Accounting Policies of Sri Lakshmi Saraswathi Textiles (Arni) Ltd. Company

Mar 31, 2025

Note: 1 Company Overview

Sri Lakshmi Saraswati Textiles (Arni) Limited is a public limited company incorporated and domiciled
in India and has its registered office at No. 16, Krishnamma Road, Nungambakkam, Chennai -
600 034. The company''s shares are listed in BSE Ltd. The company is principally engaged in the
manufacture of yarn and surgical face masks. The company is also engaged in generation of
electricity from its windmills for its captive consumption. The financial statements of the company
for the year ended 31^st March 2025 were approved and adopted by the Board of Directors of the
company in its meeting held on 24^th May 2025.

Note: 2 Statement of compliance

All accounting policies followed by the company are in accordance with the Indian Accounting
Standards (Ind AS) notified u/s 133 of the Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules,2015 and conform to Schedule III to the Companies Act, 2013 as
applicable.

Note: 3 Basis of Preparation and Compliance

The financial statements are prepared in accordance with the historical cost convention except for
certain items that are measured at fair values at the end of each reporting period, as explained in the
accounting policies set out below. The financial statements are prepared on a going concern basis
using accrual concept except for the cash flow information.

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

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price
is directly observable or estimated using another valuation technique. In estimating the fair value of
an asset or a liability, the Company takes into account the characteristics of the asset or liability if
market participants would take those characteristics into account when pricing the asset or liability at
the measurement date.

Fair value for measurement and/or disclosure purposes in these financial statements is determined
on such a basis and measurements that have some similarities to fair value but are not fair value,
such as net realizable value in Ind AS-2 inventories or value in use in Ind AS 36 - Impairment of
Assets.

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

Level 1 -Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.

Level 2 -Other than quoted prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly; and

Level 3 - Unobservable inputs for the asset or liability.

Note: 4 Material Accounting Policy Information

Pursuant to the Companies (Indian Accounting Standards) Amendment Rules, 2023 effective 01-04¬
2023, the company is required to disclose ''material accounting policy Information'' in lieu of the earlier
requirement of disclosing ''significant accounting policies''.

Specific disclosure of material accounting policy information where Ind AS permits options is made
hereunder:

The company has assessed the materiality of the accounting policy information, which involves exercising
judgement and considering both quantitative and qualitative factors by considering not only the size
and nature of the item or condition but also the characteristics of the transactions, events or conditions
that could make the information more likely to impact the decisions of the users of the financial
statements.

Note: 5 Significant Accounting Policies and key accounting estimates and judgments Significant Accounting
Policies

5.1 Property, Plant and Equipment (PPE)

i. For transition to Ind AS, the Company has elected to continue with the carrying value of all of its
PPE recognised as of April 1, 2016 (transition date) measured as per the previous IGAAP as its
deemed cost as on the transition date.

ii. Depreciation is recognized so as to write off the cost of assets (other than freehold land and
properties under construction) less their residual values over their useful lives, using the straight¬
line method. The estimated useful lives and residual values are reviewed at the end of each
reporting period and changes, if any, are treated as changes in accounting estimate. The useful
lives are based on technical estimates and the management believe that the useful lives are
realistic and fair approximation over the period of which the assets are likely to be used.

5.2 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortization and accumulated impairment losses. Amortization is recognised on a
straight-line basis over their estimated useful lives. The estimated useful life is reviewed annually
with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets are amortized equally over the estimated useful life not exceeding three years.

5.3 Financial assets

a. Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortized cost.
The debt instruments carried at amortised cost include Deposits, Loans and advances recoverable
in cash.

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

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

All other financial assets are subsequently measured at fair value.

b. Investments in equity instruments at FVTOCI

The Company has irrevocably designated to carry investment in equity instruments as Fair Value
Through Other Comprehensive Income (FVTOCI). On initial recognition, the Company makes an
irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in
fair value in Other Comprehensive Income pertaining to investments in equity instruments. This
election is not permitted if the equity investment is held for trading. These elected investments are
initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value
with gains and losses arising from changes in fair value recognised in Other Comprehensive
Income and accumulated in the ''Reserve for equity instruments through Other Comprehensive
Income''. On derecognition of such Financial Assets, cumulative gain or loss previously reported in
OCI is not reclassified from Equity to the Statement of Profit and Loss. However, the Company may
transfer such cumulative gain or loss into retained earnings within equity.

The Company has equity investments which are not held for trading.

Dividends on these investments in equity instruments are recognised in the Statement of Profit or
Loss when the Company''s right to receive same is established, it is probable that the economic
benefits associated with the dividend will flow to the Company, the dividend does not represent a
recovery of part of cost of the investment and the amount of dividend can be measured reliably.

c. Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses “Expected Credit Loss” (ECL) model, for
evaluating impairment of financial assets other than those measured at Fair Value Through Profit
and Loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

• 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

• Full lifetime expected credit losses (expected credit losses that result from all possible defaults
events over the life of the financial instrument).

For trade receivable, Company applies ''simplified approach'' which requires expected lifetime losses
to be recognised from initial recognition of the receivables.

For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no
significant increase in credit risk. If there is significant increase in credit risk, full lifetime ECL is used.

d. Financial liabilities

All financial liabilities are initially recognised at the value of respective contractual obligations. Financial
liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized
cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that
are subsequently measured at amortized cost are determined based on the effective interest method.
Interest expense that is not capitalized as part of costs of an asset is included in the ''Finance costs''
line item.

5.4 Inventories

Inventories other than by-products are stated at lower of cost and net realizable value. Inventory of by¬
products is stated at net realizable value. Materials and other items intended for use in production of
inventories are not written down below cost if the finished goods in which they will be incorporated
are expected to be sold at or above cost.

Cost comprises of all costs of purchase (that includes taxes and duties, net of input tax credit
entitlement), costs of conversion and other costs incurred in bringing the inventories to their present
location and condition.

Cost of raw materials, consumables, stores and spares is determined on weighted average basis
and includes inward freight and other direct expenses.

Net realizable value is the estimated selling price less estimated costs for completion and sale.

Obsolete, slow moving and defective inventories are periodically identified and written down when
necessary.

5.5 Revenue Recognition

a. Sale of products

Revenue is recognized upon transfer of control of the products to customers at a point in time i.e.,
when the products are delivered to the carrier in an amount that reflects the consideration that the
company expects to receive in exchange for those products.

b. Interest Income

Interest income from a financial asset is recognized when it is probable that the economic benefits
will flow to the company there exists no uncertainty in the ultimate realization of the interest income
and the amount can be measured reliably. Interest income is accrued on a time basis, by reference
to the principal outstanding and using effective interest rate method.

c. Insurance Claims

Insurance claims are recognized on the basis of claims admitted/ expected to be admitted and to the
extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate
collection.

5.6 Government grants

Government grants are not recognised until there is reasonable assurance that the Company will
comply with the conditions attaching to them and that the grants will be received.

Grants are recognised in the Statement of Profit and Loss on a systematic basis over the period in
which the Company recognises as expense the related costs which the grants are intended to
compensate. Specifically, Government grants whose primary condition is that the Company should
purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in
the Balance Sheet and transferred to the Statement of Profit and Loss on a systematic and rational
basis over the useful lives of the related assets.

Grants that are receivable as compensation for expenses or losses incurred or for the purpose of
giving immediate financial support to the Company with no future related costs are recognised in the
Statement of Profit and Loss in the period in which they become receivable.

5.7 Employee Benefits

(a) Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits and recognised in the period in which the employee renders the
related service. The Company recognizes the undiscounted amount of short-term employee benefits
expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting
any amount already paid.

(b) Post-employment benefits

(i) Defined Contribution Plans

Contribution to Defined Contribution Schemes towards retirement benefits in the form of Provident
fund is recognised as expense in the Statement of Profit and Loss during the period in which the
employee renders the related service.

(ii) Defined Benefit Plans

The Company operates Defined Benefit Gratuity Plan for employees. The cost of providing defined
benefits is determined using the Projected Unit Credit Method with actuarial valuations being carried
out at each reporting date. The defined benefit obligations recognised in the Balance Sheet represent
the present value of the defined benefit obligations as reduced by the fair value of plan assets, if
applicable. Any defined benefit asset (negative defined benefit obligations resulting from this
calculation) is recognized representing the present value of available refunds and reductions in
future contributions to the plan.

All expenses represented by current service cost, past service cost, if any, and net interest on the
defined benefit liability/ (asset) are recognised in the Statement of Profit and Loss. Remeasurements
of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on
the plan assets (excluding amounts included in net interest on the net defined benefit liabilities /
asset) are recognised in comprehensive income and taken to “retained earnings”. Such re¬
measurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.

The Company presents the above liability /(asset) as current and non-current in the Balance Sheet
as per actuarial valuation by the independent actuary. However, the entire liability towards gratuity is
considered as current as the Company will contribute this amount to the gratuity fund within the next
twelve months.

The Company is exposed to various risks in providing the above gratuity benefit which are as
follows:

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

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

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

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

(c) Other Long-term Employee Benefits

Entitlement to earned leave and sick leave is recognised when it accrues to employees. Earned
leave/ sick leave can be availed or encashed either during service or on retirement subject to a
restriction on the maximum number of accumulation of leave. The Company determines the liability
for such accumulated leave using the Projected Unit Credit Method with actuarial valuation being
carried out at each Balance Sheet date.

5.8 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
(which are assets that necessarily take a substantial period of time to get ready for their intended
use) are added to the cost of those assets, until such time as the assets are substantially ready for
their intended use or sale. Interest income earned on the temporary investment of specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalization. All other borrowing costs are recognised in the Statement of Profit and Loss in the
period in which they are incurred.

5.9 Foreign Currency Transactions

a. Initial Recognition

On initial recognition, transactions in foreign currencies are recorded in the functional currency (i.e.,
Indian Rupee), by applying to the foreign currency amount the spot exchange rate between the
functional currency and the foreign currency at the date of the transaction.

b. Measurement of foreign currency items at reporting date

Foreign currency monetary items are translated at the closing exchange rates. Non-monetary items
that are measured at historical cost in a foreign currency, are translated using the exchange rate at
the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency,
are translated using the exchange rates at the date when the fair value is measured.

c. Recognition of exchange difference

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.

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Mar 31, 2024

Note: 1 Company Overview

Sri Lakshmi Saraswati Textiles (Arni) Limited is a public limited company incorporated and domiciled in India and has its registered office at No. 16, Krishnamma Road, Nungambakkam, Chennai - 600 034. The company''s shares are listed in BSE Ltd. The company is principally engaged in the manufacture of yarn and surgical face masks. The company is also engaged in generation of electricity from its windmills for its captive consumption. The financial statements of the company for the year ended 31^st March 2024 were approved and adopted by the Board of Directors of the company in its meeting held on 27^th May 2024.

Note: 2 Statement of compliance

All accounting policies followed by the company are in accordance with the Indian Accounting Standards (Ind AS) notified u/s 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules,2015 and conform to Schedule III to the Companies Act, 2013 as applicable.

Note: 3 Basis of Preparation and Compliance

The financial statements are prepared in accordance with the historical cost convention except for certain items that are measured at fair values at the end of each reporting period, as explained in the accounting policies set out below. The financial statements are prepared on a going concern basis using accrual concept except for the cash flow information.

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

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS-2 inventories or value in use in Ind AS 36 - Impairment of Assets.

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

Level 1 -Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 -Other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Unobservable inputs for the asset or liability.

Note: 4 Material Accounting Policy Information

Pursuant to the Companies (Indian Accounting Standards) Amendment Rules, 2023 effective 01-042023, the company is required to disclose ''material accounting policy Information'' in lieu of the earlier requirement of disclosing ''significant accounting policies''.

Specific disclosure of material accounting policy information where Ind AS permits options is made hereunder:

The company has assessed the materiality of the accounting policy information, which involves exercising judgement and considering both quantitative and qualitative factors by considering not only the size and nature of the item or condition but also the characteristics of the transactions, events or conditions that could make the information more likely to impact the decisions of the users of the financial statements.

Note: 5 Significant Accounting Policies and key accounting estimates and judgments

Significant Accounting Policies

5.1 Property, Plant and Equipment (PPE)

i. For transition to Ind AS, the Company has elected to continue with the carrying value of all of its PPE recognised as of April 1, 2016 (transition date) measured as per the previous IGAAP as its deemed cost as on the transition date.

ii. Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straightline method. The estimated useful lives and residual values are reviewed at the end of each reporting period and changes, if any, are treated as changes in accounting estimate. The useful lives are based on technical estimates and the management believe that the useful lives are realistic and fair approximation over the period of which the assets are likely to be used.

iii. Estimated useful lives of the assets are as follows:

Asset	Years
Factory Buildings	30
Buildings (other than factory buildings) (Quarters)	60
Plant and Equipment (including continuous process plants)	15
Furniture and Fixtures	10
Vehicles	8 to 10
Office Equipment	5
Computer Equipment Hardware	3
Software	2
Electrical installation	10

iv. Assets costing Rs.10,000/- and below are depreciated in full in the year of addition.

5.2 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis over their estimated useful lives. The estimated useful life is reviewed annually with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets are amortized equally over the estimated useful life not exceeding three years.

5.3 Financial assetsa. Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortized cost. The debt instruments carried at amortised cost include Deposits, Loans and advances recoverable in cash.

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

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

All other financial assets are subsequently measured at fair value.

b. Investments in equity instruments at FVTOCI

The Company has irrevocably designated to carry investment in equity instruments as Fair Value Through Other Comprehensive Income (FVTOCI). On initial recognition, the Company makes an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in Other Comprehensive Income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in Other Comprehensive Income and accumulated in the ''Reserve for equity instruments through Other Comprehensive Income''. On derecognition of such Financial Assets, cumulative gain or loss previously reported in OCI is not reclassified from Equity to the Statement of Profit and Loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.

The Company has equity investments which are not held for trading.

Dividends on these investments in equity instruments are recognised in the Statement of Profit or Loss when the Company''s right to receive same is established, it is probable that the economic benefits associated with the dividend will flow to the Company, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.

c. Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses “Expected Credit Loss” (ECL) model, for evaluating impairment of financial assets other than those measured at Fair Value Through Profit and Loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

• 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

• Full lifetime expected credit losses (expected credit losses that result from all possible defaults events over the life of the financial instrument).

For trade receivable, Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables.

For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk, full lifetime ECL is used.

d. Financial liabilities

All financial liabilities are initially recognised at the value of respective contractual obligations. Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''Finance costs'' line item.

5.4 Inventories

Inventories other than by-products are stated at lower of cost and net realizable value. Inventory of byproducts is stated at net realizable value. Materials and other items intended for use in production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost.

Cost comprises of all costs of purchase (that includes taxes and duties, net of input tax credit entitlement), costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost of raw materials, consumables, stores and spares is determined on weighted average basis and includes inward freight and other direct expenses.

Net realizable value is the estimated selling price less estimated costs for completion and sale.

Obsolete, slow moving and defective inventories are periodically identified and written down when necessary.

5.5 Revenue Recognitiona. Sale of products

Revenue is recognized upon transfer of control of the products to customers at a point in time i.e., when the products are delivered to the carrier in an amount that reflects the consideration that the company expects to receive in exchange for those products.

b. Interest Income

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company there exists no uncertainty in the ultimate realization of the interest income and the amount can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and using effective interest rate method.

c. Insurance Claims

Insurance claims are recognized on the basis of claims admitted/ expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

5.6 Government grants

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Grants are recognised in the Statement of Profit and Loss on a systematic basis over the period in which the Company recognises as expense the related costs which the grants are intended to compensate. Specifically, Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the Balance Sheet and transferred to the Statement of Profit and Loss on a systematic and rational basis over the useful lives of the related assets.

Grants that are receivable as compensation for expenses or losses incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in the Statement of Profit and Loss in the period in which they become receivable.

5.7 Employee Benefits

(a) Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and recognised in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.

(b) Post-employment benefits

(i) Defined Contribution Plans

Contribution to Defined Contribution Schemes towards retirement benefits in the form of Provident fund is recognised as expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

(ii) Defined Benefit Plans

The Company operates Defined Benefit Gratuity Plan for employees. The cost of providing defined benefits is determined using the Projected Unit Credit Method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognised in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.

All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/ (asset) are recognised in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liabilities / asset) are recognised in comprehensive income and taken to “retained earnings”. Such re-measurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.

The Company presents the above liability /(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary. However, the entire liability towards gratuity is considered as current as the Company will contribute this amount to the gratuity fund within the next twelve months.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows:

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

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

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

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

(c) Other Long-term Employee Benefits

Entitlement to earned leave and sick leave is recognised when it accrues to employees. Earned leave/ sick leave can be availed or encashed either during service or on retirement subject to a restriction on the maximum number of accumulation of leave. The Company determines the liability for such accumulated leave using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.

5.8 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, (which are assets that necessarily take a substantial period of time to get ready for their intended use) are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.

5.9 Foreign Currency Transactions

a. Initial Recognition

On initial recognition, transactions in foreign currencies are recorded in the functional currency (i.e., Indian Rupee), by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

b. Measurement of foreign currency items at reporting date

Foreign currency monetary items are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.

c. Recognition of exchange difference

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.

5.10 Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

5.11 Statement of Cash Flows

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are based on classification made in a manner considered most appropriate to Company''s business.

Key Accounting estimates and judgments5.12 Use of Estimates

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.

5.13 Changes in estimates

The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of change in an accounting estimate is recognized prospectively by including it in profit or loss in (a) the period of the change if the change affects only that period; or (b) the period of the change and future periods, if the change affects both.

However, the change in an accounting estimate that gives rise to changes in assets and liabilities, or relates to an item of equity, is recognized by adjusting the carrying amount of the related asset, liability or equity item in the period of the change.

5.14 Key sources of estimation uncertainty

Key assumption concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as given below.

a. Actuarial valuation

The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognized in the Statement of Profit and Loss and in Other Comprehensive Income. Such valuation depends upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Information about such valuation is provided in the Notes to the financial statements.

b. Claims, Provisions and Contingent Liabilities

The Company does not have any ongoing litigations with tax and regulatory authorities and third parties. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability.

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Mar 31, 2015

1. Basis of preparation and presentation of financial statements

i) The financial statements have been prepared under the historical cost concept and in accordance with generally accepted accounting polices, the mandatory Accounting Standards issued by the Institute of Chartered Accountants and notified under the Companies (Accounting Standards) Rules, 2006 and relevant provisions of Companies Act 2013, as adopted consistently by the company.

ii) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii) All inventories, raw material, process stock, stores and spares and finished goods are valued at cost or net realizable value whichever is lower.

2. Use of Estimates

The preparation of financial statements is in accordance with generally accepted accounting principles and requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and disclosures of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates in the future period.

3. Tangible fixed assets

i) Tangible fixed assets are stated at cost of acquisition (net of CENVAT/ VAT wherever applicable) less accumulated depreciation/ amortization and impairment losses if any, except free hold land which is carried at cost less impairment losses if any. The cost comprises purchase prices, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure relating to an item of fixed asset is added to its book value only if it increases the future benefits from the asset beyond its previous assessed standard of performance. All other expenses on fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts are charged to the statement of profit and loss for the period as and when they occur.

ii) Depreciation for plant and machinery has been provided on Straight line method and for all other assets Written down value method has been followed.

iii) Gains or losses arising from disposal of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of such assets are recognized in the statement of profit and loss.

4. Intangible fixed assets

The cost of computer software that are installed are accounted at cost of acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any. Internally generated software is not capitalized and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

5. Investments

All investments being long term and non trade are stated at cost less permanent diminution in value if any.

6. Inventories

i) Inventories are valued at cost or net realizable value whichever is lower. Cost includes the cost incurred in bringing the inventories to their present location and condition.

ii) Raw materials, stores and spares are valued at cost or net realizable value whichever is lower. Cost includes the cost incurred in bringing the inventories to their present location and condition. For cost calculation of raw materials as it is not ordinarily inter changeable specific identification method is used. For cost calculation of stores and spares weighted average method is used.

iii) For valuation of finished goods / stock-in-process, cost includes material, direct labour, overheads (other than selling and administrative overheads) wherever applicable.

7. Revenue Recognition

i) Revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

ii) Sale of products is recognized when the significant risk and reward of ownership of the goods have been passed to the buyer. Sale value excludes excise duty, education cess, secondary and higher education cess, CST and VAT

iii) Dividend income, if any, is recognized when the company's right to receive dividend is established by the reporting date.

iv) Wind Mill Operation

The power generated at Wind Mill is fully consumed at mills and the maintenance expenses of the wind mills and cost of wheeling of power is charged to Statement of profit and loss.

8. Employee Benefits

i) Short-term employee benefits viz., salaries and wages are recognized as expense at the undiscounted amount in the statement of profit and loss for the year in which the related service is rendered.

ii) Defined contribution plan viz., contribution to provident fund is recognized as an expense in the statement of profit and loss for the year in which the employees have rendered services. The company contributes to provident fund administered by the Government on a monthly basis at 12% of employees basic salary. There are no other obligation other than the above defined contribution plan.

iii) Defined Benefit Plan.

Gratuity:

a) Company's liability towards gratuity in respect of employees who beneficially own shares in the company carrying more than 5% of the total voting power has been provided for on the basis of actuarial valuation and not funded.

b) Company's liability towards gratuity in respect of all other employees is worked out on the basis of actuarial valuation and is normally funded.

Leave:

As per policy of the company, unavailed leave, casual leave/ earned leave cannot be carried forward or encashed and hence there is no additional cost. The company recognize the cost as expense as and when the employee avails paid leave.

9. Provision, Contingent Liability and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be outflow of resources. Contingent liabilities not provided for, are disclosed in the accounts by way of Notes. Contingent Assets are not recognized.

10. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of those assets as per Accounting Standard 16. All other borrowing costs are charged to revenue.

11. Government Subsidy / Grant

Interest subsidy under the Technology Upgradation Fund Scheme (TUFs) is credited to the finance cost.

12. Foreign Currency Transactions

Foreign Currency Transactions are recorded at the rate of exchange prevailing on the date of the transaction. At the year end, all monetary assets and liabilities denominated in foreign currency are restated at the year end exchange rates. The premium / discount on forward contracts are amortized over the period of the contract. Exchange differences arising on actual payment/ realization and year end reinstatement referred to above are adjusted.

i) In respect of fixed assets acquired outside the country to the related cost of fixed assets and

ii) In all other cases in the statement of profit and loss.

13. Earning Per Share

Net profit after tax is divided by weighted average number of equity shares as stipulated in Accounting Standard 20.

14. Income Tax

The tax provision is considered as stipulated in Accounting Standard 22 and includes current and deferred tax liability. The company recognizes the accumulated deferred tax liability based on accumulated time difference using current tax rate. The company as a conservative measure, does not reckon deferred tax asset.

The company has considered credit entitlement of Minimum Alternate Tax (MAT) where it is reasonably certain that the credit will be available for set-off in accordance with the provision of the Income Tax Act, 1961.

15. Segment Reporting

As the company has only one business segment i.e., Textile and only one geographical segment, the segment reporting requirement as per Accounting Standard 17 is not applicable to the company

16. Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.

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Mar 31, 2014

1. Basis of preparation and presentation of financial statements

i) The financial statements have been prepared under the historical cost concept and in accordance with generally accepted accounting polices, the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standards) Rules, 2006 and relevant provisions of Companies Act 1956, as adopted consistently by the company.

ii) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii) During the year all inventories, raw material, process stock, stores and spares and finished goods are valued at cost or net realizable value whichever is lower. Hitherto, raw materials, process stock and stores and spares are valued at cost and finished goods at cost or market price whichever is lower. However, this change does not have any impact in the financial statements.

2. Use of Estimates

The preparation of financial statements is in accordance with generally accepted accounting principles and requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and disclosures of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates in the future period.

3. Tangible fixed assets

i) Tangible fixed assets are stated at cost of acquisition (net of CENVAT/ VAT wherever applicable) less accumulated depreciation/ amortization and impairment losses if any, except free hold land which is carried at cost less impairment losses if any. The cost comprises purchase prices, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure relating to an item of fixed asset is added to its book value only if it increases the future benefits from the asset beyond its previous assessed standard of performance. All other expenses on fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts are charged to the statement of profit and loss for the period as and when they occur.

ii) Depreciation for plant and machinery has been provided on Straight line method and for all other assets Written down value method has been followed.

iii) Gains or losses arising from disposal of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of such assets are recognized in the statement of profit and loss.

4. Intangible fixed assets

The cost of computer software that are installed are accounted at cost of acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any. Internally generated software is not capitalized and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

5. Investments

All investments being long term and non trade are stated at cost less permanent diminution in value if any.

6. Inventories

i) Inventories are valued at cost or net realizable value whichever is lower. Cost includes the cost incurred in bringing the inventories to their present location and condition.

ii) Raw materials, stores and spares are valued at cost or net realizable value whichever is lower. Cost includes the cost incurred in bringing the inventories to their present location and condition. For cost calculation of Raw materials as it is not ordinarily inter changeable specific identification method is used. For cost calculation of stores and spares weighted average method is used.

iii) For valuation of finished goods / stock-in-process, cost includes material, direct labour, overheads (other than selling and administrative overheads) wherever applicable.

7. Revenue Recognition

i) Revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

ii) Sale of products is recognized when the significant risk and reward of ownership of the goods have been passed to the buyer. Sale value excludes excise duty, education cess, secondary and higher education cess, CST and VAT.

iii) Dividend income, if any, is recognized when the company''s right to receive dividend is established by the reporting date.

iv) Wind Mill Operation

The power generated at Wind Mill is fully consumed at mills and the maintenance expenses of the wind mills and cost of wheeling of power is charged to Statement of profit and loss .

8. Employee Benefits

i) Short term employee benefits viz., salaries and wages are recognized as expense at the undiscounted amount in the statement of profit and loss for the year in which the related service is rendered.

ii) Defined contribution plan viz., contribution to provident fund is recognized as an expense in the statement of profit and loss for the year in which the employees have rendered services. The company contributes to provident fund administered by the Government on a monthly basis at 12% of employees basic salary. There are no other obligation other than the above defined contribution plan.

iii) Defined Benefit Plan.

Gratuity:

a) Company''s liability towards gratuity in respect of employees who beneficially own shares in the company carrying more than 5% of the total voting power has been provided for on the basis of actuarial valuation and not funded.

b) Company''s liability towards gratuity in respect of all other employees is worked out on the basis of actuarial valuation and is funded.

Leave:

As per policy of the company, unavailed leave, casual leave/ earned leave cannot be carried forward or encashed and hence there is no additional cost. The company recognize the cost as expense as and when the employee avails paid leave.

9. Provision, Contingent Liability and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be outflow of resources. Contingent liabilities not provided for, are disclosed in the accounts by way of Notes. Contingent Assets are not recognized.

10. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of those assets as per Accounting Standard 16. All other borrowing costs are charged to revenue.

11. Government Subsidy / Grant

Interest subsidy under the Technology Up gradation Fund Scheme (TUFs) is credited to the finance cost.

12. Foreign Currency Transactions

Foreign Currency Transactions are recorded at the rate of exchange prevailing on the date of the transaction. At the year end, all monetary assets and liabilities denominated in foreign currency are restated at the year end exchange rates. The premium / discount on forward contracts are amortised over the period of the contract. Exchange differences arising on actual payment/ realization and year end reinstatement referred to above are adjusted.

i) In respect of fixed assets acquired outside the country to the related cost of fixed assets and

ii) In all other cases in the statement of profit and loss.

13. Earning Per Share

Net profit after tax is divided by weighted average number of equity shares as stipulated in Accounting Standard 20.

14. Income Tax

The tax provision is considered as stipulated in Accounting Standard 22 and includes current and deferred tax liability. The company recognizes the accumulated deferred tax liability based on accumulated time difference using current tax rate.

The company has considered credit entitlement of Minimum Alternate Tax (MAT) where it is reasonably certain that the credit will be available for set-off in accordance with the provision of the Income Ta x Act, 1961.

15. Segment Reporting

As the company has only one business segment i.e., Textile and only one geographical segment, the segment reporting requirement as per Accounting Standard 17 is not applicable to the company

16. Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the company''s fixed assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.

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Mar 31, 2013

1. ACCOUNTING CONCEPTS Financial statements are based on historical cost concept. Mercantile system of accounting has been followed and income and expenditure are recognized on accrual basis.

2.FIXED ASSETS AND DEPRECIATION ( IN ACCORDANCE WITH AS -10 ISSUED BY ICAI ) Fixed assets are stated at cost of acquisition.

METHOD OF PROVIDING DEPRECIATION ( IN ACCORDANCE WITH AS - 6 ISSUED BY ICAI ) Depreciation for Plant and Machinery has been provided on Straight Line Method and for other assets on Written Down Value Method.

RATE OF DEPRECIATION ADOPTED

On all assets acquired upto 31-03-1987, depreciation has been provided at the then prevailing rate of depreciation as per Income Tax rules. For assets acquired from 01-04-1987, rates given in Schedule XIV to the Companies Act, 1956 have been adopted.

3. INVESTMENTS (IN ACCORDANCE WITH AS -13 ISSUED BY ICAI) Investments are stated at cost

4. INVENTORY VALUATION (IN ACCORDANCE WITH AS - 2 ISSUED BY ICAI) Raw Materials, Process stock and stores & spares - Valued at cost. Finished Goods - Valued at cost or Market price, whichever is lower.

5. RETIREMENT BENEFITS (IN ACCORDANCE WITH AS -15 ISSUED BY ICAI) a. Liability for Gratuity

i) Company''s Liability towards Gratuity in respect of Directors on full time employment who beneficially own shares in the Company carrying more than 5% of the total voting power has been provided for and not funded. The liability on this account, provided for and not funded, is Rs.25.45 lakhs as on 31.03.2013

ii) Company''s liability towards Gratuity in respect of all other employees is worked out on actuarial basis and is funded.

b. Contribution to Provident Fund is made as per the provisions of Employees'' Provident Funds and

Miscellaneous Provisions Act, 1952 and remitted to the Provident Fund Commissioner.

c. Liability on account of leave salary has been provided for in accordance with the scheme in force.

6. RELATED PARTY DISCLOSURES (IN ACCORDANCE WITH AS -18 ISSUED BY ICAI)

a) List of Related Parties

Associate Company B.R. Theatres and Industrial Concern Pvt. Ltd.,

b) Key Management Personal

Name of the related Party Nature of relationship

i) Sri R.Srihari Managing Director

ii) Sri S.Balakrishna Wholetime Director

iii) Sri R.Padmanaban Technical Director

7. CONTINGENCIES (IN ACCORDANCE WITH AS -29 ISSUED BY ICAI)

Contingent liabilities are indicated by way of notes forming part of Accounts.

8. INCOME IN FOREIGN EXCHANGE (IN ACCORDANCE WITH AS -111SSUED BY ICAI)

Export sales in foreign currency are accounted at the exchange rates prevailing on the date of invoice/ negotiation of documents where such sales are not covered by forward contracts.

9. EXPENDITURE IN FOREIGN EXCHANGE (IN ACCORDANCE WITH AS -11 ISSUED BY ICAI)

Expenditure in foreign currency is accounted at the actual amount spent and provision for expenses to be paid in foreign currency has been made at the rate of exchange prevailing on the Balance sheet date.

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Mar 31, 2012

1. ACCOUNTING CONCEPTS

Financial statements are based on historical cost concept. Mercantile system of accounting has been followed and income and expenditure are recognized on accrual basis.

2. FIXED ASSETS AND DEPRECIATION (IN ACCORDANCE WITH AS -10 ISSUED BY ICAI)

Fixed assets are stated at cost of acquisition.

METHOD OF PROVIDING DEPRECIATION ( IN ACCORDANCE WITH AS - 6 ISSUED BY ICAI ) Depreciation for Plant and Machinery has been provided on Straight Line Method and for other assets on Written Down Value Method.

RATE OF DEPRECIATION ADOPTED

On all assets acquired upto 31-03-1987, depreciation has been provided at the then prevailing rate of depreciation as per Income Tax rules. For assets acquired from 01-04-1987, rates given in Schedule XIV to the Companies Act, 1956 have been adopted.

3. INVESTMENTS (IN ACCORDANCE WITH AS -13 ISSUED BY ICAI)

Investments.are stated at cost

4. INVENTORY VALUATION (IN ACCORDANCE WITH AS - 2 ISSUED BY ICAI)

Raw Materials, Process stock and stores & spares - Valued at cost.

Finished Goods - Valued at cost or Market price, whichever is lower.

5. RETIREMENT BENEFITS (IN ACCORDANCE WITH AS -15 ISSUED BY ICAI)

a. Liability for Gratuity ,

i) Company's Liability towards Gratuity in respect of Directors on full time employment who beneficially own shares in the Company carrying more than 5% of the total voting power has been provided for and not funded. The liability on this account, provided for and not funded, is Rs.24.58 lakhs as on

31.03.2012

ii) Company's liability towards Gratuity in respect of all other employees is worked out on actuarial basis and is funded.

b. Contribution to Provident Fund is made as per the provisions of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and remitted to the Provident Fund Commissioner.

c. Liability on account of leave salary has been provided for in accordance with the scheme in force.

6. RELATED PARTY DISCLOSURES (IN ACCORDANCE WITH AS -18 ISSUED BY ICAI)

a) List of Related Parties

Associate Company Nil

b) Key Management Personal

Name of the related Party , Nature of relationship

i) Sri R.Srihari Managing Director

ii) Sri S.Balakrishna Wholetime Director

iii) Sri R.Padmanaban Technical Director

c) Particulars of Transaction with Related Parties.

I) Transaction with Associate Company Nil

II) Details of Transaction relating to persons referred to in item ( b) above.

Remuneration - Rs 34,34,511/-( Previous year - Rs. 34,42,769/-)

I ill Details of Transaction relating to Interest paid for short term loans Rs.6,05,733/- (Previous year - Rs.3,00,000/-) ‘

7. DEFERRED TAX LIABILITY (IN ACCORDANCE WITH AS -22 ISSUED BY ICAI)

Rs.

Opening Deferred tax liability as on 01-04-2011 1,78,48,245

Less:- Transferred from P & L account during 2011-12 1,78,48,245

Closing Deferred tax liability as on 31-03-20t2 NiJ

8. CONTINGENCIES (IN ACCORDANCE WITH AS-29 ISSUED BY ICAI)

Contingent liabilities are indicated by way of notes forming part of Accounts.

9. INCOME IN FOREIGN EXCHANGE (IN ACCORDANCE WITH AS-11 ISSUED BY ICAI)

Export sales in foreign currency are accounted at the exchange rates prevailing on the date of invoice/ negotiation of documents where such sales are not covered by forward contracts.

10. EXPENDITURE IN FOREIGN EXCHANGE (IN ACCORDANCE WITH AS-11 ISSUED BY ICAI)

Expenditure in foreign currency is accounted at the actual amount spent and provision for expenses to be paid in foreign currency has been made at the rate of exchange prevailing on the Balance sheet -date.

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Mar 31, 2010

1. ACCOUNTING CONCEPTS

Financial statements are based on historical cost concept. Mercantile system of accounting has been followed and income and expenditure are recognised on accrual basis.

2. FIXED ASSETS AND DEPRECIATION (IN ACCORDANCE WITH AS -10 ISSUED BY ICAI )

Fixed assets are stated at cost of acquisition.

METHOD OF PROVIDING DEPRECIATION (IN ACCORDANCE WITH AS - 6 ISSUED BY ICAI)

Depreciation for Plant and Machinery has been provided on Straight Line Method and for other assets on Written Dowi Value Method.

RATE OF DEPRECIATION ADOPTED

On all assets acquired upto 31-03-1987, depreciation has been provided at the then prevailing rate of depreciation a; per Income Tax rules. For assets acquired from 01-04-1987, rates given in Schedule XIV to the Companies Act, 1950 have been adopted.

3. INVESTMENTS (IN ACCORDANCE WITH AS -13 ISSUED BY ICAI)

Investments are stated at cost

4. INVENTORY VALUATION ( IN ACCORDANCE WITH AS - 2 ISSUED BY ICAI )

Raw Materials, Process stock and stores S spares - Valued at cost. Finished Goods - Valued at cost or Market price, whichever is lower.

5. RETIREMENT BENEFITS (IN ACCORDANCE WITH AS -15 ISSUED BY ICAI)

a. Liability for Gratuity

I) Companys Liability towards Gratuity in respect of Directors on full time employment who beneficially own shares in the Company carrying more than 5% of the total voting power has been provided for and not funded. The liability on this account, provided for and not funded, is Rs.22.85 lakhs as on 31.03.2010

ii) Companys liability towards Gratuity in respect of all other employees is worked out on actuarial basis. The total liability as on 31.03.2010 is Rs.150.77 lakhs. Out of which Rs.54.38 lakhs has been funded and balance Rs.96.39 lakhs is yet to be funded.

b. Contribution to Provident Fund is made as per the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952 and remitted to the Provident Fund Commissioner.

c. Liability on account of leave salary has been provided for in accordance with the scheme in force.