Accounting Policies of Shree Rajasthan Syntex Ltd. Company

Mar 31, 2025

2.1 Summary of significant accounting policies

a. Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable. The amount
disclosed as revenue is inclusive of excise duty and net of returns, discounts and exclusive of Goods
and Services Tax.

The company recognizes revenue when the amount of revenue can be measured reliably and it is
probable that the economic benefits associated with the transaction will flow to the entity.

(i) Sales of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of
the goods are transferred to the buyer and the entity retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods
sold.

The performance obligation in case of sales of goods is satisfied at a point in time i.e., Revenue from
export sales is recognized on the basis of bill of landing while Domestic sales is recognized on the
basis of ex-factory dispatch as may be specified in the contract.

(ii) Rendering of Services

Revenue from rendering of services is recognized over time by measuring the progress towards
complete satisfaction of performance obligations at the reporting period.

Revenue is measured at the amount of consideration which the company expects to be entitled to in
exchange for transferring distinct goods or services to a customer as specified in the contract,
excluding amounts collected on behalf of third parties (for example taxes and duties collected on
behalf of the government). Consideration is generally due upon satisfaction of performance
obligations and a receivable is recognized when it becomes unconditional.

In case of discounts, rebates, credits, price incentives or similar terms, consideration are determined
based on its most likely amount, which is assessed at each reporting period.

b. Employee benefits

(i) Short term Employee Benefits

Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the
statement of profit and loss of the year in which the related service is rendered.

(ii) Post Employment Benefits

(a) Defined Contribution Plans
Provident Fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has
no obligation, other than the contribution payable to the provident fund. The Company recognizes
contribution payable to the provident fund scheme as an expense, when an employee renders the
related service.

(b) Defined benefit plans
Gratuity

The Company''s gratuity scheme is a defined benefit plan. The present value of the obligation under
such defined benefit plan is determined based on actuarial valuation carried at the year end using
the Projected Unit Credit Method, which recognises each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately to build up the final
obligation. The obligation is measured at the present value of the estimated future cash flows.
Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Remeasurements, 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 recognised
immediately in the balance sheet with a corresponding debit or credit to retained earnings through
OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in
subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

(a) The date of the plan amendment or curtailment, and
(b) The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
Compensated absences

Benefits under the Company''s leave encashment constitute other employee benefits. The liability in
respect of leave encashment is provided on the basis of an actuarial valuation done by an
independent actuary at the year-end using the Projected Unit Credit Method. Actuarial gains and
losses are recognised immediately in the Statement of Profit and Loss.

c. Property, plant and equipment

Property, plant and equipment are carried at cost of acquisition less accumulated depreciation. The
cost of an item of Property, plant and equipment comprises its purchase price, including import
duties and others non-refundable taxes or levies and any directly attributable cost of bringing the
asset to its working condition for its intended use; any trade discounts and rebates are deducted in
arriving at the purchase price.

All costs including financing costs till commencement of commercial production and adjustment
arising from exchange rate variations relating to borrowings attributable to the Property, plant and
equipment are capitalized.

Property, plant and equipment under construction are disclosed as capital work in progress.
Recognition:

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:

(a) it is probable that future economic benefits associated with the item will flow to the entity; and

(b) the cost of the item can be measured reliably.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its
property, plant and equipment recognised as at 1 April 2016 measured as per the previous GAAP
and use that carrying value as the deemed cost of the property, plant and equipment.

Gains or losses arising from de-recognition of assets are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit
and loss when the asset is derecognized.

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.

d. Intangible assets

Intangible asset represents computer software acquired by the Company carried at cost of
acquisition less amortisation. The cost of an item of intangible asset comprises its purchase price,
including import duties and other non-refundable taxes or levies and any directly attributable cost of
bringing the asset to its working condition for its intended use; any trade discounts and rebates are
deducted in arriving at the purchase price.

The amortization period and the amortization method are reviewed at least at each financial year
end. If the expected useful life of the asset is significantly different from previous estimates, the
amortization period is changed accordingly. If there has been a significant change in the expected
pattern of economic benefits from the asset, the amortization method is changed to reflect the
changed pattern. Such changes are treated as changes in accounting estimates. The amortization

expense on intangible assets with finite lives is recognised in the statement of profit and loss, unless
such expenditure forms part of the carrying value of another asset.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its
Intangibles recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying
value as the deemed cost of the Intangibles.

e. Depreciation and amortisation expenses

Depreciation on Property, plant and equipment is provided on the straight-line method, as per useful
life prescribed in Schedule II to the Companies Act, 2013. Further for amortisation of intangible
assets useful life is 3 years to 5 years.

Pursuant to Companies Act, 2013 (''the Act'') being effective from 1 April 2014, the Company has
aligned the depreciation rates based on the useful lives as specified in Part ''C'' of Schedule II to the
Act.

Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

The company provides for depreciation on following plant & machinery considering the same as
continuous process plant.

(i) Filament Yarn Division and Spun Yarn Division
Freehold land and leasehold land are not depreciated.

Depreciation on additions is provided on a pro-rata basis from the date of acquisition/installation.
Depreciation on sale/deduction from fixed assets is provided for upto the date of sale/adjustment, as
the case may be.

f. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost of inventories includes all
costs incurred in bringing the inventories to their present location and condition. Cost of inventories
has been determined as under:

Raw Material At Batch cost

Work in progress a) Preparatory stage - at cost

b) Yarn stage - at cost or net realisable value, whichever is lower
Finished Goods At cost or net realizable value whichever is lower.

Traded stock At Cost of purchase or net realizable value whichever is lower.

Stores and Spares At First In First Out method.

Waste and scrap At Net realisable value

Fuel Monthly moving weighted average

g. Borrowing costs

Borrowing costs that are attributable to the acquisition 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 intended use. All other borrowing costs are charged to revenue.

h. Leases

Effective April 1, 2019, the Company adopted Ind AS 116 "Leases” and applied the standard to all
lease contracts existing on April 1, 2019 using the modified retrospective method on the date of
initial application. Consequently, the Company recorded the lease liability at the present value of the
lease payments discounted at the incremental borrowing rate and the right of use asset at its
carrying amount.

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company
assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the economic benefits from use of the asset through
the period of the lease and (iii) the Company has the right to direct the use of the asset.

The Company recognizes a right-of-use asset ("ROU”) and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short-term and low value leases, the Company
recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset.

i. Income taxes

Income tax expense represents the sum of current and deferred tax (including MAT). Current
income-tax is measured at the amount expected to be paid to the tax authorities in accordance with
the Income-tax Act, 1961 enacted in India.

Deferred tax is recognised on 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 and are
accounted for using the Balance Sheet approach. Deferred tax liabilities are generally recognised for
all taxable temporary differences, and deferred tax assets are generally recognized for all deductible
temporary differences, carry forward tax losses and allowances to the extent that it is probable that
future taxable profits will be available against which those deductible temporary differences, carry
forward tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at
the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set and presented as
net.

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 against which
the temporary differences can be utilised.

Credit of 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, i.e., the period for which MAT
credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be
recognized as an asset, the said asset is created by way of a credit to the profit and loss account 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 the extent there is no longer
convincing evidence to the effect that the Company will pay normal income tax during the specified
period.

j. Earnings per share

Basic earnings per equity share is computed by dividing the net profit attributable to the equity
holders of the company by the weighted average number of equity shares outstanding during the
period.

Diluted earnings per equity share is computed by dividing the net profit attributable to the equity
holders of the company by the weighted average number of equity shares considered for deriving
basic earnings per equity share and also the weighted average number of equity shares that could
have been issued upon conversion of all dilutive potential equity shares. The dilutive potential
equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at
fair value.

k. Foreign Currency Transactions

The functional currency of the company is Indian rupee. These financial statements are presented in
Indian rupee.

In preparing the financial statements, transaction in foreign currencies are recognised at the rates of
exchange prevailing at the dates of the transactions. Exchange differences arising on foreign
exchange transactions settled during the period are recognised in the Statement of profit & loss of
the period.

The foreign currency monetary items are translated using the closing rate at the end of each
reporting period. Non-monetary items that are measured in terms of historical cost in a foreign
currency is translated using the exchange rate at the date of the transaction. Exchange differences
arising on the settlement of monetary items or on translating monetary items at rates different from
those at which they were translated on initial recognition during the period or in previous financial
statements is recognised in profit or loss in the period in which they arise. All other foreign exchange
gains and losses are presented in the statement of profit and loss on net basis.

l. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

(i) Initial Recognition and measurement

On initial recognition, all the financial assets and liabilities are recognized at its fair value plus or
minus transaction costs that are directly attributable to the acquisition or issue of the financial asset
or financial liability except financial asset or financial liability measured at fair value through profit
or loss. Transaction costs of financial assets and liabilities carried at fair value through the Profit and
Loss are immediately recognized in the Statement of Profit and Loss.

(ii) Subsequent measurement
Financial assets carried at amortised cost

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

Financial assets at fair value through other comprehensive income (FVTOCI)

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

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

A financial asset is measured at fair value through profit and loss unless it is measured at amortized
cost or at fair value through other comprehensive income.

Financial liabilities

The financial liabilities are subsequently carried at amortized cost using the effective interest
method. For trade and other payables maturing within one year from the balance sheet date, the
carrying amounts approximate fair value due to the short maturity of these instruments.

m. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short¬
term deposits with a maturity period of three months or less from the balance sheet date, which are
subject to an insignificant risk of changes in value.

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Mar 31, 2024

2.1 Summary of significant accounting policies

a. Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable. The amount disclosed as revenue is inclusive of excise duty and net of returns, discounts and exclusive of Goods and Services Tax.

The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

(i) Sales of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the buyer and the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

The performance obligation in case of sales of goods is satisfied at a point in time i.e., Revenue from export sales is recognized on the basis of bill of landing while Domestic sales is recognized on the basis of ex-factory dispatch as may be specified in the contract.

(ii) Rendering of Services

Revenue from rendering of services is recognized over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.

Revenue is measured at the amount of consideration which the company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognized when it becomes unconditional.

In case of discounts, rebates, credits, price incentives or similar terms, consideration are determined based on its most likely amount, which is assessed at each reporting period.

b. Employee benefits

(i) Short term Employee Benefits

Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

(ii) Post Employment Benefits

(a) Defined Contribution Plans Provident Fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

(b) Defined benefit plans Gratuity

The Company''s gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried at the year end using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Remeasurements, 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 recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

(a) The date of the plan amendment or curtailment, and

(b) The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Compensated absences

Benefits under the Company''s leave encashment constitute other employee benefits. The liability in respect of leave encashment is provided on the basis of an actuarial valuation done by an independent actuary at the year-end using the Projected Unit Credit Method. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

c. Property, plant and equipment

Property, plant and equipment are carried at cost of acquisition less accumulated depreciation. The cost of an item of Property, plant and equipment comprises its purchase price, including import duties and others non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Cotton Yarn Unit (Polycot Yarn Division) is stated at cost without availing CENVAT, and Thermal Power Plant is stated without availing Service CENVAT. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the Property, plant and equipment are capitalized.

Property, plant and equipment under construction are disclosed as capital work in progress.

Recognition:

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:

(a) it is probable that future economic benefits associated with the item will flow to the entity; and

(b) the cost of the item can be measured reliably.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Gains or losses arising from de-recognition of assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit and loss when the asset is derecognized.

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.

d. Intangible assets

Intangible asset represents computer software acquired by the Company carried at cost of acquisition less amortisation. The cost of an item of intangible asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognised in the statement of profit and loss, unless such expenditure forms part of the carrying value of another asset.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangibles recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the Intangibles.

e. Depreciation and amortisation expenses

Depreciation on Property, plant and equipment is provided on the straight-line method, as per useful life prescribed in Schedule II to the Companies Act, 2013. Further for amortisation of intangible assets useful life is 3 years to 5 years.

Pursuant to Companies Act, 2013 (''the Act'') being effective from 1 April 2014, the Company has aligned the depreciation rates based on the useful lives as specified in Part ''C'' of Schedule II to the Act.

Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division, Spun Yarn Division and Cotton Yarn Division

(ii) Power Generation Equipments

Freehold land and leasehold land are not depreciated.

Depreciation on additions is provided on a pro-rata basis from the date of acquisition/installation. Depreciation on sale/deduction from fixed assets is provided for upto the date of sale/adjustment, as the case may be.

f. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost of inventories includes all costs incurred in bringing the inventories to their present location and condition. Cost of inventories has been determined as under:

Raw Material At Batch cost

Work in progress a) Preparatory stage - at cost

b) Yarn stage - at cost or net realisable value, whichever is lower Finished Goods At cost or net realizable value whichever is lower.

Traded stock At Cost of purchase or net realizable value whichever is lower.

Stores and Spares At First In First Out method.

Waste and scrap At Net realisable value

Fuel Monthly moving weighted average

g. Borrowing costs

Borrowing costs that are attributable to the acquisition 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 intended use. All other borrowing costs are charged to revenue.

h. Leases

Effective April 1, 2019, the Company adopted Ind AS 116 "Leases” and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method on the date of initial application. Consequently, the Company recorded the lease liability at the present value of the lease

payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount.

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

The Company recognizes a right-of-use asset ("ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

i. Income taxes

Income tax expense represents the sum of current and deferred tax (including MAT). Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India.

Deferred tax is recognised on 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 and are accounted for using the Balance Sheet approach. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set and presented as net.

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 against which the temporary differences can be utilised.

Credit of 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, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account 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 the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

j. Earnings per share

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value.

k. Foreign Currency Transactions

The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupee.

In preparing the financial statements, transaction in foreign currencies are recognised at the rates of exchange prevailing at the dates of the transactions. Exchange differences arising on foreign exchange transactions settled during the period are recognised in the Statement of profit & loss of the period.

The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency is translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements is recognised in profit or loss in the period in which they arise. All other foreign exchange gains and losses are presented in the statement of profit and loss on net basis.

l. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Initial Recognition and measurement

On initial recognition, all the financial assets and liabilities are recognized at its fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability except financial asset or financial liability measured at fair value through profit or loss. Transaction costs of financial assets and liabilities carried at fair value through the Profit and Loss are immediately recognized in the Statement of Profit and Loss.

(ii) Subsequent measurement Financial assets carried at amortised cost

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

Financial assets at fair value through other comprehensive income (FVTOCI)

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

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

A financial asset is measured at fair value through profit and loss unless it is measured at amortized cost or at fair value through other comprehensive income.

Financial liabilities

The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

m. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.

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Mar 31, 2015

I) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated at cost, net of Cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. Stores and spares received along with the Plant & Machinery are being capitalised with related machine.

b) Cotton Yarn unit and Wartsila Power Plant are stated at cost without availing CENVAT, and thermal power plant is stated without availing service cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalized.

c) Depreciation on fixed assets is provided on straight line method as per useful life prescribed in Schedule II to the Companies Act, 2013. Depreciation on incremental cost, arising on account of conversion difference of foreign currency liabilities for acquisition of fixed assets and stand by equipments , which are amortised over the residual life of the respective assets.

d) Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

e) The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division , Spun Yarn Division and Cotton Yarn Division

(ii) Power Generation Equipments

f) Free hold lands and leasehold lands are not depreciated.

g) Impairment of Assets - If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the highest of the net selling price and the value in use determined by the present value of estimated future cash flows.

ii) INVENTORIES:

Inventories are valued at cost or net realisable value which ever is lower. Historical cost has been determined as under:-

A Raw Materials At Batch cost.

B Stores, Spares At First In First Out method.

C Fuel Monthly weighted average

D Work-in-progress

(i) Preparatory Stage - at cost

(ii) Yarn Stage-at cost or net realizable value whichever is lower.

E Finished goods at cost or net realizable value whichever is lower.

[Cost formula used in clause (D) & (E): - Conversion cost and other cost in bringing the inventories to their present location and condition.]

F Waste and Scrap at net realisable value.

G Trading stocks at cost of purchase

iii) INVESTMENTS:

Long term investments are carried at cost including related expenses. In case of diminution in value other than temporary, the carrying amount is reduced to recognize the decline cost.

iv) RAW MATERIAL CONSUMPTION IS NET OF EXPORT BENEFITS.

v) RESEARCH AND DEVELOPMENT:

Research and development costs (other than costs of fixed assets acquired) are charged as an expense in the year in which they are incurred.

vi) EMPLOYEE BENEFITS:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service ) are measured at cost. Long -term employee benefits ( benefits which are payable after the end of twelve months from the end of the period in which the employees render service ) and post employment benefits ( benefits which are payable after completion of employment ) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund , a defined contribution plan are made in accordance with the statute , and are recognized as an expense when employees have rendered service entitling them to the contributions.

The costs of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method , on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligation recognized in the Balance Sheet represents the present value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

vii) PRELIMINARY, CAPITAL ISSUES AND DEFERRED REVENUE EXPENSES:

Preliminary, Capital issue expenses are amortised in a period of ten years. Upfront payment made for reduction in rate of interest and for fresh Term Loans and amalgamation expenses(Debited to Deferred Revenue Expenses) are amortised in a period of five years.

viii) REVENUE RECOGNITION:

(a) The accounts of the company are prepared under the historical cost convention and in accordance with the applicable accounting standards.

(b) Income is accounted for on accrual basis in accordance with Accounting Standard (AS) 9-"Revenue Recognition" which provides that where there is no reasonable certainty, the recognition of income be postponed.

(c) Excise Duty is recognized on dispatches to parties except consignment agents.

(d) Claims lodged with insurance companies and others are recognised in accounts to the extent they are measurable with reasonable certainty of acceptance. Excess/Shortfall is adjusted in the year of receipt.

ix) CENVAT:

a. CENVAT claimed on capital goods (Plant and Machinery), except for Plant and Machinery of Cotton Yarn Division and Service tax cenvat on plant & machinery of Wartsila Power Division, is credited to Plant and Machinery cost. Depreciation is not charged on the CENVAT claimed on capital goods in the books of account as well as under the Income Tax Act.

b. CENVAT on purchases of such inputs are deducted from the cost, wherever the excise duty has been paid on finished goods manufactured out of these inputs.

x) FOREIGN CURRENCY TRANSACTION:

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except incase of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

xi) EXPORT BENEFITS:

Export benefits on Export are recognized in accounts to the extent they are measurable with reasonable certainty.

Excess/Shortfall is adjusted in the year of receipt.

xii) PROVISIONS AND CONTINGENT LIABILITIES: a. Provisions are made when the present obligation of a past event gives rise to probable outflow, embodying economic benefit on settlement and the amount of obligation can be reliably estimated.

b. Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved.

c. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

xiii) TAXATION:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and tax laws enacted or substantially enacted by the Balance Sheet date in accordance with Accounting Standard 22 as notified by the regulatory authorities.

xiv) EXCISE DUTY:

Excise duty on manufactured goods wherever applicable is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

---

Mar 31, 2014

I) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated at cost, net of Cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. Stores and spares received along with the Plant & Machinery are being capitalised with related machine.

b) Cotton Yarn unit and Wartsila Power Plant are stated at cost without availing CENVAT, and thermal power plant is stated without availing service cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalized.

c) Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 as amended except depreciation on incremental cost, arising on account of conversion difference of foreign currency liabilities for acquisition of fixed assets and stand by equipments , which are amortised over the residual life of the respective assets.

d) Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

e) The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division , Spun Yarn Division and Cotton Yarn Division

(ii) Power Generation Equipments

f) Free hold lands and leasehold lands are not depreciated.

g) Impairment of Assets : If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the highest of the net selling price and the value in use determined by the present value of estimated future cash flows.

ii) INVENTORIES: Inventories are valued at cost or net realisable value which ever is lower. Historical cost has been determined as under :-

A Raw Materials At Batch cost.

B Stores, Spares At moving weighted average cost.

C Fuel Monthly weighted average

D Work-in-progress

(i) Preparatory Stage – at cost

(ii) Yarn Stage-at cost or net realizable value whichever is lower.

E Finished goods at cost or net realizable value whichever is lower.

[Cost formula used in clause (D) & (E): – Conversion cost and other cost in bringing the inventories to their present location and condition.]

F Waste and Scrap at net realisable value.

G Trading stocks at cost of purchase

iii) INVESTMENTS: Long term investments are carried at cost including related expenses. In case of diminution in value other than temporary, the carrying amount is reduced to recognize the decline cost.

iv) Raw Material consumption is net of Export benefits.

v) RESEARCH AND DEVELOPMENT: Research and development costs (other than costs of fixed assets acquired) are charged as an expense in the year in which they are incurred.

vi) EMPLOYEE BENEFITS:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long -term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered service entitling them to the contributions.

The costs of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligation recognized in the Balance Sheet represents the present value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

vii) PRELIMINARY, CAPITAL ISSUES AND DEFERRED REVENUE EXPENSES:

Preliminary, Capital issue expenses are amortised in a period of ten years. Upfront payment made for reduction in rate of interest and for fresh Term Loans and amalgamation expenses(Debited to Deferred Revenue Expenses) are amortised in a period of five years.

viii) REVENUE RECOGNITION:

(a) The accounts of the company are prepared under the historical cost convention and in accordance with the applicable accounting standards.

(b) Income is accounted for on accrual basis in accordance with Accounting Standard (AS) 9-"Revenue Recognition" which provides that where there is no reasonable certainty, the recognition of income be postponed.

(c) Excise Duty is recognized on dispatches to parties except consignment agents.

(d) Claims lodged with insurance companies and others are recognised in accounts to the extent they are measurable with reasonable certainty of acceptance. Excess/Shortfall is adjusted in the year of receipt.

ix) CENVAT

a. CENVAT claimed on capital goods (Plant and Machinery), except for Plant and Machinery of Cotton Yarn Division and Service tax cenvat on plant & machinery of Wartsila Power Division, is credited to Plant and Machinery cost. Depreciation is not charged on the CENVAT claimed on capital goods in the books of account as well as under the Income Tax Act.

b. CENVAT on purchases of such inputs are deducted from the cost, wherever the excise duty has been paid on finished goods manufactured out of these inputs.

x) FOREIGN CURRENCY TRANSACTION –

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except incase of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

xi) EXPORT BENEFITS – Export benefits on Export are recognized in accounts to the extent they are measurable with reasonable certainty. Excess/Shortfall is adjusted in the year of receipt.

xii) PROVISIONS AND CONTINGENT LIABILITIES –

a. Provisions are made when the present obligation of a past event gives rise to probable outflow, embodying economic benefit on settlement and the amount of obligation can be reliably estimated.

b. Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved

c. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

xiii) TAXATION :

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and tax laws enacted or substantially enacted by the Balance Sheet date in accordance with Accounting Standard 22 as notified by the regulatory authorities.

xiv) EXCISE DUTY :

Excise duty on manufactured goods wherever applicable is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

---

Mar 31, 2013

I) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated at cost, net of Cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. Stores and spares received along with the Plant & Machinery are being capitalised with related machine.

b) Cotton Yarn unit and Wartsila Power Plant are stated at cost without availing CENVAT, and thermal power plant is stated without availing service cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalized.

c) Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 as amended except depreciation on incremental cost, arising on account of conversion difference of foreign currency liabilities for acquisition of fixed assets and stand by equipments, which are amortised over the residual life of the respective assets.

d) Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

e) The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division , Spun Yarn Division and Cotton Yarn Division.

(ii) Power Generation Equipments.

f) Free hold lands and leasehold lands are not depreciated.

g) Impairment of Assets – If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the highest of the net selling price and the value in use determined by the present value of estimated future cash flows.

ii) INVENTORIES : Inventories are valued at cost or net realisable value which ever is lower. Historical cost has been determined as under :-

A Raw Materials At Batch cost.

B Stores, Spares At moving weighted average cost.

C Fuel Monthly weighted average

D Work-in-progress (i) Preparatory Stage – at cost

(ii) Yarn Stage-at cost or net

realizable value whichever is lower. E Finished goods at cost or net realizable value whichever is lower. [Cost formula used in clause (D) & (E): – Conversion cost and other cost in bringing the inventories to their present location and condition.]

F Waste and Scrap at net realisable value.

G Trading stocks at cost of purchase

iii) INVESTMENTS: Long term investments are carried at cost including related expenses. In case of diminution in value other than temporary, the carrying amount is reduced to recognize the decline cost.

iv) Raw Material consumption is net of Export benefits.

v) RESEARCH AND DEVELOPMENT : Research and development

costs (other than costs of fixed assets acquired) are charged as an expense in the year in which they are incurred.

vi) EMPLOYEE BENEFITS:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long –term employee benefits ( benefits which are payable after the end of twelve months from the end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment ) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund , a defined contribution plan are made in accordance with the statute , and are recognized as an expense when employees have rendered service entitling them to the contributions.

The costs of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method , on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligation recognized in the Balance Sheet represents the present value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

vii) PRELIMINARY, CAPITAL ISSUES AND DEFERRED REVENUE EXPENSES:

Preliminary, Capital issue expenses are amortised in a period of ten years. Upfront payment made for reduction in rate of interest and for fresh Term Loans and amalgamation expenses (Debited to Deferred Revenue Expenses) are amortized in a period of five years.

viii) REVENUE RECOGNITION:

(a) The accounts of the company are prepared under the historical cost convention and in accordance with the applicable accounting standards.

(b) Income is accounted for on accrual basis in accordance with Accounting Standard (AS) 9-"Revenue Recognition" which provides that where there is no reasonable certainty, the recognition of income be postponed.

(c) Excise Duty is recognized on dispatches to parties except consignment agents.

(d) Claims lodged with insurance companies and others are recognized in accounts on lodgment to the extent they are measurable with reasonable certainty of acceptance. Excess/Shortfall is adjusted in the year of receipt.

ix) CENVAT

a. CENVAT claimed on capital goods (Plant and Machinery), except for Plant and Machinery of Cotton Yarn Division and Service tax cenvat on plant & machinery of Wartsila Power Division, is credited to Plant and Machinery cost. Depreciation is not charged on the CENVAT claimed on capital goods in the books of account as well as under the Income Tax Act.

b. CENVAT on purchases of such inputs are deducted from the cost, wherever the excise duty has been paid on finished goods manufactured out of these inputs.

x) FOREIGN CURRENCY TRANSACTION –

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except incase of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

xi) EXPORT BENEFITS – Export benefits including estimated duty differentials accruing on account of entitlement for duty free raw materials against indigenous/duty paid raw material consumed for exports during the year are estimated and ascertained for at the year end.

xii) PROVISIONS AND CONTINGENT LIABILITIES –

a. Provisions are made when the present obligation of a past event gives rise to probable outflow, embodying economic benefit on settlement and the amount of obligation can be reliably estimated.

b. Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved

c. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

xiii) TAXATION :

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and tax laws enacted or substantially enacted by the Balance Sheet date in accordance with Accounting Standard 22 as notified by the regulatory authorities.

xiv) EXCISE DUTY :

Excise duty on manufactured goods wherever applicable is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

---

Mar 31, 2012

I) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated at cost, net of Cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. Stores and spares received along with the Plant & Machinery are being capitalised with related machine.

b) Cotton Yarn unit and Wartsila Power Plant are stated at cost without availing CENVAT, and thermal power plant is stated without availing service cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised

c) Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 as amended except depreciation on incremental cost, arising on account of conversion difference of foreign currency liabilities for acquisition of fixed assets and stand by equipments , which are amortised over the residual life of the respective assets.

d) Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

e) The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division , Spun Yarn Division and Cotton Yarn Division

(ii) Power Generation Equipments

f) Free hold lands and leasehold lands are not depreciated.

g) Impairment of Assets - If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the highest of the net selling price and the value in use determined by the present value of estimated future cash flows.

ii) INVENTORIES: Inventories are valued at cost or net realisable value which ever is lower. Historical cost has been determined as under

A Raw Materials At Batch cost.

B Stores, Spares At moving weighted average cost.

C Fuel Monthly weighted average

D Work-in-progress (i) Preparatory Stage-at cost

(ii) Yarn Stage-at cost

E Finished goods at cost

[Cost formula used in clause (D) & (E): - Conversion cost and other cost in bringing the inventories to their present location and condition.]

F Waste and Scrap at net realisable value.

G Trading stocks at cost of purchase

iii) INVESTMENTS: Long term investments are carried at cost including related expenses. In case of diminution in value other than temporary, the carrying amount is reduced to recognize the decline cost.

iv) Raw Material consumption is net of Export benefits.

v) RESEARCH AND DEVELOPMENT: Research and development costs (other than costs of fixed assets acquired) are charged as an expense in the year in which they are incurred.

vi) EMPLOYEE BENEFITS: Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long -term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as on expense when employees have rendered service entitling them to the contributions.

The costs of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method , on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligation recognized in the Balance Sheet represents the present value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

vii) PRELIMINARY, CAPITAL ISSUES AND DEFERRED REVENUE EXPENSES:

Preliminary, Capital issue expenses are amortised in a period of ten years. Upfront payment made for reduction in rate of interest and for fresh Term Loans and amalgamation expenses(Debited to Deferred Revenue Expenses) are amortised in a period of five years.

viii) REVENUE RECOGNITION:

(a) The accounts of the company are prepared under the historical cost convention and in accordance with the applicable accounting standards.

(b) Income is accounted for on accrual basis in accordance with Accounting Standard (AS) 9-"Revenue Recognition" which provides that where there is no reasonable certainty, the recognition of income be postponed.

(c) Excise Duty is recognized on dispatches to parties except consignment agents.

(d) Claims lodged with insurance companies and others are recognised in accounts on lodgment to the extent they are measurable with reasonable certainty of acceptance. Excess/Shortfall is adjusted in the year of receipt.

ix) CENVAT

a. CENVAT claimed on capital goods (Plant and Machinery), except for Plant and Machinery of Cotton Yarn Division and Service tax cenvat on plant & machinery of Wartsila Power Division, is credited to Plant and Machinery cost. Depreciation is not charged on the CENVAT claimed on capital goods in the books of account as well as under the Income Tax Act.

b. CENVAT on purchases of such inputs are deducted from the cost, wherever the excise duty has been paid on finished goods manufactured out of these inputs.

x) FOREIGN CURRENCY TRANSACTION-

Transactions in foreign currency are recorded at the exchange rate prevailing at the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset is added to or deducted from the cost of asset and depreciated over the balance life of the asset, and in other cases it is accumulated in a "Foreign currency Monetary item translation Difference account" and amortized over the balance period of such long-term asset/liability up to 31st March 2011, by recognition as income or expenses in each of such periods. Current assets (other than inventories) and current liabilities (other than those relating to fixed assets) are restated at the rates prevailing at the year end or at the forward rates where forward cover has been taken and the difference between the year end rate/forward rate and the exchange rate at the date of the transactions is recognised as income or expenses in the profit and loss account, and over the life of the contract in the case of the forward cover.

xi) EXPORT BENEFITS - Export benefits including estimated duty differentials accruing on account of entitlement for duty free raw materials against indigenous/duty paid raw material consumed for exports during the year are estimated and ascertained for at the yearend.

xii) PROVISIONS AND CONTINGENT LIABILITIES—

a. Provisions are made when the present obligation of a past event gives rise to probable outflow, embodying economic benefit on settlement and the amount of obligation can be reliably estimated.

b. Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved

c. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

xiii) TAXATION:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and tax laws enacted or substantially enacted by the Balance Sheet date in accordance with Accounting Standard 22 as notified by the regulatory authorities.

xiv) EXCISE DUTY:

Excise duty on manufactured goods wherever applicable is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

---

Mar 31, 2010

I) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated at cost, net of Cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. Stores and spares received along with the Plant & Machinery are being capitalised with related machine.

b) Cotton Yarn unit and Wartsila Power Plant are stated at cost without availing CENVAT, and thermal power plant is stated without availing service tax cenvat. All costs including financing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised

c) Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 as amended except depreciation on incremental cost, arising on account of conversion difference of foreign currency liabilities for acquisition of fixed assets and stand by equipments , which are amortised over the residual life of the respective assets.

d) Assets costing Rs.5000/- or less acquired on or after 1.7.1993 are fully depreciated.

e) The company provides for depreciation on following plant & machinery considering the same as continuous process plant.

(i) Filament Yarn Division , Spun Yarn Division and Cotton Yarn Division

(ii) Power Generation Equipments

f) Free hold lands and leasehold lands are not depreciated.

g) Impairment of Assets – If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the highest of the net selling price and the value in use determined by the present value of estimated future cash flows.

ii) INVENTORIES:

A Raw Materials At Batch cost.

B Stores, Spares At moving weighted average cost.

C Fuel Monthly weighted average

D Work-in-progress (i) Preparatory Stage - at cost

(ii) Yarn Stage - Cost or net realisable value whichever is lower.

E Finished goods at cost or net realisable value which ever is lower[Cost formula used in clause (D) & (E): - Conversion cost and other cost in bringing the inventories to their present location and condition.

F Waste and Scrap at net realisable value.

G Trading stocks at cost of purchase

H Materials taken/ at Cost/Book Value. On return of such quantity, difference between the given on loan amount adjusted and the Cost/Book value of such return is adjusted in respective materials account.



iii) INVESTMENTS:

Long term investments are carried at cost including related expenses. In case of diminution in value other than temporary, the carrying amount is reduced to recognize the decline cost.

iv) Raw Material consumption is net of Export benefits.

v) RESEARCH AND DEVELOPMENT:

Research and development costs (other than costs of fixed assets acquired) are charged as an expense in the year in which they are incurred.

vi) EMPLOYEE BENEFITS:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service ) are measured at cost. Long–term employee benefits ( benefits which are payable after the end of twelve months from the end of the period in which the employees render service ) and post employment benefits ( benefits which are payable after completion of employment ) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund , a defined contribution plan are made in accordance with the statute , and are recognized as an expense when employees have rendered service entitling them to the contributions.

The costs of providing leave encashment and gratuity ,defined benefit plans, are determined using the Projected Unit Credit Method , on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligation recognized in the Balance S h e e t represents the present value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

vii) PRELIMINARY, CAPITAL ISSUES AND DEFERRED REVENUE EXPENSES:

Preliminary, Capital issue expenses are amortised in a period of ten years. Upfront payment made for reduction in rate of interest and for fresh Term Loans and amalgamation expenses(Debited to Deferred Revenue Expenses) are amortised in a period of five years.

viii) REVENUE RECOGNITION:

(a) The accounts of the Company are prepared under the historical cost convention and in accordance with the applicable accounting standards.

(b) Income is accounted for on accrual basis in accordance with Accounting Standard (AS) 9-“Revenue Recognition” which provides that where there is no reasonable certainty, the recognition of income be postponed.

(c) Sales are inclusive of Sales Tax and Excise Duty are recognized on dispatches to parties except consignment agents.

(d) Claims lodged with insurance companies and others are recognised in accounts on lodgment to the extent they are measurable with reasonable certainty of acceptance. Excess/Shortfall is adjusted in the year of receipt.

ix) CENVAT

a. CENVAT claimed on capital goods (Plant and Machinery),

except for Plant and Machinery of Cotton Yarn Division and Service tax cenvat on plant & machinery of Wartsila Power Division, is credited to Plant and Machinery cost. Depreciation is not charged on the CENVAT claimed on capital goods in the books of account as well as under the Income Tax Act.

b. CENVAT on purchases of such inputs are deducted from the cost, wherever the excise duty has been paid on finished goods manufactured out of these inputs.

x) FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset is added to or deducted from the cost of asset and depreciated over the balance life of the asset, and in other cases it is accumulated in a “Foreign currency Monetary item translation Difference account" and amortized over the balance period of such long term asset/liability up to 31st March, 2011, by recognition as income or expenses in each of such periods. Current assets (other than inventories) and current liabilities (other than those relating to fixed assets) are restated at the rates prevailing at the year end or at the forward rates where forward cover has been taken and the difference between the year end rate/forward rate and the exchange rate at the date of the transactions is recognised as income or expenses in the profit and loss account, and over the life of the contract in the case of the forward cover.

xi) EXPORT BENEFITS

Export benefits including estimated duty differentials accruing on account of entitlement for duty free raw materials against indigenous/duty paid raw material consumed for exports during the year are estimated and ascertained for at the year end.

xii) PROVISIONS AND CONTINGENT LIABILITIES

a. Provisions are made when the present obligation of a past event gives rise to probable outflow, embodying economic benefit on settlement and the amount of obligation can be reliably estimated.

b. Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved

c. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

xiii) TAXATION :

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and tax laws enacted or substantially enacted by the Balance Sheet date in accordance with Accounting Standard 22 as notified by the regulatory authorities.

xiv) EXCISE DUTY :

Excise duty on manufactured goods wherever applicable is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.