Accounting Policies of PBM Polytex Ltd. Company

Mar 31, 2024

1B - MATERIAL ACCOUNTING POLICIES

(1) Basis of Preparation:

Compliance with Ind AS

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (''Ind AS'') as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (as amended from time to time).

Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

1) certain financial assets and liabilities that are measured at fair value;

2) defined benefit plans - plan assets measured at fair value;

Current and non-current classification

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.

Functional currency:

The financial statements are presented in Indian rupee (INR), which is Company''s functional and presentation currency.

Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh as per the requirement of Schedule III, unless otherwise stated.

(2) Key accounting estimates & judgements:

The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.

(3) Property, Plant & Equipment:

Property, plant and equipment are stated at cost, net of recoverable taxes, less depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and other cost directly attributable to the acquisition of the items.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

All expenditure incurred towards property, plant and equipment including expenditure incurred during construction / new projects are accumulated and shown as capital work in progress and not depreciated until such assets are ready for commercial use.

Depreciation methods, estimated useful lives and residual value

Depreciation is provided on a Straight Line Method over the estimated useful lives of assets as follows:-

The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

Leasehold land is amortized over the period of lease.

(4) Intangible Assets

Computer software is stated at cost, less accumulated amortisation and impairments, if any.

Amortisation method and useful life

The Company amortizes computer software using the straight-line method over the period of 5 years. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

(5) Inventories:

Items of inventories of Raw Material, Finished goods, Spares and Stores, Packing Material, etc. are valued at lower of cost or net realizable value except waste which is valued at estimated net realizable value. Cost is computed on a weighted average basis. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. The net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make the sale.

(6) Financial Instruments

i. Recognition and initial measurement

All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under Ind AS 115.

ii. Classification and subsequent measurement Financial assets

On initial recognition, a financial asset is classified as measured at

• amortized cost;

• Fair Value through Other Comprehensive Income (FVOCI) - equity investment; or

• Fair Value Through Profit and Loss (FVTPL)

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

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

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

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI. (designated as FVOCI - equity investment). This election is made on an investment-byinvestment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial liabilities

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

De-recognition Financial assets

The company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at

fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss.

Off-setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(7) Revenue recognition

Revenue is measured at the value of the consideration received or receivable, after deduction of any trade discount, volume rebates and any taxes or duties collected on behalf of Government such as Goods and Services Tax, etc.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company''s activities as described below.

Sale of goods

Revenue from sale of goods is recognised when control of the products being sold is transferred to our customers and there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

Other revenue:

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

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

Dividends are generally recognised in the Statement of Profit and Loss only when the right to receive is established.

(8) Foreign Currency Transactions:

Foreign currency transactions are translated into the functional currency using exchange rate at the date of the transaction. Foreign exchange gains and losses from the settlement of these transactions are recognized in the statement of profit and loss. Foreign currency denominated monetary assets and liabilities are translated into functional currency at the exchange rates in effect at the balance sheet date, the gain or loss arising on such translations are recognized in the statement of profit and loss.

(9) Income tax

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.

(a) Current Tax

Current tax includes provision for Income Tax computed under Special provision (i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.

(b) Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

(c) Minimum Alternate Tax (MAT):

MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.

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Mar 31, 2018

1A - SIGNIFICANT ACCOUNTING POLICIES

(1) Basis of Preparation:

Compliance with Ind AS

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.

These financial statements for the year ended 31st March, 2018 are the first financial statements with comparatives, prepared under Ind AS. For all previous periods including the year ended 31st March, 2017. The Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India.

The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the date of transition to Ind AS.

Historical cost convention

The financial statements have been prepared on historical cost basis, except for the following:

1) certain financial assets and liabilities that are measured at fair value or amortized cost;

2) defined benefit plans - plan assets are measured at fair value;

Current and non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.

Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh as per the requirement of Schedule III, unless otherwise stated.

(2) Use of Estimates:

The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.

(3) Property, Plant & Equipment:

Property, plant and equipment are stated at cost, net of recoverable taxes, less depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and other cost directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation methods, estimated useful lives and residual value

Depreciation is provided on a Straight Line Method over the estimated useful lives of assets. The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.

The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss. Leasehold land is amortized over the period of lease.

(4) Intangible Assets

Computer software are stated at cost, less accumulated amortisation and impairments, if any.

Amortisation method and useful life

The Company amortizes computer software using the straight-line method over the period of 5 years. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

(5) Inventories:

Items of inventories of Raw Material, Finished goods, Spares and Stores, Packing Material & Fuel are valued at lower of cost at weighted average method or net realizable value except waste which is valued at estimated net realizable value. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

(6) Financial Instruments (IND AS 109)

i. Recognition and initial measurement

All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii. Classification and subsequent measurement Financial assets

On initial recognition, a financial asset is classified as measured at

- amortized cost;

- Fair Value through Other Comprehensive Income (FVOCI) - equity investment; or

- Fair Value Through Profit and Loss (FVTPL)

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

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

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

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. (designated as FVOCI - equity investment). This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial liabilities

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

De-recognition

Financial assets

The company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss. Off-setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(7) Revenue recognition

Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty (upto June’17) and net of returns, trade allowances, rebates, discounts, value added taxes and amounts collected on behalf of third parties.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company’s activities as described below.

Sale of goods

Sales are recognised when substantial risk and rewards of ownership are transferred to customer, In case of domestic customer, generally sales take place when goods are dispatched or delivery is handed over to transporter. In case of export customers, generally sales take place when goods are shipped onboard based on bill of lading.

Other operating revenue:

Export Incentives under various schemes are accounted in the year in which right to receive is irrevocably established.

Other revenue:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest. Revenue in respect of insurance/other claims etc, is recognized only when it is reasonably certain that the ultimate collection will be made.

Dividend

Dividends are generally recognised in the Statement of Profit and Loss only when the right to receive payment is established.

(8) Goods and Services Tax / Service Tax input Credit:

Goods and Services Tax / Service Tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.

(9) Foreign Currency Transactions:

The financial statements are presented in Indian rupee (INR), which is Company’s functional and presentation currency.

Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the statement of profit and loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

In case of forward contracts, the gain / loss on contracts are treated as periodical expense or revenue. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the statement of profit and loss in the reporting period in which the exchange rates change.

(10) Income tax

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.

(a) Current Tax

Current tax includes provision for Income Tax computed under Special provision (i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.

(b) Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

(c) Minimum Alternate Tax (MAT):

MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.

(11) Provisions and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

(12) Employee benefits Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefit obligations

The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.

Post-employment obligations

The Company operates the following post-employment schemes:

(a) defined benefit plans such as gratuity; and

(b) defined contribution plans such as provident fund.

Gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Gratuity liability of employees is funded with the approved gratuity trusts.

Defined Contribution Plans

Defined Contribution Plans such as Provident Fund, etc., are charged to the Statement of Profit and Loss as incurred. The Company contributes to Superannuation Trust for the Managerial Personnel of the Company as per the rules of the Trust.

(13) Borrowing costs

Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest and borrowing costs are charged to Statement of Profit and Loss.

(14) Earnings Per Share Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company

- average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

(15) Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable Value. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been a change in the estimate of recoverable amount.

(16) Leases :

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. Lease under which the company assumes potentially all the risks and rewards of ownership are classified as finance lease. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower.

Lease payments under operating leases are recognized as expenses on straight line basis in net profit in the Statement of Profit and Loss over the lease term. Unless the payments are structured to increase in line with expected general inflation to compensate lessors expected inflationary cost increases.

(17) Cash Flow Statements

The Cash Flow statement is prepared by the "Indirect method" set out in Ind AS-7 on "Cash Flow Statement" and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash Equivalent presented in the cash flow statement consist of cash on hand and demand deposits with banks.

(18) Events occurring after the balance sheet date (IND AS 10)

Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist the estimation of amounts relating to conditions existing at the end of the reporting period.

Dividends declared by the Company after the reporting period are not recognized as liability at the end of the reporting period. Dividends declared after the reporting period but before the issue of financial statements are not recognized as liability since no obligation exists at that time. Such dividends are disclosed in the notes to the financial statements.

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Mar 31, 2016

(1) Corporate Information:

PBM Polytex Limited is a public company incorporated in India. Its shares are listed on the BSE Limited and the Ahmedabad Stock Exchange Limited. The Company is engaged in manufacture and processing of yarn. The Company is focusing more on exports.

(2) Basis of Preparation:

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis and under the historical cost convention. The accounting policies adopted in preparation of financial statements are consistent with those of previous year.

(3) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates is recognized in the period in which the results are known / materialized.

(4) Fixed Assets:

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. All costs including financing costs till commencement of commercial production and Exchange rate variations relating to the Borrowing are capitalized / adjusted to the fixed assets.

(5) Depreciation: Depreciation has been provided as under during the year:

A) PETLAD AND BORGAON UNITS:

(a) On Assets other than Plant and Machineries:

Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013.

(b) On Plant and Machineries :

Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013 applicable to continues process plant (CPP) as certified the Chartered Engineer.

(c) Leasehold Land: Amortized over the period of Lease.

B) WINDMILLS:

(a) Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013.

(b) The difference between the depreciation lower/excess charge than in the previous year has been adjusted in the current year.

(6) Inventories:

The cost of various categories of inventory is determined as follows:

(a) Stores, Spares, Packing Material, Fuel & others - At Lower of Cost or Net realizable value

(b) Raw material - At Average value of Opening Stock and Purchase

(c) Stock - in - Process - At Lower of Cost or Net realizable value

(d) Finished Goods - At Lower of Cost or Net realizable value

(e) Material in Transit - At Cost

(f) Waste (Cotton and Yarn) - At Net Realizable value

(7) Foreign Currency Transactions:

(a) Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the statement of profit and loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward contracts, the gain / loss on contracts are treated as periodical expense or revenue. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the statement of profit and loss in the reporting period in which the exchange rates change.

(8) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company’s contribution to Provident Fund is charged to Revenue Account. ESI is applicable only to Mumbai Office of the Company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the Company as per the rules of the Trust.

(9) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(10) Revenue Recognition:

Items of Income and Expenditure are recognized on accrual basis except Insurance Claims, DEPB / Focus Marketing License, TUFS Rebate and Service Tax Refund which are accounted for on transfer or receipt.

(a) Expenses are net of taxes recoverable wherever applicable.

(11) Excise Duty, CENVAT Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of “Optional” Excise Duty at “NIL” Rate or at applicable Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(12) Earning Per Share:

The earnings considered in ascertaining the Company’s E.P.S. comprise the net profit after tax divided by the number of shares.

(13) Taxation:

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax asset for all timing differences arising between taxable incomes and accounting income at currently enacted tax rates. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(14) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(15) Investments:

Long Term Investments are carried at cost. Temporary diminution in value of such investments, if any, is ignored.

(16) Provisions and contingencies:

A provision is recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the Company has a probable obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.

(17) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Selling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and willing parties less the cost of disposal.

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Mar 31, 2015

(1) Corporate Information:

PBM Polytex Limited is a public company incorporated in India, its share are listed on the Bombay Stock Exchange and the Ahmedabad Stock Exchange. The Company is engaged in the manufacture and processing of yarn. The yarn is exported in considerable quantity.

(2) Basis of Preparation:

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(3) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates is recognized in the period in which the results are known / materialized.

(4) Fixed Assets:

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. All costs including financing costs till commencement of commercial production and Exchange rate variations relating to the Borrowing are capitalized / adjusted to the fixed assets.

(5) Depreciation: Depreciation has been provided as under during the year:

A) PETLAD AND BORGAON UNITS:

(a) On Assets other than Plant and Machineries:

Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013.

(b) On Plant and Machineries :

Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013 applicable to continues process plant (CPP) as certified the chartered Engineer.

(c) Leasehold Land: Amortized over the period of Lease.

B) WINDMILLS:

Computed considering the useful life of the asset as prescribed under Schedule II of the Companies Act, 2013.

The difference between the depreciation lower/excess charge than in the previous year as been adjust in the current year.

(6) Inventories:

The cost of various categories of inventory is determined as follows:

(a) Stores, Spares, Packing Material, Fuel & others - At Lower of Cost or Net realisable value

(b) Raw material - At Average value of Opening Stock and Purchase

(c) Stock - in - Process - At Lower of Cost or Net realisable value

(d) Finished Goods - At Lower of Cost or Net realisable value

(e) Material in Transit - At Cost

(f) Waste (Cotton and Yarn) - At Net Realisable value '

(7) Foreign Currency Transactions:

(a) Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the statement of profit and loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward contracts, the gain / loss on contracts are treated as periodical expense or revenue. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the statement of profit and loss in the reporting period in which the exchange rates change.

(8) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company's contribution to Provident Fund is charged to Revenue Account. ESIC is applicable only to Mumbai Office of the Company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the Company as per the rules of the Trust.

(9) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(10) Revenue Recognition:

(a) Items of Income and Expenditure are recognized on accrual basis except Insurance Claims, DEPB / focus Marketing License and TUFS rebate which are accounted for on transfer or receipt.

(b) Expenses are net of taxes recoverable wherever applicable.

(11) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of "Optional" Excise Duty at "NIL" Rate or at applicable Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(12) Earning Per Share:

The earnings considered in ascertaining the Company's E.P.S. comprise the net profit after tax divided by the number of shares.

(13) Taxation:

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax asset for all timing differences arising between taxable incomes and accounting income at currently enacted tax rates. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(14) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(15) Investments:

Long Term Investments are carried at cost. Temporary diminution in value of such investments, if any, is ignored.

(16) Provisions and contingencies:

A provision is recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the Company has a probable obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.

(17) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Selling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and willing parties less the cost of disposal.

---

Mar 31, 2014

(1) Basis of Accounting:

The financial statements have been prepared on historical cost convention in accordance with the Generaly Accepted Accounting Principles (GAAP) and the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act 1956.

(2) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates is recognized in the period in which the results are known / materialized.

(3) Fixed Assets:

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. Al costs including financing costs til commencement of commercial production and Exchange rate variations relating to the Borowing are capitalized / adjusted to the fixed assets.

(4) Depreciation: Depreciation has been provided as under:

A) PETLAD AND BORGAON UNITS:

(a) On Assets other than Plant and Machineries and Electrical Installations:

On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Instalations:

On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

(c) Leasehold Land: Amortized over the period of Lease.

B) WINDMILLS:

On Plant and Machineries and Electrical Instalations on written down value at the rates prescribed in clause II (i-a) of Schedule XIV of the Companies Act.

(5) Inventories:

(a) Stores, Spares, Packing Materials, Fuel & others- At Lower of Cost or Net realizable value

(b) Raw materials- At Average Value of Opening Stock and Purchases

(c) Stock-in-Process- At Lower of Cost or Net Realizable Value

(d) Finished Goods- At Lower of Cost or Net Realizable Value

(e) Material in Transit- At Cost

(f) Waste (Cotton/Yarn)- At Net Realizable Value

(6) Foreign Curency Transactions:

(a) Foreign curency transactions are accounted for at the exchange rate prevailing on the date of the transaction. Al monetary foreign curency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. Al exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the statement of profit and loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward contracts, the gain / loss on contracts is treated as periodical expense or revenue. Any profit or loss arising on the cancelation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incured for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign curency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the coresponding foreign curency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the statement of profit and loss in the reporting period in which the exchange rates change.

(7) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company''s contribution to Provident Fund is charged to Revenue Account. ESIC is applicable only to Mumbai Office of the company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the company as per the rules of the Trust.

(8) Borowing Cost:

Borowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Al other borowing costs are charged to revenue.

(9) Revenue Recognition:

Items of Income and Expenditure are recognized on accrual basis except Insurance Claims, DEPB / focus Marketing License and TUFS rebate which are accounted for on transfer or receipt.

(10) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of "Optional" Excise Duty at "NIL" Rate or at applicable Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(11) Earning Per Share:

The earnings considered in ascertaining the company''s E.P.S. comprise the net profit after tax divided by the number of shares.

(12) Taxation:

Tax expense for the year, comprising curent tax and defered tax is included in determining the net profit for the year. A provision is made for the curent tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for defered tax asset for al timing differences arising between taxable incomes and accounting income at curently enacted tax rates.

Defered tax assets are recognized only if there is reasonable certainty that they wil be realized and are reviewed for the appropriateness of their respective carying values at each balance sheet date.

(13) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(14) Investments:

Long Term Investments are caried at cost. Temporary diminution in value of such investments, if any, is ignored.

(15) Provisions and contingencies:

A provision is recognized when the company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow wil be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the company has a probable obligation where it is not probable that an outflow of resources wil be required to settle it. Contingent assets are neither recognized nor disclosed.

(16) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset''s net seling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Seling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and wiling parties less the cost of disposal.

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Mar 31, 2013

(1) Basis of Accountng:

The fnancial statements have been prepared on hstorcal cost conventon n accordance wth the Generaly Accepted Accountng Prnciples (GAAP) and the Accountng Standards ssued by the Insttute of Chartered Accountants of Inda and the provisons of the Companes Act 1956.

(2) Use of Estmates:

The presentaton of fnancial statements n conformty wth the GAAP requres estmates and assumptons to be made that affect the reported amount of assets and liablities on the date of the fnancial statements and the reported amount of revenues and expenses durng the reportng perod. Dfference between the actual result and estmates s recognzed n the perod n whch the results are known / materalized.

(3) Fxed Assets:

Fxed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credt less Accumulated Depreciaton. Al costs ncludng fnancing costs tl commencement of commercial producton and Exchange rate varatons relatng to the Borrowng are captalized / adjusted to the fxed assets.

(4) Depreciaton: Depreciaton has been provided as under:

A) PETLAD AND BORGAON UNITS:

(a) On Assets other than Plant and Machneres and Electrcal Installatons:

On Straght Lne Method at the rates mentoned under Notfcaton No. GSR 756(E) dated 16.12.1993 read wth Schedule XIV of the Act.

(b) On Plant and Machneries & Electrcal Instalatons:

On Straght Lne Method at the rates applicable to Contnuous Process Plant (CPP) as defned n Schedule XIV and certfed by the Chartered Engineer.

(c) Leasehold Land: Amortzed over the perod of Lease.

B) WINDMILLS:

On Plant and Machneres and Electrcal Instalatons on wrtten down value at the rates prescrbed n clause II (-a) of Schedule XIV of the Companes Act.

(5) Inventores:

(a) Stores, Spares, Packing Materal, Fuel & others- At Cost (Weghted Average Method)

(b) Raw materals- At Lower of Cost or Net Realizable Value

(c) Stock-n-Process- At Lower of Cost or Net Realizable Value

(d) Fnshed Goods- At Lower of Cost or Net Realizable Value

(e) Materal in Transt- At Cost (Specifc Cost Method)

(f) Cotton / Yarn Waste- At Net Realizable Value

(6) Foregn Currency Transactions:

(a) Foregn currency transactons are accounted for at the exchange rate prevaling on the date of the transaction. Al monetary foregn currency assets and liablites are converted at the exchange rates prevaling on the date of the balance sheet. Al exchange dfferences other than those relatng to the acquston of fxed assets from outsde Inda are dealt wth n the statement of proft and loss. Exchange gan or loss relatng to fxed assets acqured from outsde Inda s adjusted n the cost of respective fxed assets.

(b) In case of forward contracts, the gan / loss on contracts s treated as perodcal expense or revenue. Any proft or loss arsng on the cancelaton or renewal of a forward exchange contract s recognzed as ncome or expense for the year, except n case of a forward exchange contract relatng to liablites ncurred for acqurng fxed assets from outsde Inda, n whch case, such proft or loss s adjusted n the cost of fxed assets.

(c) Exchange dfference s calculated as the dfference between the foregn currency amount of the contract translated at the exchange rate at the reportng date, or the settlement date where the transaction s settled durng the reportng perod, and the correspondng foregn currency amount translated at the later of the date of ncepton of the forward exchange contract and the last reportng date. Such exchange dfferences are recognzed n the statement of proft and loss n the reportng perod n whch the exchange rates change.

(7) Retrement Benefits:

(a) Provison for gratuty liablity to employees s made on the bass of ntmaton receved from Lfe Insurance Corporaton of Inda on actuaral bass. Group Gratuty Fund s managed by the Lfe Insurance Corporaton of Inda and SBI Lfe Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the bass of liablity ascertaned as per the actuaral valuaton.

(c) The Company''s contrbuton to Provident Fund s charged to Revenue Account. ESIC s applicable only to Mumba Offce of the company.

(d) Superannuaton Fund: The Company contrbutes to Superannuaton Trust for the Manageral Personnel of the company as per the rules of the Trust.

(8) Borrowng Cost:

Borrowng costs that are attrbutable to the acquston or construction of qualifying assets are captalized as part of the cost of such assets. A qualifying asset s one that necessarly takes substantal perod of tme to get ready for ts ntended use. Al other borrowng costs are charged to revenue.

(9) Revenue Recogntion:

Items of Income and Expendture are recognzed on accrual bass except Insurance Claims, DEPB / focus Marketng Lcense and TUFS rebate whch are accounted for on transfer or recept.

(10) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on fnshed goods s accounted for on clearance of goods. 50% of Cenvat Credt on captal goods s accounted for mmedately on recept and the balance s accounted n the next year. In pursuance to Crcular No. 795/28/2004 dated 28.07.2004 the Company (beng textle manufacturer) has adopted policy of charging of "Optonal" Excise Duty at "NIL" Rate or at 4% Rate as desred by the customer. VAT credt on raw materal (ncludng processng materals, consumable stores and packing materals) and captal goods s accounted on purchase and actual recept of the same.

(11) Earning Per Share:

The earnngs consdered n ascertanng the company''s E.P.S. comprse the net proft after tax dvided by the number of shares.

(12) Taxaton:

Tax expense for the year, comprsng current tax and deferred tax s ncluded n determnng the net proft for the year. A provison s made for the current tax based on tax liablity computed n accordance wth relevant tax rates and tax laws. A provison s made for deferred tax asset for al tmng dfferences arsng between taxable ncomes and accountng ncome at currently enacted tax rates.

Deferred tax assets are recognzed only f there s reasonable certanty that they wl be realized and are reviewed for the approprateness of ther respective carrying values at each balance sheet date.

(13) Segment Accountng:

The Company manufactures and deals n sngle product .e. Cotton Yarn only and therefore, Accountng Standard 17 on Segment Reportng s not applicable.

(14) Investments:

Long Term Investments are carred at cost. Temporary dmnuton n value of such nvestments, f any, s gnored.

(15) Provisons and contngencies:

A provison s recognzed when the company has a legal and constructve obligaton as a result of a past event, for whch t s probable that cash outflow wl be requred and a reliable estmate can be made of the amount of the obligaton. A contngent liablity s dsclosed when the company has a possble or present obligaton where t s not probable that an outflow of resources wl be requred to settle t. Contngent assets are nether recognzed nor dsclosed.

(16) Imparment Loss:

Imparment Loss, f any, s provided to the extent the carrying amount of assets exceed ther recoverable amounts. Recoverable amount s that whch s hgher of an asset''s net seling prce and ts value n use. Value n use s the present value of estmated future cash flows expected to arse from the contnung use of the assets and from ts dsposal at the end of ts useful life. Net Seling Prce s the amount obtanable from sale of the asset on arms length bass between knowledgeable and wling partes less the cost of dsposal.

---

Mar 31, 2012

(1) Basis of Accounting:

The financial statements have been prepared on historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act 1956.

(2) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimate s i s recognized in the period in which the results are known / materialized.

(3) Fixed Assets:

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. All costs including financing costs till commencement of commercial production and Exchange rate variations relating to the Borrowing are capitalized / adjusted to the fixed assets.

(4) Depreciation: Depreciation has been provided as under:

A) PETLAD AND BORGAON UNITS:

(a) On Assets other than Plant and Machineries and Electrical Installations:

On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Installations:

On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

(c) Leasehold Land: Amortized over the period of Lease.

B) WINDMILLS:

On Plant and Machineries and Electrical Installations on written down value at the rates prescribed in clause II (i-a) of Schedule XIV of the Companies Act.

(5) Inventories:

(a) Stores, Spares, Packing Material, Fuel & others- At Cost (Weighted Average Method)

(b) Raw materials- At Lower of Cost or Net Realizable Value

(c) Stock-in-Process- At Lower of Cost or Net Realizable Value

(d) Finished Goods- At Lower of Cost or Net Realizable Value

(e) Material in Trans it- At Cost (Specific Cost Method)

(f) Cotton / Yarn Waste- At Net Realizable Value

(6) Foreign Currency Transactions:

(a) Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the statement of profit and loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward contracts, the gain / loss on contracts is treated as periodical expense or revenue. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the statement of profit and loss in the reporting period in which the exchange rates change.

(7) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company's contribution to Provident Fund is charged to Revenue Account. ESIC is applicable only to Mumbai Office of the company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the company as per the rules of the Trust.

(8) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(9) Revenue Recognition:

Items of Income and Expenditure are recognized on accrual basis except Insurance Claims and TUFS rebate which are accounted for on transfer or receipt.

(10) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of "Optional" Excise Duty at "NIL" Rate or at 4% Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(11) Earning Per Share:

The earnings considered in ascertaining the company's E.P.S. comprise the net profit after tax divided by the number of shares.

(12) Taxation:

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax asset for all timing differences arising between taxable incomes and accounting income at currently enacted tax rates.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(13) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(14) Investments:

Long Term Investments are carried at cost. Temporary diminution in value of such investments, if any, is ignored.

(15) Provisions and contingencies:

A provision is recognized when the company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.

(16) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Selling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and willing parties less the cost of disposal.

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Mar 31, 2011

(1) Basis of Accounting:

The financial statements have been prepared on historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act 1956.

(2) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates is recognized in the period in which the results are known/materialized.

(3) Fixed Assets:

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. All costs including financing costs till commencement of commercial production and Exchange rate variations relating to the Borrowing are capitalized / adjusted to the fixed assets.

(4) Depreciation: Depreciation has been provided as under:

A) PETLAD UNIT:

(a) On Assets other than Plant and Machinery and Electrical Installations:

On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Installations:

On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

B) BORGAON UNIT:

(a) On Assets other than Plant and Machinery and Electrical Installations:

On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Installations:

On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

(c) Leasehold Land: Amortized over the period of Lease.

C) WINDMILLS:

On Plant and Machinery and Electrical Installations on written down value at rates prescribed in clause II (a) of Schedule XIV of the Companies Act.

(5) Inventories:

(a) Stores, Spares, Packing Material, Fuel & others- At Cost (Weighted Average Method)

(b) Raw materials- At Lower of Cost or Net Realizable Value

(c) Stock-in-Process- At Lower of Cost or Net Realizable Value

(d) Finished Goods- At Lower of Cost or Net Realizable Value (e) Material in Transit- At Cost (Specific Cost Method)

(f) Cotton / Yarn Waste- At Net Realizable Value

(6) Foreign Currency Transactions:

(a) Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the profit and loss account. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward exchange contracts, the cost of contracts is amortized over the period of contract. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the profit and loss account in the reporting period in which the exchange rates change.

(7) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company's contribution to Provident Fund is charged to Revenue Account. ESIC is applicable only to Mumbai Office of the company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the company as per the rules of the Trust.

(8) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(9) Revenue Recognition:

Items of Income and Expenditure are recognized on accrual basis except Insurance Claims, TUFS rebate, and export incentives like Duty Drawback, DEPB, and Interest Subsidy, which are accounted for on transfer or receipt.

(10) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of "Optional" Excise Duty at "NIL" Rate or at 4% Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(11) Earning Per Share:

The earnings considered in ascertaining the company's E.P.S. comprise the net profit after tax divided by the number of shares.

(12) Taxation:

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax asset for all timing differences arising between taxable incomes and accounting income at currently enacted tax rates.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(13) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(14) Investments:

Long Term Investments are carried at cost. Temporary diminution in value of such investments, if any, is ignored.

(15) Provisions and contingencies:

A provision is recognized when the company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.

(16) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Selling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and willing parties less the cost of disposal.

---

Mar 31, 2010

(1) Basis of Accounting:

The financial statements have been prepared on historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act 1956.

(2) Use of Estimates:

The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates is recognised in the period in which the results are known/materialised.

(3) Fixed Assets :

Fixed Assets are stated at Cost or at Revalued Cost, net of CENVAT / VAT Credit less Accumulated Depreciation. All costs including financing costs till commencement of commercial production and Exchange rate variations relating to the Borrowing are capitalised / adjusted to the fixed assets.

(4) Depreciation: Depreciation has been provided as under:

A) PETLAD UNIT:

(a) On Assets other than Plant and Machinery and Electrical Installations: On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Installations: On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

B) BORGAON UNIT:

(a) On Assets other than Plant and Machinery and Electrical Installations: On Straight Line Method at the rates mentioned under Notification No. GSR 756(E) dated 16.12.1993 read with Schedule XIV of the Act.

(b) On Plant and Machineries & Electrical Installations: On Straight Line Method at the rates applicable to Continuous Process Plant (CPP) as defined in Schedule XIV and certified by the Chartered Engineer.

(c) Leasehold Land : Amortized over the period of Lease.

C) WINDMILLS :

On Plant and Machinery and Electrical Installations on written down value at rates prescribed in clause II(a) of Schedule XIV of the Companies Act.

(5) Inventories:

(a) Stores, Spares, Packing Material & Fuel- At Cost (Weighted Average Method)

(b) Raw materials- At Lower of Cost or Net Realisable Value

(c) Stock-in-Process- At Lower of Cost or Net Realisable Value

(d) Finished Goods- At Lower of Cost or Net Realisable Value

(e) Material in Transit- At Cost (Specific Cost Method)

(f) Cotton / Yarn Waste- At Net Realisable Value

(6) Foreign Currency Transactions:

(a) Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the profit and loss account. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets.

(b) In case of forward exchange contracts, the cost of contracts is amortised over the period of contract. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.

(c) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the profit and loss account in the reporting period in which the exchange rates change.

(7) Retirement Benefits:

(a) Provision for gratuity liability to employees is made on the basis of intimation received from Life Insurance Corporation of India on actuarial basis. Group Gratuity Fund is managed by the Life Insurance Corporation of India and SBI Life Insurance Co. Ltd.

(b) Leave encashment has been charged to the Revenue Account on the basis of liability ascertained as per the actuarial valuation.

(c) The Company’s contribution to Provident Fund is charged to Revenue Account. ESIC is applicable only to Mumbai Office of the company.

(d) Superannuation Fund: The Company contributes to Superannuation Trust for the Managerial Personnel of the company as per the rules of the Trust.

(8) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(9) Revenue Recognition:

Items of Income and Expenditure are recognised on accrual basis except Insurance Claims, TUFS rebate, export incentives like Duty Drawback, DEPB, Interest Subsidy, which are accounted for on transfer or receipt.

(10) Excise Duty, Cenvat Credit and VAT:

Excise Duty payable on finished goods is accounted for on clearance of goods. 50% of Cenvat Credit on capital goods is accounted for immediately on receipt and the balance is accounted in the next year.

In pursuance to Circular No. 795/28/2004 dated 28.07.2004 the Company (being textile manufacturer) has adopted policy of charging of "Optional" Excise Duty at "NIL" Rate or at 4% Rate as desired by the customer.

VAT credit on raw material (including processing materials, consumable stores and packing materials) and capital goods is accounted on purchase and actual receipt of the same.

(11) Earning Per Share:

The earnings considered in ascertaining the companys E.P.S. comprise the net profit after tax divided by the number of shares.

(12) Taxation:

Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax asset for all timing differences arising between taxable income and accounting income at currently enacted tax rates.

Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

(13) Segment Accounting:

The Company manufactures and deals in single product i.e. Cotton Yarn only and therefore, Accounting Standard 17 on Segment Reporting is not applicable.

(14) Investments:

Long Term Investments are carried at cost. Temporary diminution in value of such investments, if any, is ignored.

(15) Provisions and contingencies:

A provision is recognized when the company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.

(16) Impairment Loss:

Impairment Loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amounts. Recoverable amount is that which is higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net Selling Price is the amount obtainable from sale of the asset on arms length basis between knowledgeable and willing parties less the cost of disposal.