Accounting Policies of Shree Bhavya Fabrics Ltd. Company

Mar 31, 2024

2. Significant Accounting policies

I. Statement of compliance:

These Financial Statements have been prepared in accordance with Indian Accounting Standards
(referred to as “Ind AS”) as prescribed under Section 133 of the Companies Act, 2013 (Act) read with
Companies (Indian Accounting Standards) Rules as amended from time to time. The Financial
Statements have been prepared under historical cost convention basis except for certain financial
assets and financial liabilities which have been measured at fair value. Accounting policies have been
consistently applied except where a newly-issued accounting standard is initially adopted or a revision
to an existing accounting standard requires a change in the accounting policy hitherto in use. The
Company’s presentation and functional currency is Indian Rupees and all values are rounded to the
Lakhs.

II. Basis of preparation and presentation:

These financial statements have been prepared on historical cost basis, except for certain financial
instruments which are measured at fair value or amortised cost at the end of each reporting period,
as explained in the accounting policies below. Historical cost is generally based on the fair value of
the consideration given in exchange for goods and services. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. All assets and liabilities have been classified as current and
non-current as per the Company’s normal operating cycle. Based on the nature of services rendered
to customers and time elapsed between deployment of resources and the realisation in cash and cash
equivalents of the consideration for such services rendered, the Company has considered an
operating cycle of 12 months.

III. Current and non-current classification:

The Company presents assets and liabilities in the balance sheet based on current / non-current
classification. An asset is classified as current when it satisfies any of the following criteria: it is
expected to be realized in, or is intended for sale or consumption in, the Company’s normal
operating cycle.

It is held primarily for the purpose of being traded Non-Current;

• It is expected to be realized within 12 months after the reporting date; or

• It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a

liability for at least 12 months after the reporting date.

• All other assets are classified as non-current.

It is held primarily for the purpose of being traded Current

• A liability is classified as current when it satisfies any of the following criteria:

• It is expected to be settled in the Company’s normal operating cycle;

• It is held primarily for the purpose of being traded

• It is due to be settled within 12 months after the reporting date; or the Company does not

have an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.

• All other liabilities are classified as non-current.

• Deferred tax assets and liabilities are classified as non-current only

• The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

• Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a
change in the accounting policy hitherto in use.

The Standalone Financial Statements have been presented in Indian Rupees (INR), which is the
Company’s functional currency. All financial information presented in INR has been rounded off to
the nearest two decimals, unless otherwise stated.

IV. Use of estimates & Judgments

The preparation of these financial statements in conformity with the recognition and measurement
principles of Ind AS requires management of the Company to make informed judgments, reasonable
assumptions and estimates that affect the amounts reported balances of Assets and Liabilities,
disclosures of contingent Liabilities as at the date of the financial statements and the reported
amounts of income and expense for the periods presented. Uncertainty about these could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected
in the future periods. These assumptions and estimates are reviewed periodically based on the most
recently available information. Revisions to accounting estimates are recognized prospectively in the
Statement of Profit & Loss in the period in which the estimates are revised and in any future
periods affected.

In the assessment of the Company, the most significant effects of use of judgments and/or
estimates on the amounts recognized in the financial statements are in respect of the following:

• Useful lives of property, plant & equipment;

• Valuation of inventories;

• Measurement of recoverable amounts of assets / cash-generating units;

• Assets and obligations relating to employee benefits;

• Evaluation of recoverability of deferred tax assets; and

• Provisions and Contingencies

V. Functional and presentation currency:

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional
currency. All financial information presented in INR has been rounded to the nearest lakhs, except
as stated otherwise.

VI. Significant accounting policies

A. Revenue recognition

Revenue from contract with customers Revenue from contracts with customers is recognized
upon transfer of control of promised goods/ products to customers at an amount that reflects
the consideration to which the Company expect to be entitled for those goods/ products. To
recognize revenues, the Company applies the following five-step approach:

• Identify the contract with a customer,

• Identify the performance obligations in the contract,

• Determine the transaction price,

• Allocate the transaction price to the performance obligations in the contract, and

• Recognize revenues when a performance obligation is satisfied.

1. Sale of goods

Revenue from the sale of goods is recognized when the significant risks and rewards of
ownership of the goods have passed to the buyer and no significant uncertainty exists
regarding the amount of the consideration that will be derived from the sale of goods.
Revenue from the sale of goods is measured at the fair value of the consideration received
or receivable, net of returns and allowances, related discounts & incentives and volume
rebates. It includes excise duty and excludes value added tax/ sales tax/goods and
service tax.

2. Sale of goods - non-cash incentive schemes (deferred revenue)

The company operates a non-cash incentive scheme program where dealers / agents are
entitled to non-cash incentives on achievement of sales targets. Revenue related to the non¬
cash schemes is deferred and recognized when the targets are achieved. The amount of
revenue is based on the realization of the sales targets to the period of scheme defined.

3. Interest income

For all financial instruments measured either at amortized cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR),
which is the rate that exactly discounts the estimated future cash payments or receipts
over the expected life of the financial instrument or a shorter period, where appropriate, to
the gross carrying amount of the financial asset or to the amortized cost of a financial
liability. Interest income is included in other income in the statement of profit and loss.

4. Dividends

Dividend income is accounted for when the right to receive the same is established, which is
generally when shareholders approve the dividend.

B. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized as part of the cost of the asset. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use or sale. All other borrowing costs
are expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that a company incurs in connection with the borrowing of funds.

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying asset is deducted from the borrowing costs eligible for
capitalization.

C. Export Benefits

Duty free imports of raw materials under advance license for imports, as per the Foreign Trade
Policy, are matched with the exports made against the said licenses and the net benefits /
obligations are accounted by making suitable adjustments in raw material consumption.

D. Taxes

1. Current income tax

Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on the rates and tax laws enacted
or substantively enacted, at the reporting date in the country where the entity operates
and generates taxable income.

Current tax items are recognized in correlation to the underlying transaction either in OCI
or directly in equity.

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

2. Deferred tax

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

Deferred tax assets are the amounts of income taxes recoverable in future periods in
respect of:

i. deductible temporary differences;

ii. the carry forward of unused tax losses; and

iii. the carry forward of unused tax credits.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets
are re-assessed at each reporting date and are recognized to the extent that it has become
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realized or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is (either in other
comprehensive income or in equity). Deferred tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists
to set off current tax assets against current tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation authority.

Minimum Alternative Tax (MAT) credit is recognized 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 recognized
an asset in accordance with recommendations contained in Guidance Note issued by ICAI,
the said asset is created by way of a credit to the Statement of Profit and Loss and shown
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 an extent there is no
longer convincing evidence to the effect that the company will pay normal Income Tax
during the specified period.

E. Leases

Company as a lessee

The Company applies a single recognition and measurement approach for all leases,
except for short term leases and leases of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets representing the right to use the
underlying assets.

1) Right-of-use assets

• The Company recognizes right-of-use assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use).

• Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any Remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right of- use assets are depreciated on a straight-line basis over the
shorter of the lease term and the estimated useful lives of the assets, as follows:

• Leasehold buildings 8 to 10 years

• Leasehold Land 75 to 80 years

If ownership of the leased asset transfers to the Company at the end of the lease term or the
cost reflects the exercise of a purchase option, depreciation is calculated using the estimated
useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the
accounting policies in section (p) Impairment of non-financial assets.

2) Lease Liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at
the present value of lease payments to be made over the lease term. The lease payments include
fixed payments less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Company and payments of penalties for terminating the lease, if the lease
term reflects the Company exercising the option to terminate. Variable lease payments that do

not depend on an index or a rate are recognized as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition that triggers the payment
occurs. In calculating the present value of lease payments, the Company uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in the lease
is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the lease payments.

3) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of
machinery and equipment (i.e., those leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option). It also applies the lease of low-
value assets recognition exemption to leases of office equipment that are considered to be low
value.

Lease payments on short-term leases and leases of low-value assets are recognized as expense
on a straight-line basis over the lease term.

F. Employee Benefits

All employee benefits payable wholly within twelve months of rendering services are classified as
short term employee benefits. Benefits such as salaries, wages, short-term compensated
absences, performance incentives etc., and the expected cost of bonus, ex-gratia are
recognized during the period in which the employee renders related service.

Payments to defined contribution retirement benefit plans are recognized as an expense when
employees have rendered the service entitling them to the contribution.

No benefit has been provided by the Company under the defined benefits plan. Thus no re
measurement comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan
assets (excluding amounts included in net interest on the net defined benefit liability), are
recognized in the balance sheet with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur.

No net defined benefit obligation as an expense has been recognized in the statement of profit
and loss:

1. Long-term employee benefits

Post-employment and other employee benefits are recognized as an expense in the statement
of profit and loss for the period in which the employee has rendered services. A liability is
recognized for benefits accruing to employees in respect of wages and salaries, annual
leave and sick leave in the period the related service is rendered at the undiscounted
amount of the benefits expected to be paid in exchange for that service.

2. Defined contribution plans

The company pays provident fund contributions to publicly administered provident funds
as per local regulations. The company has no further payment obligations once the
contributions have been paid.

G. Property, plant and equipment

Freehold land is carried at historical cost. All other items of property, plant and equipment are
stated at acquisition cost of the items. Acquisition cost includes expenditure that is directly
attributable to getting the asset ready for intended use. Subsequent costs are included in the
asset’s carrying amount or recognized 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 derecognized when replaced. All other repairs and
maintenance are charged to profit or loss during the reporting period in which they are
incurred.

An item of spare parts that meets the definition of ‘property, plant and equipment’ is recognized as
property, plant and equipment. The depreciation on such an item of spare part will begin when
the asset is available for use i.e. when it is in the location and condition necessary for it to be
capable of operating in the manner intended by management. In case of a spare part, as it may
be readily available for use, it may be depreciated from the date of purchase of the spare
part.

Capital work in progress is stated at cost and net of accumulated impairment losses, if any.
All the direct expenditure related to implementation including incidental expenditure incurred
during the period of implementation of a project, till it is commissioned, is accounted as
Capital work in progress (CWIP) and after commissioning the same is transferred / allocated
Pre-operating costs, being indirect in nature, are expensed to the statement of profit and loss as
and whenincurred.

The present value of the expected cost for the decommissioning of an asset after its use is
included in the cost of the respective asset if the recognition criteria for a provision are met.

Property, plant and equipment are eliminated from financial statement, either on disposal or
when retired from active use. Losses arising in the case of retirement of property, plant and
equipment are recognized in the statement of profit and loss in the year of occurrence.

Depreciation methods, estimated useful lives and residual value

Depreciation is calculated to allocate the cost of assets, net of their residual values, over their
estimated useful lives. Components having value significant to the total cost of the asset and
life different from that of the main asset are depreciated over its useful life. However, land is
not depreciated. The useful lives so determined are as follows:

Depreciation on fixed assets has been provided in the accounts based on useful life of the assets
prescribed in Schedule II to the companies Act, 2013 based on Straight Line Method/Written
Down Method.

Depreciation on additions is calculated on pro rata basis with reference to the date of addition.

Depreciation on assets sold/ discarded, during the period, has been provided up to the
preceding month of sale / discarded.

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

Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in profit or loss within other gains / (losses).

H. Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is
not occupied by the company, is classified as investment property. Investment property is
measured initially at its cost, including related transaction costs and where applicable
borrowing costs. Subsequent expenditure is capitalized to the asset’s carrying amount only
when it is probable that future economic benefits associated with the expenditure will flow to
the company and the cost of the item can be measure reliably. All other repairs and
maintenance costs are expensed when incurred. When part of an investment property is
replaced, the carrying amount of the replaced part is derecognized.

There are no Investment Properties in name of Company.

I. Intangibles

Intangible assets are recognized when it is probable that the future economic benefits that are
attributable to the assets will flow to the company and the cost of the asset can be
measured reliably.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortization and accumulated impairment losses. Internally generated
intangibles, excluding capitalized development costs, are not capitalized and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

J. Inventories

Inventories are valued at the lower of cost and net realizable value.

1. Raw materials: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition.

2. Finished goods and work in progress: cost includes cost of direct materials and labour

and a proportion of manufacturing overheads based on the normal operating capacity, but
excluding borrowing costs. Cost is determined on lower of cost or net realizable value.

3. Stores and spares: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on first in, first out
basis. An item of spare parts that does not meet the definition of ‘property, plant and
equipment’ has to be recognized as a part of inventories.

4. Fuel: cost includes cost of purchase and other cost incurred in bringing the inventories to
their present location and condition.

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

K. Investment in subsidiaries, joint ventures and associates

Investments in subsidiaries, joint ventures and associates are recognized at cost as per Ind AS 27.
Except where investments accounted for at cost shall be accounted for in accordance with Ind AS
105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified
as held for sale.

There are no Investment in Subsidiaries, Joint Ventures and Associates as defined as per
INDAS 27.

L. Financial Instruments
• Financial assets

i. Initial recognition and measurement

All financial assets are recognized initially at fair value plus, in the case of financial
assets not recorded at fair value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets are classified, at initial recognition, as financial assets measured at
fair value or as financial assets measured at amortized cost.

ii. Subsequent measurement

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

a. Debt instruments at amortized cost

b. Debt instruments at fair value through other comprehensive income (FVTOCI)

c. Financial assets at fair value through profit or loss (FVTPL)

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

iii. Debt instruments at amortized cost

A ‘debt instrument’ is measured at the amortized cost if both the following conditions
are met:

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

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

After initial measurement, such financial assets are subsequently measured at
amortized cost using the effective interest rate (EIR) method. Amortized cost is
calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortization is included in finance
income in the profit or loss. The losses arising from impairment are recognized in the
profit or loss. This category generally applies to trade and other receivables.

iv. Debt instrument at FVTOCI

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

a. The objective of the business model is achieved both by collecting contractual cash
flows and selling the financial assets, and

b. The asset’s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well
as at each reporting date at fair value. Fair value movements are recognized in the
other comprehensive income (OCI).

v. Financial instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not
meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at
FVTPL.

In addition, the company may elect to designate a debt instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if
doing so reduces or eliminates a measurement or recognition inconsistency (referred to as
‘accounting mismatch’). The company has not designated any debt instrument as at
FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all
changes recognized in the P&L.

vi. Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading and contingent consideration recognized by an
acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL.
For all other equity instruments, the company may make an irrevocable election to present
in other comprehensive income subsequent changes in the fair value. The company makes
such election on an instrument by-instrument basis. The classification is made on initial
recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends, are recognized in the OCI. There is no
recycling of the amounts from OCI to P&L, even on sale of investment. However, the
company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all
changes recognized in the P&L.

vii. Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a company of
similar financial assets) is primarily derecognized (i.e. removed from the company’s
balance sheet) when:

a. The rights to receive cash flows from the asset have expired, or

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

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

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

When the company has transferred its rights to receive cash flows from an asset or has
entered into a pass-through arrangement, it evaluates if and to what extent it has retained
the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards ofthe asset, nor transferred control of the asset,
the company continues to recognize the transferred asset to the extent of the company’s
continuing involvement. In that case, the company also recognizes an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the
rights and obligations that the company has retained.

viii. Impairment of financial assets

The company assesses impairment based on expected credit loss (ECL) model to the
following:

a. Financial assets measured at amortized cost;

b. Financial assets measured at fair value through other comprehensive income
(FVTOCI); Expected credit losses are measured through a loss allowance at an
amount equal to:

a. The 12-months expected credit losses (expected credit losses that result from those
default events on the financial instrument that are possible within 12 months after
the reporting date); or

b. Full time expected credit losses (expected credit losses that result from all possible
default events over the life of the financial instrument).

The company follows ‘simplified approach’ for recognition of impairment loss allowance on:

a. Trade receivables or contract revenue receivables; and

Under the simplified approach, the company does not track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.

The company uses a provision matrix to determine impairment loss allowance on the
portfolio of trade receivables. The provision matrix is based on its historically observed
default rates over the expected life of the trade receivable and is adjusted for forward
looking estimates. At every reporting date, the historical observed default rates are updated
and changes in the forward-looking estimates are analyzed.

For recognition of impairment loss on other financial assets and risk exposure, the company
determines that whether there has been a significant increase in the credit risk since
initial recognition. If credit risk has not increased significantly, 12-month ECL is used to
provide for impairment loss. However, ifcredit risk has increased significantly, lifetime ECL
is used. If, in a subsequent period, credit quality of the instrument improves such that
there is no longer a significant increase in credit risk since initial recognition, then the
entity reverts to recognizing impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL
which results from default events that are possible within 12 months after the reporting
date.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as
income/ expense in the statement of profit and loss (P&L). This amount is reflected under
the head ‘other expenses’ in the P&L.

ix. Financial assets measured as at amortized cost, contractual revenue receivables
and lease receivables

ECL is presented as an allowance, i.e., as an integral part of the measurement of those
assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset
meets write-off criteria, the company does not reduce impairment allowance from the
gross carrying amount.

For assessing increase in credit risk and impairment loss, the company combines financial
instruments on the basis of shared credit risk characteristics with the objective of
facilitating an analysis that is designed to enable significant increases in credit risk to be
identified on a timely basis.

The company does not have any purchased or originated credit-impaired (POCI) financial
assets, i.e., financial assets which are credit impaired on purchase/ origination.

• Financial liabilities

i. Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable transaction costs.

The company’s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts.

ii. Subsequent measurement

The measurement of financial liabilities depends on their classification, as described
below:

Financial liabilities at fair value through profit or loss

a. Loans and borrowings

b. Financial guarantee contracts

c. Financial guarantee contracts

iii. Financial liabilities at FVTPL

Financial liabilities at fair value through profit or loss include financial liabilities
held for trading and financial liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit
or loss are designated as such at the initial date of recognition, and only if the
criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value
gains/ losses attributable to changes in own credit risk is recognized in OCI. These
gains/ loss are not subsequently transferred to P&L. However, the company may
transfer the cumulative gain or loss within equity. All other changes in fair value of
such liability are recognized in the statement of profit and loss. The company has
not designated any financial liability as at fair value through profit and loss.

iv. Loans and borrowings

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

v. De recognition

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

• Off-setting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the
standalone balance sheet if there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, to realize the assets
and settle the liabilities simultaneously.

M. Impairment of non-financial assets

The company assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the
company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of
an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or company’s assets. When the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

Recoverable amount is determined:

i. In case of individual asset, at higher of the fair value less cost to sell and value in use; and

ii. In case of cash-generating unit (a company of assets that generates identified, independent
cash flows), at the higher of the cash-generating unit’s fair value less cost to sell and the
value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value indicators.

The company bases its impairment calculation on detailed budgets and forecast calculations, which
are prepared separately for each of the company’s CGUs to which the individual assets are allocated.
These budgets and forecast calculations generally cover a period of five years. For longer periods, a
long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognized in
the statement of profit and loss, except for properties previously revalued with the revaluation
surplus taken to OCI. For such properties, the impairment is recognized in OCI up to the amount
of any previous revaluation surplus.

N. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk
of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the company’s cash management.

O. Segment accounting

The Chief Operational Decision Maker monitors the operating results of its business Segments
separately for the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on profit or loss and is measured
consistently with profit or loss in the financial statements.

The Operating segments have been identified on the basis of the nature of products/services.

The accounting policies adopted for segment reporting are in line with the accounting policies of the
company. Segment revenue, segment expenses, segment assets and segment liabilities have been
identified to segments on the basis of their relationship to the operating activities of the segment.
Inter Segment revenue is accounted on the basis of transactions which are primarily determined based
on market/fair value factors. Revenue, expenses, assets and liabilities which relate to the company as
a whole and are not allocated to segments on a reasonable basis have been included under
“unallocated revenue / expenses / assets / liabilities”.

The Company is primarily engaged in the business of manufacturing, distribution and marketing of
textile product.These, in the context of Ind AS 108 on Operating Segments Reporting are considered
to constitute single business segment.

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Mar 31, 2015

Accounting Convention

The financial statement are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 2013.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in witch results are known/materialized.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of all expenses incurred to bring the assets to its present location and condition. Borrowing cost directly attributable to the acquisition /construction are included in the cost of fixed assets. Adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

In case of new projects / expansion of existing projects, expenditure incurred during construction / preoperative period including interest and finance charge on specific / general purpose loans, prior to commencement of commercial production are capitalized. The same are allocated to the respective fixed assets on completion of construction / erection of the capital project / fixed assets.

Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."

Impairment of Assets

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the assets.

Depreciation

All fixed assets, except capital work in progress, are depreciated on a written down value method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on additions to / deletions from fixed assets made during the period is provided on pro-rata basis from / up to the date of such addition / deletion as the case may be.

Investments

Long term investments are stated at cost. Current investments are stated at lower of cost and market price. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

Inventories

Inventories are measured at lower of cost and net realizable value. Cost of raw materials, stores & spares parts are ascertained on FIFO basis. Cost of finished goods and process stock is ascertained on full absorption cost basis. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing in them to their present location & condition.

Revenue Recognition

Sales are recognized when goods are supplied. Sales are net of trade discounts, rebates and vat. It does not include interdivisional sales.

Revenue in respect of other items is recognized when no significant uncertainty as to its determination or realization exists.

Borrowing Cost

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

Employee Benefits

Short - term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the profit & loss account for the year in which the liabilities are crystallized

Taxes on Income

Income tax expenses for the year comprises of current tax and deferred tax. Current tax provision is determined on the basis of taxable income computed as per the provisions of the Income Tax Act. Deferred tax is recognized for all timing differences that are capable of reversal in one or more subsequent periods subject to conditions of prudence and by applying tax rates that have been substantively enacted by the balance sheet date.

Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2014

Accounting Convention

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions 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 results and estimates are recognized in the period in which results are known / materialized.

Fixed Assets

The Gross Block of Fixed Assets are shown at the cost which indudes taxes, duties (Net of Cenvat) and other identifiable direct expenses and interest on borrowings attributable to acquisition of Fixed Assets upto the date of Commissioning of the assets.

In case of new projects / expansion of existing projects, expenditure incurred during construction / preoperative period including interest and finance charges on specific / general purpose loans, prior to commencement of commercial production are capitalized. The same has been allocated to the respective Fixed assets on completion of construction / erection of the capital project / fixed assets.

Capital assets (induding expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."

Impairment of Assets

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

Depreciation

The company has provided depreciation on fixed assets by written Down valued at the rates specified in schedule XIV of The Companies Act, 1956. However depredation is taken for the whole month in which assets is installed.

Depredation on additions to / deletions from fixed assets made during the period is provided on pro-rata basis from / up to the month of such addition / deletion as the case may be.

Investments

Long term investments are stated at cost. Current investments are stated at lower of cost and market price. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

Inventories

1) Grey Cloth, Colour & chemical, packing material are valued at cost.

2) Semi finish goods are valued at estimated cost as per ''Full absorption basis'' in accordance with the revised Accounting Standard - 2.

3) Finished goods are valued at cost or net realizable value, whichever is less.

Due consideration is given to the saleability of the stock and no obsolete or unserviceable/ damaged items included therein except at their net realizable value.

Revenue Recognition

Sales are recognized when goods are supplied. Sales are net of trade discounts, rebates and vat. It does not include interdivisional sales.

Revenue in respect of other item is recognized when no significant uncertainty as to its determination or realization exists.

Borrowing Cost

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

Employee Benefits

Short -term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services.

Taxes on Income

income tax expenses for the year comprises of current tax and deferred tax. Current tax provision is determined on the basis of taxable income computed as per the provisions of the Income Tax Act. Deferred tax is recognized for all timing differences that are capable of reversal in one or more subsequent periods subject to conditions of prudence and by applying tax rates that have been substantively enacted by the balance sheet date.

Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

Accounting Convention

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions 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 results and estimates are recognized in the period in which results are known / materialized.

Fixed Assets

The Gross Block of Fixed Assets are shown at the cost which includes taxes, duties (Net of Cenvat) and other identifiable direct expenses and interest on borrowings attributable to acquisition of Fixed Assets upto the date of Commissioning of the assets.

In case of new projects / expansion of existing projects, expenditure incurred during construction / preoperative period including interest and finance charges on specific / general purpose loans, prior to commencement of commercial production are capitalized. The same has been allocated to the respective fixed assets on completion of construction / erection of the capital project / fixed assets.

Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."

Impairment of Assets

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to , determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

Depreciation

The company has provided depreciation on fixed assets by written Down valued at the rates specified in schedule XIV of The Companies Act, 1956. However depreciation is taken for the whole month in which assets is installed.

Depreciation on additions to / deletions from fixed assets made during the period is provided on pro- rata basis from / up to the month of such addition / deletion as the case may be.

Investments

Long term investments are stated at cost. Current investments are stated at lower of cost and market price. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

Inventories

1) Grey Cloth, Colour & chemical, packing material are valued at cost.

2) Semi finish goods are valued at estimated cost as per "Full absorption basis in accordance with the revised Accounting Standard - 2.

3) Finished goods are valued at cost or net realizable value, whichever is less.

Due consideration is given to the saleability of the stock and no obsolete or unserviceable /damaged items included therein except at their net realizable value.

Revenue Recognition

Sales are recognized when goods are supplied. Sales are net of trade discounts, rebates and vat. It does not include interdivisional sales.

Revenue in respect of other item is recognized when no significant uncertainty as to its determination or realization exists.

Borrowing Cost

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

Employee Benefits

Short -term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services.

Taxes on Income

Income tax expenses for the year comprises of current tax and deferred tax. Current tax provision is determined on the basis of taxable income computed as per the provisions of the Income Tax Act. Deferred tax is recognized for all timing differences that are capable of reversal in one or more subsequent periods subject to conditions of prudence and by applying tax rates that have been substantively enacted by the balance sheet date. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2009

Accounting Convention

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions 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 results and estimates are recognized in the period in which results are known / materialized.

Fixed Assets

The Gross Block of Fixed Assets are shown at the cost which includes taxes, duties (Net of Cenvat) and other identifiable direct expenses and interest on borrowings attributable to acquisition of Fixed Assets upto the date of Commissioning of the assets.

In case of new projects / expansion of existing projects, expenditure incurred during construction / preoperative period including interest and finance charges on specific / general purpose loans, prior to commencement of commercial production are capitalized. The same has been allocated to the respective fixed assets on completion of construction / erection of the capital project / fixed assets.

Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."

Impairment of Assets

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Depreciation

The company has provided depreciation on fixed assets by written Down valued at the rates specified in schedule XIV of The Companies Act, 1956. However depreciation is taken for the whole month in which assets is installed.

Depreciation on additions to / deletions from fixed assets made during the period is provided on pro- rata basis from / up to the month of such addition / deletion as the case may be.

Investments

Long term investments are stated at cost. Current investments are stated at lower of cost and market price. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

Inventories

1) Grey Cloth, Colour & chemical, packing material are valued at cost.

2) Semi finish goods are valued at estimated cost as per "Full absorption basis in accordance with the revised Accounting Standard - 2.

3) Finished goods are valued at cost or net realizable value, whichever is less.

Due consideration is given to the saleability of the stock and no obsolete or unserviceable /damaged items included therein except at their net realizable value.

Revenue Recognition

Sales are recognized when goods are supplied. Sales are net of trade discounts, rebates and vat. It does not include interdivisional sales.

Revenue in respect of other item is recognized when no significant uncertainty as to its determination or realization exists.

Borrowing Cost

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

Employee Benefits

Short -term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services.

Taxes on Income

Income tax expenses for the year comprises of current tax and deferred tax. Current tax provision is determined on the basis of taxable income computed as per the provisions of the Income Tax Act.

Deferred tax is recognized for all timing differences that are capable of reversal in one or more subsequent periods subject to conditions of prudence and by applying tax rates that have been substantively enacted by the balance sheet date.

Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the notes.

Contingent assets are neither recognized nor disclosed in the financial statements.