.2006 with respect to Baramati Unit.

10 EMPLOYEE BENEFITS :

(a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

(b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain / loss in respect of post employment and other long term benefits are charged to Profit & Loss Account.

11 RESEARCH AND DEVELOPMENT EXPENSES :

Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and the expenditure of capital nature are depreciated over the useful lives of the assets.

12 TREATMENT OF CONTINGENT LIABILITIES :

Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.

13 AMORTISATION OF DEFERRED REVENUE EXPENDITURE :

- Upfront processing charges and expenses related to loans from IDBI, Dena Bank and Exim Bank are being amortised over a period of loan i.e. ten years.

- Preliminary expenses including cost of increasing authorised capital & GDR issue expenses are amortised over a period of ten years.

- Upfront fee and loan processing charges paid to ICICI Bank Ltd. are amortised over a period of five years.

- Overhauling charges of DG Set are to amortised over expected running hours of the DG Set. However, the management has decided to write off 100% expenditure during the year, as the Company will not use the DG set because the MSEB rate is cheaper than generating electricity from DG set.

14 EXPORT INCENTIVES :

Following the Accrual Concept of Accountancy, the Company has taken credits as income for Rs.12,312,267/- (Previous year Rs. 22,239,294/-) being Duty Drawback available and DEPB License at the close of the year.

15 TAXATION :

Ta x expense comprises current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Ta x Act, 1961. Deferred tax reflects the tax effect of the timing differences between accounting income and taxable income originating and reversing during the year. Deferred tax is measured based on the tax rate and tax laws enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.