Accounting Policies of Veejay Lakshmi Engineering Works Ltd. Company

Mar 31, 2025

1. Corporate information

Veejay Lakshmi Engineering Works Limited is a public company incorporated in India under the
provisions of the Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange [BSE].
The principal place of business is Coimbatore. The Company manufactures Textile machinery used
in post spinning operations and also has a textile unit producing yarn and knitted fabrics. The
products are sold in both domestic and international markets. The financial Statements are approved
for issue by the Company’s Board of Directors on 29^th May, 2025.

2. Statement of compliance/Accounting treatment

The financial statements have been prepared in accordance with Indian Accounting Standards
(Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with
section133 of the Companies Act, 2013.

3. Basis of preparation of financial statements

The financial statements are prepared on accrual basis of accounting under historical cost convention
except as otherwise provided in policy and in accordance with Indian Accounting Standard (Ind-AS)
as notified by Ministry of Corporate Affairs under Companies (Indian Accounting Standards)Rules,
2015 and guidelines issued by the Securities and Exchange Board of India (SEBI) and subsequent
amendments thereof as well as with the additional requirements applicable to the financial statements
as set forth in the Companies Act. All items having material bearing on the financial statements are
recognised on the accrual basis.

4. Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial
assets and liabilities that are measured at fair values.

Measurement of fair Values

A number of Company’s accounting policies and disclosures require a measurement of their fair
value, for both financial and non-financial assets and liabilities

The Company has an established control framework with respect to the measurement of fair values.
This includes periodic review of all significant fair value measurement, including level 3 fair values.
The management regularly reviews significant unobservable inputs and valuation adjustments. Fair
values are categorized into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.

- Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 : inputs other than quoted prices included in Level 1 that are observable for the asset

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 : inputs for the asset or liability that are not based on observable market data

(unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market
data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall
into different levels of the fair value hierarchy, then the fair value measurement is categorized in its
entirety in the same level of the fair value hierarchy as the lowest level input that is significant to
the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the other
Notes to Accounts.

5. Use of estimates and judgment

The preparation of financial statements requires management to make judgments, estimates and
assumptions that affect the reported amount of assets, liabilities expenses and revenue during the
reporting period. Although such estimates and assumptions are made on reasonable and prudent
basis taking into all possible information, actual results could differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and revisions to accounting
estimates are recognized in the period in which the estimates are revised.

Application of accounting policies that require critical accounting estimates involving complex and
subjective judgements and the use of assumptions in these financial statements are valuation of
defined benefit obligations, provisions, contingent liabilities and impairment of trade receivables.

a) impairment of Trade Receivables:

The company estimates the credit allowance as per practical expedient based on historical credit
loss experience.

b) provisions:

Provision is recognised when the Company has a present obligation as a result of past event and it
is probable that an outflow of resources will be required to settle the obligation, in respect of which
a reliable estimate can be made. These are reviewed at each balance sheet date adjusted to reflect
the current best estimates. The policy for the same has been explained under Note 14 of Significant
Accounting policies.

6. Functional and presentation currency

These Financial Statements are presented in Indian Rupees, which is also Company’s functional
currency.

7. property, plant and Equipment and intangible Assets

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and impairment
loss, if any. Such costs comprise of purchase price and any directly attributable cost of bringing
the assets to its working condition for intended use and also include any estimate of the cost of
dismantling and removing the item and restoring the site on which it is located.

The company depreciates property, plant & equipment using the straight line method on an estimated
life as prescribed in Schedule II to the Companies Act, 2013.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are stated at cost less accumulated amortization and impairment if any.
The estimated useful lives and residual values of the Property, Plant & Equipment and Intangible
assets are reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.

An item of Property, Plant & Equipment and intangible assets is derecognized upon disposal or when
no future economic benefits are expected to arise from the continued use of the asset. Any gain or
loss arising on the disposal or retirement of an item of Property, Plant & Equipment and intangible
assets are determined as the difference between the sales proceeds and the carrying amount of
the asset and is recognized in the profit or loss. Advance paid towards the acquisition of property,
plant & equipment outstanding at each Balance sheet date is classified as capital advance under
other non-current assets.

8. impairment of assets
Financial Assets:

The Company assesses at each date of balance sheet whether a financial asset or a group of
financial assets is impaired. IND AS 109 requires expected credit losses to be measured through
a loss allowance. The Company recognizes lifetime expected losses for all contract assets and /
or all trade receivables that do not constitute a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal to the 12 month expected credit losses
or at an amount equal to the life time expected credit losses if the credit risk on the financial asset
has increased significantly since initial recognition.

Non-financial assets:

Property, Plant and Equipment and Other Intangible Assets: The Company reviews at each reporting
period whether there is any indication that an asset may be impaired. If any such indication exists,
the company estimates the recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which the asset belongs is less than
carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognized in the Statement of Profit & loss.

9. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met
only when the asset is available for immediate sale in its present condition subject only to terms
that are usual and customary for sale of such asset and its sale is highly probable. Management
must be committed to the sale, which should be expected to qualify for recognition as a completed
sale within one year from the date of classification. Non-current assets classified as held for sale
are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant
and equipment and Intangible assets are not depreciated or amortized once classified as held for
sale.

10. investment property

Investment property is property held in the form of land/building which is mainly held for the purpose
of capital appreciation, but not for sale in the ordinary course of business. Upon initial recognition,
an investment property is measured at cost. Subsequent to initial recognition, investment property
is measured at cost less impairment losses, if any. An investment property is derecognised upon
disposal or when the investment property is permanently withdrawn from use and no future economic
benefits are expected from the disposal. Any gain or loss arising on derecognition of the property
(calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the period in which the property is derecognised.

11. Borrowing cost

Borrowing Cost specifically identified to the acquisition or construction of qualifying assets is
capitalized as part of cost of such assets up to the period the project is commissioned or asset is
put to use. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. The borrowing cost incurred on common funds borrowed generally and used for the
purpose of obtaining the qualifying assets, is apportioned on rational basis, the remaining borrowing
costs are charged to the Statement of Profit and Loss. Income earned on the temporary investment
of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalization.

Finance cost-Interest expense is recognised using Effective interest rate method and includes
notional interest on unsecured loan which represents interest waived over the period.

12. Accounting Policy on Revenue recognition

The Company has adopted Ind AS 115 ‘Revenue from Contracts with Customers’ with the date
of initial application being April 1, 2018. Ind AS 115 establishes a comprehensive framework on
revenue recognition. Ind AS 115 replaces Ind AS 18 ‘Revenue ‘ and Ind AS 11 ‘Construction
Contracts’.

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of
the consideration received or receivable net of returns, trade discounts. Revenue is recognised on
the basis of despatches in accordance with the terms of sale when the significant risks and rewards
of ownership have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of the goods can be estimated reliably, there is no continuing
effective control over or managerial involvement with the goods and the amount of revenue can be
measured reliably. The timing of transfers of risk and rewards varies depending on the individual
terms of sale.

a. Revenue from Service is recognised in accordance with the specific terms of contract on
performance.

b. Interest: Interest income from a financial asset is recognised when it is probable that the
economic benefits will flow to the company and the amount of income can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net carrying amount on
initial recognition.

c. Dividend Income is recognized when the Company actually receives dividend.

d. Export Incentives under Duty Drawback scheme are recognized when the right to receive
payments is established and there is no uncertainty regarding the amount of consideration or
its collectability.

13. Employee Benefits

Employee benefits include salaries, wages, provident fund, gratuity, leave encashment, compensate
absences and retirement benefits.

Short-term employee benefits

Short-term employee benefits expected to be paid in exchange for the services rendered by
employees are recognized undiscounted during the period employee renders services. These benefits
include remuneration, bonus, incentives, etc.

Long-term employee benefits
Defined contribution plans

Retirement benefit plans in the form of Provident Fund are charged as an expense on an accrual
basis when employees have rendered the service.

Defined benefit plans

Defined benefit plans comprises of Gratuity. For defined retirement benefit plans, the cost of
providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out at the end of each reporting period. Re-measurement, comprising actuarial gains
and losses and the effect of the changes to the asset ceiling (if applicable), is reflected immediately
in the balance sheet with a charge or credit recognised in other comprehensive income in the period
in which they occur and consequently recognised in retained earnings and is not reclassified to profit
or loss.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit
or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is
limited to the present value of any economic benefits available in the form of reductions in future
contributions to the plans.

Other long term employee benefits

Other long term employee benefit comprises of leave encashment. The leave benefits are recognized
based on the present value of defined obligation which is computed using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period.

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Mar 31, 2024

1. CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES:

1. Corporate information

Veejay Lakshmi Engineering Works Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange [BSE]. The principal place of business is Coimbatore. The Company manufactures Textile machinery used in post spinning operations and also has a textile unit producing yarn and knitted fabrics. The products are sold in both domestic and international markets. The financial Statements are approved for issue by the Company''s Board of Directors on 29th May, 2024.

2. Statement of compliance/Accounting treatment

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section133 of the Companies Act, 2013.

3. Basis of preparation of financial statements

The financial statements are prepared on accrual basis of accounting under historical cost convention except as otherwise provided in policy and in accordance with Indian Accounting Standard (Ind-AS) as notified by Ministry of Corporate Affairs under Companies (Indian Accounting Standards) Rules, 2015 and guidelines issued by the Securities and Exchange Board of India (SEBI) and subsequent amendments thereof as well as with the additional requirements applicable to the financial statements as set forth in the Companies Act. All items having material bearing on the financial statements are recognised on the accrual basis.

4. Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities that are measured at fair values.

Measurement of fair Values

A number of Company''s accounting policies and disclosures require a measurement of their fair value, for both financial and non-financial assets and liabilities

The Company has an established control framework with respect to the measurement of fair values. This includes periodic review of all significant fair value measurement, including level 3 fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 : inputs other than quoted prices included in Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 : inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the other Notes to Accounts.

5. Use of estimates and judgment

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the reported amount of assets, liabilities expenses and revenue during the reporting period. Although such estimates and assumptions are made on reasonable and prudent basis taking into all possible information, actual results could differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and revisions to accounting estimates are recognized in the period in which the estimates are revised.

Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in these financial statements are valuation of defined benefit obligations, provisions, contingent liabilities and impairment of trade receivables.

a) Impairment of Trade Receivables:

The company estimates the credit allowance as per practical expedient based on historical credit loss experience.

b) Provisions:

Provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date adjusted to reflect the current best estimates. The policy for the same has been explained under Note 14 of Significant Accounting policies.

6. Functional and Presentation currency

These Financial Statements are presented in Indian Rupees, which is also Company’s functional currency.

7. Property, Plant and Equipment and Intangible Assets

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and impairment loss, if any. Such costs comprise of purchase price and any directly attributable cost of bringing the assets to its working condition for intended use and also include any estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

The company depreciates property, plant & equipment using the straight line method on an estimated life as prescribed in Schedule II to the Companies Act, 2013.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are stated at cost less accumulated amortization and impairment if any.

The estimated useful lives and residual values of the Property, Plant & Equipment and Intangible assets are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of Property, Plant & Equipment and intangible assets is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant & Equipment and intangible assets are determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the profit or loss. Advance paid towards the acquisition of property, plant & equipment outstanding at each Balance sheet date is classified as capital advance under other non-current assets.

8. Impairment of assets Financial Assets:

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. IND AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

Non-financial assets:

Property, Plant and Equipment and Other Intangible Assets: The Company reviews at each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit & loss.

9. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment and Intangible assets are not depreciated or amortized once classified as held for sale.

10. Investment Property

Investment property is property held in the form of land/building which is mainly held for the purpose of capital appreciation, but not for sale in the ordinary course of business. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less impairment losses, if any. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

11. Borrowing cost

Borrowing Cost specifically identified to the acquisition or construction of qualifying assets is capitalized as part of cost of such assets up to the period the project is commissioned or asset is put to use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. The borrowing cost incurred on common funds borrowed generally and used for the purpose of obtaining the qualifying assets, is apportioned on rational basis, the remaining borrowing costs are charged to the Statement of Profit and Loss. Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Finance cost-Interest expense is recognised using Effective interest rate method.

12. Accounting Policy on Revenue recognition

The Company has adopted Ind AS 115 ''Revenue from Contracts with Customers'' with the date of initial application being April 1, 2018. Ind AS 115 establishes a comprehensive framework on revenue recognition. Ind AS 115 replaces Ind AS 18 ''Revenue'' and Ind AS 11 ''Construction Contracts''.

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable net of returns, trade discounts. Revenue is recognised on the basis of despatches in accordance with the terms of sale when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of the goods can be estimated reliably, there is no continuing effective control over or managerial involvement with the goods and the amount of revenue can be measured reliably. The timing of transfers of risk and rewards varies depending on the individual terms of sale.

a. Revenue from Service is recognised in accordance with the specific terms of contract on performance.

b. Interest : Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

c. Dividend Income is recognized when the Company''s right to receive is established.

d. Export Incentives under Duty Drawback scheme are recognized when the right to receive payments is established and there is no uncertainty regarding the amount of consideration or its collectability.

13. Employee Benefits

Employee benefits include salaries, wages, provident fund, gratuity, leave encashment, compensate absences and retirement benefits.

Short-term employee benefits

Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized undiscounted during the period employee renders services. These benefits include remuneration, bonus, incentives, etc.

Long-term employee benefits Defined contribution plans

Retirement benefit plans in the form of Provident Fund are charged as an expense on an accrual basis when employees have rendered the service.

Defined benefit plans

Defined benefit plans comprises of Gratuity. For defined retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. Re-measurement, comprising actuarial gains and losses and the effect of the changes to the asset ceiling (if applicable), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur and consequently recognised in retained earnings and is not reclassified to profit or loss.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.

Other long term employee benefits

Other long term employee benefit comprises of leave encashment. The leave benefits are recognized based on the present value of defined obligation which is computed using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period.

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Mar 31, 2016

I. SIGNIFICANT ACCOUNTING POLICIES

A. System of Accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of Estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. Fixed Assets/Borrowing Costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit /TED and VAT, if any, to the extent it could be adjusted against the Excise Duty/VAT liability of the Company. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation on Fixed Assets has been provided on useful life of the assets in accordance with Schedule II of the Companies Act, 2013.

F. Taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

H. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes. The Company has no foreign operations.

I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

J. Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

K. Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

L. Earnings Per Share: Basic Earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

M. Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into three segments - Engineering, Textiles and Windmills. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. Self Consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

The Company is holding 26.2% of equity shares in M/s Veejay Sales and Services Limited. The financial details of the above company and the value of investments computed as specified in AS23 are given below

Financial Details of the Associate Company, M/s Veejay Sales and Services Limited

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Mar 31, 2015

A. system of accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. fixed assets/Borrowing costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit /TED and VAT, if any, to the extent it could be adjusted against the Excise Duty/VAT liability of the Company. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation on Fixed Assets has been provided on useful life of the assets in accordance with Schedule II of the Companies Act, 2013. Depreciable value of assets not having useful life as at 01-04-2014 has been adjusted in retained earnings.

F. taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. In accordance with AS 22, the deferred tax for timing differences between the book and tax Profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

H. foreign exchange transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes. The Company has no foreign operations.

I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

J. investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

K. Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

L. Earning Per share: Basic Earning per share is calculated by dividing the net Profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

M. Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into three segments – Engineering, Textiles and Windmills. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. Self Consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

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Mar 31, 2014

A. System of Accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of Estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. Fixed Assets/Borrowing Costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation has been provided on straight- line method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past.

F. Taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

H. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

J. Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

K. Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

L. Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

M. Cash flow Statement: Cash flows are prepared under the "indirect method". Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting, the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

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Mar 31, 2013

A. System of Accounting: The Financial Statements are prepared under the historical cost convention, and on accrual basis in accordance with the applicable accounting standards.

B. Use of estimates: The preparation of the fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold/transferred to the buyer for a defnite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

d. fixed assets/Borrowing costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fxed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation has been provided on straight-line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classifed as continuous process plant and depreciated accordingly as has been done in the past.

f. taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book proft tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profts for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. inventory Valuation

1) Raw Material At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is lower

(inclusive of Excise Duty)

4) Work-in-Progress At estimated cost

5) Scrap/Waste At estimated Cost or net realisable value whichever is

lower (inclusive of Excise Duty, wherever applicable).

H. Employee Benefts: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

I. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fuctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Proft and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

J. impairment of assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fxed assets of the Company will not be lower than the book value of the fxed assets. Hence no provision has been made for impairment.

K. investments: Investments are shown at cost. Investment fuctuation reserve has been created for the diminution in value of quoted investments.

L. Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent liabilities are not recognized but are disclosed in the notes to fnancial statements. Contingent assets are neither recognized nor disclosed in the fnancial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to refect the current best estimates.

M. earning Per share: Basic Earning per share is calculated by dividing the net proft or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. Cash fow Statement: Cash fows are prepared under "indirect method." Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

o. segment reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments – one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

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Mar 31, 2012

A. System of Accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of Estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. recognition of income and expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. fixed assets/Borrowing costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. depreciation: Depreciation has been provided on straight- line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. All buildings have been depreciated at the rate 3.34%. Accessories/power control units, wherever they are attached to the machines, have been depreciated at the same rate applicable for machinery. All electrical equipments including fans, air circulators and air conditioners have been depreciated at the rate of 7.07%. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. For assets of value less than Rs. 5,000/- acquired during the year, 100% depreciation has been provided.

F. taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. inventory Valuation

1) Raw Material At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is lower (inclusive of Excise Duty)

4) Work - in Progress At estimated cost

5) Scrap/Waste At estimated Cost or net realisable value whichever is lower (inclusive of Excise Duty, wherever applicable).

H. employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

I. foreign exchange transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

J. impairment of assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

K. investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

L. Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

M. earning Per share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. cash flow statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

O. segment reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments – one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

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Mar 31, 2011

(A) System of Accounting : The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

(B) Use of Estimates : The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

(C) Recognition of Income and Expenditure : Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

(D) Fixed Assets / Borrowing Costs : Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

(E) Depreciation : Depreciation has been provided on straight- line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. All buildings have been depreciated at the rate 3.34%. Accessories/power control units, wherever they are attached to the machines, have been depreciated at the same rate applicable for machinery. All electrical equipments including fans, air circulators and air conditioners have been depreciated at the rate of 7.07%. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past. For assets of value less than Rs. 5,000/- acquired during the year, 100% depreciation has been provided.

(F) Taxation : Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

(G) Inventory Valuation :

1) Raw Material: At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is lower (inclusive of Excise Duty)

4) Work - in Progress At estimated cost

5) ScrapAA/aste At estimated Cost or net realisable value whichever is lower (inclusive of Excise Duty, wherever Applicable).

(H) Employee Benefits : The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

(I) Foreign Exchange Transactions : The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered (or speculative purposes.

(J) Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

(K) investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

(L) Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will he an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(M) Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

(N) Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

(O) Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for inter Segment Revenue/Adjustments, as has been done in the past.

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Mar 31, 2010

(A) System of Accounting : The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

(B) Use of Estimates : The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

(C) Recognition of Income and Expenditure : Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

(D) Fixed Assets / Borrowing Costs : Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

(E) Depreciation : Depreciation has been provided on straight- line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956.

All buildings have been depreciated at the rate 3.34%. Accessories/power control units, wherever they are attached to the machines, have been depreciated at the same rate applicable for machinery. All electrical equipments including fans, air circulators and air conditioners have been depreciated at a rate of 7.07%. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past. For assets of value less than Rs. 5,000/- acquired during the year, 100% depreciation has been provided.

(F) Taxation : Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

(G) Inventory Valuation :



1) Raw Material : At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is

lower (inclusive of Excise Duty)

4) Work - in Progress At estimated cost

5) Scrap/ Waste At estimated Cost or net realisable value

whichever is lower (inclusive of Excise Duty, wherever Applicable).

(H) Employee Benefits : The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

(I) Foreign Exchange Transactions : The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

(J) Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

(K) Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

(L) Provisions, contingent liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(M) Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

(N) Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

(O) Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy.

Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

The products manufactured by the Company do not require any industrial license as per the current industrial policy and hence there is no restriction on the maximum capacity that the Company can produce. The installed capacity also varies depending on the level of subcontracting work and outsourcing of components. Hence the data on licensed and installed capacities has not been furnished.