Accounting Policies of Eastern Silk Industries Ltd. Company

Mar 31, 2025

i) Basis of preparation and presentation of financial statements in compliance
with Ind AS.:

The financial statements have been prepared in accordance with Indian
Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting
Standards) Rules, 2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2016, as applicable.

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

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

2) assets held for sale - measured at lower of carrying amount or fair value less
cost to sell;

3) defined benefit plans - plan assets measured at fair value

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:

In addition, for financial reporting purposes, fair value measurements are
categorised 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, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities that the entity can access at the measurement date;

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

Level 3 inputs are unobservable inputs for the asset or liability.

All assets and liabilities have been classified as current or non-current as per the
Company’s normal operating cycle (twelve months) and other criteria set out in the
Schedule III to the Act. All amounts disclosed in the financial statements and
notes have been rounded off to the nearest lakhs as per the requirement of
Schedule III, unless otherwise stated*

ii) Functional and presentation Currency

These Ind AS Financial Statements are prepared in Indian Rupee which is the
Company''s functional currency. All financial information presented in Rupees has
been rounded to the nearest lakhs with two decimals.

iii) Use of Estimates :

The preparation of financial statements requires estimates and assumptions to be
made based on the current working that affect the reported amount of assets and
liabilities (including contingent liabilities) on the date of financial statements and
the reported amount of revenues and expenses for the reporting period. Difference
between the actual and the estimates, if any, are accounted for in the period in
which such differences are known/materialized.

The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.

The following are the key assumptions 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:

a) Useful life of property, plant and equipment: The Company reviews the useful

_________ life of property, plant and equipment at the end of each reporting period. This

assessment may result in change in the depreciation expense in future periods.

b) Deferred tax assets: The carrying“amount of deferred tax asset is reviewed at
each-reporting period and is reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.

c) Employee Benefits: The cost of defined benefit plans are determined using
actuarial valuations. The actuarial valuation involves making assumptions about
discount rates, expected rates of return on assets, future salary increases,
mortality rates and future pension increases. Due to the long-term nature of these
plans, such estimates are subject to significant uncertainty.

d) Trade Receivables: Furthermore, the management believe that the net carrying
amount of trade receivables is recoverable based on their past experience in the
market and their assessment of the credit worthiness of debtors at Balance Sheet
date. Such estimates are inherently imprecise and there may be additional
information about one or more debtors that the management are not aware of,
which could significantly affect their estimations.

e) Provisions & Liabilities: Provisions and liabilities are recognized in the period
when it becomes probable that there will be a future outflow of funds resulting
from past operations or events that can reasonably be estimated. The timing of
recognition requires application of judgement to existing facts and circumstances
which may be subject to change. The amounts are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific

f) Contingencies: In the normal course of business, contingent liabilities may arise
from litigation and other claims against the Company. Potential liabilities that are
possible but not probable of crystalsing or are very difficult to quantify reliably are
treated as contingent liabilities. Such liabilities are disclosed in the notes but are
not recognized.

iv) Property* plant and equipment:

Property, plant and equipment are stated at its purchase price including direct
expenses, finance cost till it is put to use net of recoverable taxes. If the Property,
plant and equipment are revalued then they are stated at revalued amount.
Accumulated depreciation, impairment loss, if any, is reduced from the Property,
plant and equipment and shown under the net asset value on the reporting date.
The cost including additions, improvements, renewals, revalued amount and
accumulated depreciation of assets which are sold and/or discarded and/or
impaired, are removed from the fixed assets and any profit or loss resulting there
from is included in the Statement of Profit & Loss and the residual value of the
revalued amount is withdrawn from such reserves created for the purpose through
Other Comprehensive Income,

Capital Work in progress includes cost of property, plant and equipment under
installation/under development as at the Balance Sheet date.

v) Leased Assets :

On account of adoption of Ind AS 116, the company as a lessee has reclassified
the leasehold, land as_ Right_of Use Assets “ROU Asset”. The Company depreciates
the right of use asset on a straight-line basis from the lease commencement date
to the earlier of the end of the useful fife of the right of use asset or the end of the
lease term “The Company also assesses the right of use asset for impairment any indicators exist ——

However, earlier to adoption of Ind AS 116, Leased assets are stated at premium
paid on such assets. Rentals, if any, are expensed with reference to the lease
terms and other conditions. No amortization of the lease premium in respect of
Land is done in cases where conditions are stipulated for conversion from
leasehold to freehold,

vi) Depreciation methods, estimated useful lives and residual value :

Depreciation is calculated on all the Property, plant & equipments based on the
method prescribed under Schedule II of the Companies Act, 2013. Depreciation on
the assets hitherto calculated on Written Down Value/Straight Line method is
charged based on the remaining useful life of the assets as prescribed under the
Act. Depreciation on assets added w.e.f. 01st April, 2014 is provided as per
Straight Line Method on the basis of useful life of the assets as prescribed under
the said Schedule and on pro rata basis. Depreciation on the assets disposed
off/impaired during the year is provided on pro-rata basis.

Depreciation on the revalued assets (if any) is calculated at the rates prescribed
under Schedule II of the Act and such depreciation is adjusted through Other
Comprehensive Income & Revaluation Surplus.

vi) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its
recoverable value being higher of value in use and net selling price* Value in use is
computed at net present value of cash flow expected over the balance useful life of
the assets. An impairment loss is recognized as an expense in the Statement of
Profit & Loss in the year in which an asset is identified as impaired. In case of
impaired revalued assets, the impaired loss on the residual value is withdrawn
from such reserves created for the purpose through Other Comprehensive Income.
The impairment loss recognized in earlier accounting period is reversed if there
has been an improvement in recoverable amount.

viii)—Foreign Currency Transactions & Translations :

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

b) Transactions denominated in foreign currencies are recorded at the exchange
rate prevailing on the date of transaction*

c) Year-end balance of assets and liabilities in foreign currencies are translated at
—the. year-end rates and difference between-rear-end balance and such restated

balance are dealt in under Exchange rate difference in the profit and loss
statement.

d) The difference arising out of the actual settlement on realization / payment are
dealt with in the Statement of Profit & Loss under Exchange Rate Difference
arising on such transactions.

ix) Financial instruments

i) Financial Assets

A. Initial recognition and measurement: All financial assets and liabilities are
initially recognized at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities, which are not
at fair value through profit or loss, are adjusted to the fair value on initial
recognition. Purchase and sale of financial assets are recognised using trade date
accounting.

B. Subsequent measurement: _

a) Financial assets carried at amortised cost (AC): A financial asset is measured at
amortised cost if it is held within a business model whose

asset in order to collect contractual cash flows and the contractual terms of the

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

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

c) Financial assets at fair value through profit or loss (FVTPL): A financial asset
which is not classified in any of the above categories are measured at FVTPL.

C. Investments; Equity oriented investments are measured at fair value, with value
changes recognised in ''Other Comprehensive Incomet Whereas investments other
than equity are measured at cost.

ii) Financial Liabilities

A. Initial recognition and measurement: All financial liabilities are recognized at
fair value and in case of loans, net of directly attributable cost. Fees of recurring
nature are directly recognised in the Statement of Profit and Loss as finance cost.

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

iii) Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset "expire or it transfers the financial asset and the"
transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part
of a financial liability) is derecognized from the Company''s Balance Sheet when the
obligation specified in_the contract is. discharged or cancelled or expires.

*) Inventories:

Items of inventories such as raw materials and Stock-in-Trade, Finished Goods
are measured at lower of cost or net realizable value after providing for
obsolescence if any. Work-in-progress is valued at estimated cost and stocks &
spare parts, dyes & chemicals, packing materials etc. are valued at cost on
weighted average basis.

Work-in-progress comprises of cost of purchase, cost of conversion and other
costs including manufacturing overheads incurred in bringing them in their
present condition.

d) Revenue Recognition :

Revenue from sale of goods is recognised when the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated cost can be estimated reliably, there is no continuing
effective control or managerial involvement with the goods, and the amount of
revenue can be measured reliably.

Revenue from rendering of services is recognised when the
performance Contractual task has been completed.

Revenue from sale of goods is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment
and excluding taxes or duties collected on behalf of the government.

Export benefits entitlement to the Company such as Duty Drawback, DEPB, DFIA
etc is recognized in the year of export on accrual basis wherever it is ascertainable
with reasonable accuracy*

Revenue from operations includes sale of goods, services, export benefit
entitlement and adjusted for discounts (net) if any.

Interest income

Interest income from a financial asset is recognised using effective interest rate
method*

Dividends

Revenue is recognised when the Company''s right to receive the payment has been
established*

Others

Earnest deposits from customers are recognized as Revenue on obligatory failures.

xii) Employee Benefits :

a) Short-term Employee Benefits

Short-term Employee Benefits (i.e, benefits payable within one year) are
recognized in the period in which employee services are rendered.

b) Post employment Benefits

1) Defined Contribution Plans

Contributions towards provident fund are made to government
administered provident fund towards which the Company has no further
obligations beyond its monthly contributions.

Contribution to Central Government administered Employees'' State
Insurance Scheme for eligible employees are recognized as charge.

2) Defined Benefit Plans

Liability towards gratuity, covering eligible employees is provided and
funded through LIC managed Group Gratuity Policy on the basis of year
end actuarial valuation.

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

3) Other Benefits

Accrued liability towards Leave encashment benefits, covering eligible
employees, evaluated on the basis of year-end actuarial valuation is
recognized as a charge. Remeasurements as a result of experience
adjustments and changes in actuarial assumptions are recognised in the
Statement of Profit and Loss,

xiii) Borrowing Cost :

Borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalized as part of the cost of that asset.

Other borrowing costs are recognized as an expense in the period in which they
are incurred. Capitalization of borrowing costs ceases when the qualifying asset
is ready for intended use .

xiv) Tax Expense :

Tax Expense for the period are recognised in profit or loss, except when they are
relating to items that are recognised in other comprehensive income or directly in
equity, in which case, the tax expenses are also recognized in other
comprehensive income or directly in equity respectively

- Current tax: Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities, based on tax
rates and laws that are enacted or substantively enacted at the Balance sheet
date.

- Deferred tax: Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected
to apply in the period in which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted or substantively enacted by
the end of the reporting period. The carrying amount of deferred tax liabilities
and assets are reviewed at the end of each reporting period.

xv) Earning per Share :

Basic earning per share is calculated by dividing the net Profit for the year
attributable to‘ equity''shareholders(after deducting the dividend on redeemable““
preference share) by the weighted-average number of equity shares outstanding
during the year.

Diluted earning per share is calculated by dividing the net profit attributable to

equity shareholders (after deducting the dividend on redeemable preference _

share) by weighted average number of equity shares outstanding during the year
after adjusting for the effects of dilutive options.

xvi) Events occurring after Balance Sheet Date :

Events occurring after the balance sheet date have been considered in the
preparation of financial statements.

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Mar 31, 2015

I) Basis of Accounting :

The financial statements are prepared under the historical cost convention using accrual method of accounting in accordance with the generally accepted accounting principles in India, unless otherwise stated.

ii) Use of Estimates :

The preparation of financial statements requires estimates and assumptions to be made based on the current working that affect the reported amount of assets and liabilities (including contingent liabilities) on the date of financial statements and the reported amount of revenues and expenses for the reporting period. Difference between the actual and the estimates, if any, are accounted for in the period in which such differences are known/materialized.

iii) Fixed Assets :

Fixed assets are stated at its purchase price including direct expenses, finance cost till it is put to use net of recoverable taxes. If the fixed assets are revalued then they are stated at revalued amount. Accumulated depreciation, impairment loss, if any, is reduced from the fixed assets and shown under the net asset value on the reporting date. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded and/or impaired, are removed from the fixed assets and any profit or loss resulting there from is included in the Statement of Profit & Loss and the residual value of the revalued amount is withdrawn from such reserves created for the purpose.

iv) Leased Assets :

Leased assets are stated at premium paid on such assets. Rentals, if any, are expensed with reference to the lease terms and other conditions. No amortization of the lease premium in respect of Land is done in cases where conditions are stipulated for conversion from leasehold to freehold.

v) Depreciation :

Depreciation is calculated on all the fixed assets based on the method prescribed under Schedule II of the Companies Act, 2013. Depreciation on the assets hitherto calculated on Written Down Value/Straight Line method is charged based on the remaining useful life of the assets as prescribed under the Act. Depreciation on the assets added/disposed off/impaired during the year is provided on pro-rata basis.

Depreciation on the revalued assets is calculated at the rates prescribed under Schedule II of the Act and such depreciation is withdrawn from capital reserve.

vi) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Statement of Profit & Loss in the year in which an asset is identified as impaired. In case of impaired revalued assets, the impaired loss on the residual value is withdrawn from such reserves created for the purpose. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

vii) Capital Work-in-Progress :

Capital work-in-progress is stated at cost which includes expenses incurred during the construction period, interest on account of borrowed money for acquisition of assets and other expenses incurred in connection with project implementation so far as such expenses related to the assets prior to the commencement of the commercial production.

viii) Foreign Currency Transactions :

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

b) Year end balance of assets and liabilities in foreign currencies are translated at the year-end rates and difference between year-end balance and such restated balance are dealt in under Exchange rate difference in the profit and loss statement.

c) The difference arising out of the actual settlement on realization / payment are dealt with in the Statement of Profit & Loss under Exchange Rate Difference arising on such transactions.

d) The Company uses foreign currency forward contract and currency options to hedge its risks associated with foreign currency fluctuation relating to certain firm commitments and forecasted transactions. The Company designates this hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 'Financial Instruments: Recognition and Measurement' (AS-30). Profit/loss over and above the hedged/forecasted amounts are accounted for in the Statement of Profit & Loss in the year of maturity.

ix) Investments :

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category-wise.

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

x) Inventories:

Items of inventories such as raw materials and Stock-in-Trade, Finished Goods are measured at lower of cost or net realizable value after providing for obsolescence if any. Work-in-progress is valued at estimated cost and stocks & spare parts, dyes & chemicals, packing materials etc. are valued at cost.

Work-in-progress comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them in their present condition.

xi) Revenue Recognition :

Revenue is recognized only when it can be definitely measured and it is reasonable to expect final collection. Revenue from operations includes sale of goods after adjustment of discounts (net) and return of goods. Earnest deposits from customers are recognized as Revenue on obligatory failures. Export benefit entitlement to the Company under Drawback, DEPB, DfIA is recognized in the year of export on accrual basis wherever it is ascertainable with reasonable accuracy.

Dividend income is recognized on actual receipt basis.

xii) Employee Benefits :

a) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post employment Benefits

1) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trust administered by the Company, the interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

2) Defined Benefit Plans

Liability towards gratuity, covering eligible employees is provided and funded through LIC managed Group Gratuity Policy on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees' State Insurance Scheme for eligible employees are recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized in the Statement of Profit and Loss as income/expense for the year in which they occur.

xiii) Borrowing Cost :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when the qualifying asset is ready for intended use .

xiv) Deferred Taxation :

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

xv) Earning per Share :

Basic earning per share is calculated by dividing the net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by weighted average number of equity shares outstanding during the year after adjusting for the effects of dilutive options.

xvi) Events occurring after Balance Sheet Date :

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

xvii) Contingent Liabilities :

Unprovided liabilities of contingent nature are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

xviii) Research & Development Expenditure :

a) Capital Expenditure is included in Fixed Assets and depreciation is provided as per Schedule II of the Companies Act, 2013.

b) Revenue Expenditure is charged in the Statement of Profit & Loss during the year in which they are incurred.

xix) Cash Flow Statement :

The Company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalents consists of Cash on Hand, Cash at Bank, Term Deposits & Cheques in Hand.

a) There is no change/movement in number of shares outstanding at the beginning and at the end of the reporting period.

b) The Company has two class of issued shares i.e. Equity Shares of Rs. 2/- each and Redeemable Cumulative Preference Shares of Rs. 100/- each. Every Equity Share is entitled to one vote and equal right for dividend after payment of preference dividend to preference share holders. The dividend proposed by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting,except in case of interim dividend. In the event of liquidation,the share holders are eligible to receive the remaining assets of the Company after payment of all preferential amounts in proportion to their shareholding.

c) The Company does not have any Holding Company.

d) Details of shareholders holding more than 5% shares in the Company.

e) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

f) No shares have been allotted or has been bought back by the Company during the 5 years preceding the date at which Balance Sheet is prepared.

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Mar 31, 2014

I) Basis of Accounting :

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 and wherever applicable as per the provisions of the Companies Act, 2013.

ii) Use of Estimates :

The preparation of financial statements requires estimates and assumptions to be made based on the current working that affect the reported amount of assets and liabilities (including contingent liabilities) on the date of financial statements and the reported amount of revenues and expenses for the reporting period. Difference between the actual and the estimates, if any, are accounted for in the period in which such differences are known/materialized.

iii) Fixed Assets :

Fixed assets are stated at its purchase price including direct expenses, finance cost till it is put to use net of recoverable taxes. If the fixed assets are revalued then they are stated at revalued amount. Accumulated depreciation, impairment loss, if any, is reduced from the fixed assets and shown under the net asset value on the reporting date. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded and/or impaired, are removed from the fixed assets and any profit or loss resulting there from is included in the Statement of Profit & Loss and the residual value of the revalued amount is withdrawn from such reserves created for the purpose.

iv) Leased Assets :

Leased assets are stated at premium paid on such assets. Rentals, if any, are expensed with reference to the lease terms and other conditions. No amortization of the lease premium in respect of Land is done in cases where conditions are stipulated for conversion from leasehold to freehold.

v) Depreciation and Amortization :

Depreciation is provided on Written Down Value method except for Unit 1 & Unit 3 which are provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation of the assets added / disposed off / impaired during the year is provided on pro-rata basis.

Depreciation on revalued assets is provided on Straight Line Method over the residual life of the respective assets. The charge for depreciation on account of revaluation is withdrawn from capital reserve.

Wherever amortization charges are required to be provided, the same is done over the useful life of the underlying assets based on technical evaluation.

vi) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Statement of Profit & Loss in the year in which an asset is identified as impaired. In case of impaired revalued assets, the impaired loss on the residual value is withdrawn from such reserves created for the purpose. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

vii) Capital Work-in-Progress :

Capital work-in-progress is stated at cost which includes expenses incurred during the construction period, interest on account of borrowed money for acquisition of assets and other expenses incurred in connection with project implementation so far as such expenses related to the assets prior to the commencement of the commercial production.

viii) Foreign Currency Transactions :

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

b) Year end balance of assets and liabilities in foreign currencies are translated at the year end rates and difference between year end balance and such restated balance are dealt in under Exchange rate difference in the profit and loss statement.

c) The difference arising out of the actual settlement on realization / payment are dealt with in the Statement of Profit & Loss under Exchange Rate Difference arising on such transactions.

d) The Company uses foreign currency forward contract and currency options to hedge its risks associated with foreign currency fluctuation relating to certain firm commitments and forecasted transactions. The Company designates this hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 ''Financial Instruments: Recognition and Measurement'' (AS-30). Profit/loss over and above the hedged/forecasted amounts are accounted for in the Statement of Profit & Loss in the year of maturity.

ix) Investments :

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category-wise.

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

x) Inventories:

Items of inventories such as raw materials and Stock-in-Trade, Finished Goods are measured at lower of cost or net realizable value after providing for obsolescence if any. Work-in-progress is valued at estimated cost and stocks & spare parts, dyes & chemicals, packing materials etc. are valued at cost.

Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them in their present condition. Cost of raw materials, stock in process, stock in trade and finished goods are determined on average cost basis.

xi) Revenue Recognition :

Revenue is recognized only when it can be definitely measured and it is reasonable to expect final collection. Revenue from operations includes sale of goods after adjustment of discounts (net) and return of goods. Export benefit entitlement to the Company under Drawback, DEPB, DFIA is recognized in the year of export on accrual basis wherever it is ascertainable with reasonable accuracy.

Dividend income is recognized on actual receipt basis.

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

xii) Employee Benefits :

a) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post employment Benefits

1) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trust administered by the Company, the interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

2) Defined Benefit Plans

Liability towards gratuity, covering eligible employees is provided and funded through LIC managed Group Gratuity Policy on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

xiii) Borrowing Cost :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when the qualifying asset is ready for intended use .

xiv) Deferred Taxation :

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

xv) Earning per Share :

Basic earning per share is calculated by dividing the net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by weighted average number of equity shares outstanding during the year after adjusting for the effects of dilutive options.

xvi) Events occurring after Balance Sheet Date :

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

xvii) Contingent Liabilities :

Unprovided liabilities of contingent nature are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

xviii) Research & Development Expenditure :

a) Capital Expenditure is included in Fixed Assets & Capital Work-in-Progress and depreciation is provided at the respective applicable rates.

b) Revenue Expenditure is charged in the year in which they are incurred.

xix) Cash Flow Statement :

The Company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalents consists of Cash on Hand, Cash at Bank.

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Mar 31, 2013

I) Basis of Accounting :

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

ii) Use of Estimates :

The preparation of financial statements requires estimates and assumptions to be made based on the current working that affect the reported amount of assets and liabilities (including contingent liabilities) on the date of financial statements and the reported amount of revenues and expenses for the reporting period. Difference between the actual and the estimates, if any, are accounted for in the period in which such differences are known/materialized.

iii) Fixed Assets :

Fixed assets are stated at its purchase price including direct expenses, finance cost till it is put to use net of recoverable taxes. If the fixed assets are revalued then they are stated at revalued amount. Accumulated depreciation, impairment loss, if any, is reduced from the fixed assets and shown under the net asset value on the reporting date. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded and/or impaired, are removed from the fixed assets and any profit or loss resulting there from is included in the Statement of Profit & Loss and the residual value of the revalued amount is withdrawn from such reserves created for the purpose.

iv) Leased Assets :

Leased assets are stated at premium paid on such assets. Rentals, if any, are expensed with reference to the lease terms and other conditions. No amortization of the lease premium in respect of Land is done in cases where conditions are stipulated for conversion from leasehold to freehold.

v) Depreciation and Amortization :

Depreciation is provided on Written Down Value method except for Unit 1 & Unit 3 which are provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation of the assets added / disposed off / impaired during the year is provided on pro-rata basis.

Depreciation on revalued assets is provided on Straight Line Method over the residual life of the respective assets. The charge for depreciation on account of revaluation is withdrawn from capital reserve.

Wherever amortization charges are required to be provided, the same is done over the useful life of the underlying assets based on technical evaluation.

vi) Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Statement of Profit & Loss in the year in which an asset is identified as impaired. In case of impaired revalued assets, the impaired loss on the residual value is withdrawn from such reserves created for the purpose. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

vii) Capital Work-in-Progress :

Capital work-in-progress is stated at cost which includes expenses incurred during the construction period, interest on account of borrowed money for acquisition of assets and other expenses incurred in connection with project implementation so far as such expenses related to the assets prior to the commencement of the commercial production.

viii) Foreign Currency Transactions :

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

b) Year end balance of assets and liabilities receivables / payables in foreign currency is translated at the year end rates.

c) The difference arising out of the actual settlement on realization / payment are dealt with in the Statement of Profit & Loss under Exchange Rate Difference arising on such transactions.

d) The Company uses foreign currency forward contract and currency options to hedge its risks associated with foreign currency fluctuation relating to certain firm commitments and forecasted transactions. The Company designates this hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 ''Financial Instruments: Recognition and Measurement'' (AS-30). Profit/loss over and above the hedged/forecasted amounts are accounted for in the Statement of Profit & Loss in the year of maturity.

ix) Investments :

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category-wise.

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

x) Inventories:

Items of inventories such as raw materials and Stock-in-Trade, Finished Goods are measured at lower of cost or net realizable value after providing for obsolescence if any. Work-in-progress is valued at estimated cost and stocks & spare parts, dyes & chemicals, packing materials etc. are valued at cost.

Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them in their present condition. Cost of raw materials, stock in process, stock in trade and finished goods are determined on average cost basis.

xi) Revenue Recognition :

Revenue is recognized only when it can be definitely measured and it is reasonable to expect final collection.

Revenue from operations includes sale of goods after adjustment of discounts (net) and return of goods.

Export benefit entitlement to the Company under Drawback, DEPB, DFIA is recognized in the year of export on accrual basis wherever it is ascertainable with reasonable accuracy.

Dividend income is recognized on actual receipt basis. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate Applicable.

xii) Employee Benefits :

a) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post employment Benefits

1) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trust administered by the Company, the interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

2) Defined Benefit Plans

Liability towards gratuity, covering eligible employees is provided and funded through LIC managed Group Gratuity Policy on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

xiii) Borrowing Cost :

Borrowing3 costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when the qualifying asset is ready for intended use .

xiv) Deferred Taxation :

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

xv) Earning per Share :

Basic earning per share is calculated by dividing the Net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the Net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by weighted average number of equity shares outstanding during the year after adjusting for the effects of dilutive options.

xvi) Events occurring after Balance Sheet Date :

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

xvii) Contingent Liabilities :

Unprovided liabilities of contingent nature are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

xviii) Research & Development Expenditure :

a) Capital Expenditure is included in Fixed Assets & Capital Work-in-Progress and depreciation is provided at the respective applicable rates.

b) Revenue Expenditure is charged in the year in which they are incurred.

xix) Cash Flow Statement :

The Company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalents consists of Cash on Hand, Cash at Bank.

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Mar 31, 2012

I) Basis of Accounting:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

ii) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made based on the current working, that affect the reported amount of assets and liabilities (including contingent liabilities) on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates, if any, are accounted for in the period in which such differences are known/materialized.

iii) Fixed Assets:

Fixed assets are stated at cost net of recoverable taxes, if any, and if revalued at the revalued amount. Accumulated depreciation, impairment loss, if any, is reduced from the fixed assets and shown under the net asset value on the reporting date. Cost of assets comprise its purchase price, direct expenses incurred including finance cost till it is put to use and the revalued amount if any. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded and/or impaired, are removed from the fixed assets and any profit or loss resulting there from is included in the Statement of Profit & Loss.

iv) Leased Assets:

Leased assets are stated at premium paid on such assets. Rentals, if any, are expensed with reference to the lease terms and other conditions. No amortization of the lease premium in respect of Land is done in cases where conditions are stipulated for conversion from leasehold to freehold.

v) Depreciation and Amortization :

Depreciation is provided on Written Down Value method except for Unit 1 & Unit 3 which are provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation of the assets added/disposed off/impaired during the year is provided on pro-rata basis.

Depreciation on revalued assets is provided on Straight Line Method over the residual life of the respective assets as estimated by valuer. The charge for depreciation on account of revaluation is withdrawn from capital reserve.

Wherever amortization charges are required to be provided, the same is done over the useful life of the underlying assets based on technical evaluation.

vi) Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

vii) Capital Work-in-Progress:

Capital work-in-progress is stated at cost which includes expenses incurred during the construction period, interest on account of borrowed money for acquisition of assets and other expenses incurred in connection with project implementation so far as such expenses related to the assets prior to the commencement of the commercial production.

viii) Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction

b) Yearend balance of foreign currency transaction is translated at the year end rates.

c) The difference arising out of the actual settlement on realization / payment are dealt with in the Statement of Profit & Loss under Exchange Rate Difference arising on such transactions.

d) The Company uses foreign currency forward contract and currency options to hedge its risks associated with foreign currency fluctuation relating to certain firm commitments and forecasted transactions. The Company designates this hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 'Financial Instruments: Recognition and Measurement' (AS-30). Profit/loss over and above the hedged/forecasted amounts are accounted for in the Statement of Profit & Loss in the year of maturity.

ix) Investments:

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category-wise.

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

x) Inventories:

Items of inventories such as raw materials and Stock-in-Trade, Finished Goods are measured at lower of cost or net realizable value after providing for obsolescence if any. Work-in-progress is valued at estimated cost and stocks & spare parts, dyes & chemicals, packing materials etc. are valued at cost.

Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them in their present condition. Cost of raw materials, stock in process, stock in trade and finished goods are determined on average cost basis.



xi) Revenue Recognition:

Revenue is recognized only when it can be definitely measured and it is reasonable to accept final collection. Revenue from operations includes sale of goods after adjustment of discounts (net) and return of goods. Export benefit entitlement to the Company under Drawback, DEPB, DFIA is recognized in the year of export on accrual basis wherever it is ascertainable with reasonable accuracy.

Dividend income is recognized on actual receipt basis.

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

xii) Employee Benefits:

a) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post employment Benefits

1) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trust administered by the Company, the interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

2) Defined Benefit Plans

Liability towards gratuity, covering eligible employees, is provided and funded on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees' State Insurance Scheme for eligible employees are recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

xiii) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when substantially all activities necessary to prepare the qualifying asset for its intended use or sale are complete.

xiv) Deferred Taxation:

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

xv) Earning per Share :

Basic earning per share is calculated by dividing the Net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by weighted average number of equity shares outstanding during the year after adjusting for the effects of dilutive options.

xvi) Events occurring after Balance Sheet Date:

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

xvii) Contingent Liabilities:

Un provided contingent liabilities are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

xviii) Research & Development Expenditure :

a) Capital Expenditure is included in Fixed Assets & Capital Work-in-Progress and depreciation is provided at the respective applicable rates.

b) Revenue Expenditure is charged off in the year in which they are incurred.

xix) Cash Flow Statement:

The Company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalents consists of Cash in Hand, Cash at Bank & Cheques in Hand.

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Mar 31, 2011

1 A. Basis of Accounting

The Company adopts the mercantile system of accounting and recognizes income and expenditure on accrual basis in accordance with the applicable accounting standards. Export incentives, insurance and other claims, has been accounted for to the extent quantum thereof is ascertainable with reasonable accuracy.

B. Fixed Assets

Fixed assets are stated at original cost, if revalued at revalued amount, less depreciation. The cost of assets comprise its purchase price, direct expenses incurred including finance costs till it is put to use and the revalued amount, if any. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded, are removed from the Fixed Assets and any profit or loss resulting there from is included in the Profit & Loss Account.

C. Depreciation

Depreciation is provided for on written down value method, except for Unit 1 & Unit 3 which is provided on Straight Line Method, at the rates prescribed under Schedule XIV of the Companies Act, 1956. Depreciation on the Assets added/disposed off during the year is being provided on pro-rata basis.

Depreciation on revalued assets is calculated on straight line method over the residual life of the respective assets as estimated by the valuer. The charge for depreciation on account of revaluation is withdrawn from capital reserve.

D. Foreign Currency Transactions, Derivatives instruments and hedge accounting

Transactions in foreign currency other than those covered by forward contracts are accounted for at the prevailing conversion rates on the date of transaction and difference arising out of the settlement are dealt with in the Profit & Loss account. Outstanding export documents when covered by foreign exchange forward contracts are translated at contracted rates. Foreign currency loans availed for acquisition of fixed assets are restated at the exchange rate prevailing at year end and exchange rate difference arising on such transactions are adjusted in the Profit & Loss Account. Other foreign currency current assets and liabilities outstanding at the close of the year are valued at the year end exchange rates. The fluctuations are reflected under the appropriate revenue head. The company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 'Financial Instruments: Recognition and Measurement' (AS-30). Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognized directly in shareholders'funds and the effective portion is recognized in profit & loss account. Changes in the fair value of derivatives financial instruments that do not qualify for hedge accounting are recognized in profit & loss account as they arise.

Hedge accounting is discontinued when the hedging instruments expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time for forecasted transactions, any cumulative gain or loss on the hedging instrument recognized in Reserves & Surplus is retained there until the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in shareholder's funds is transferred to profit & loss account for the year.

E. Expenditure during Construction Period

Expenditure during construction period is included under Capital Work-in-Progress and the same is allocated to the respective fixed assets on the completion of construction /erection /installation/ production.

F. Valuation of Investments

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

G. Valuation of Inventories

Raw Materials and Finished Goods are valued at lower of cost or net realisable value. Work-in-progress is valued at estimated cost.

Stores & spares parts, Dyes & chemicals, Packing materials are valued at cost. Cost of inventories is ascertained at FIFO/Weighted average cost.

H. Employee Benefits

i) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

ii) Post employment Benefits

a) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trusts administered by the Company, the interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to employer established provident funds (other than covered employees)/government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

b) Defined Benefit Plans

Liability towards gratuity, covering eligible employees, is provided and funded on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees' State Insurance Scheme for eligible employees are recognized as charge.

Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Profit and Loss Account as income/expense for the year in which they occur.

I. Miscellaneous Expenditure

Expenses related to issue of fresh capital are being amortized over a period of 10 years.

J. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalisation of borrowing costs ceases when substantially all activities necessary to prepare the qualifying asset for its intended use or sale are complete.

K. Deferred Taxation

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

L. Earning Per Share

Basic earning per share is calculated by dividing the net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year (adjusted for the effects of dilutive options).

M. Events occurring after Balance Sheet Date

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

N. Contingent Liabilities

Unprovided contingent liabilities are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

O. Research & Development Expenditure

(a) Capital Expenditure is included in Fixed Assets & Capital Work-in-Progress and depreciation is provided at the respective applicable rates.

(b) Revenue Expenditure is charged off in the year in which they are incurred.

P. Cash Flow Statement

The company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalent consists of Cash in Hand, Cash at Bank & Cheques in Hand.

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Mar 31, 2010

1 A. Basis of Accounting

The Company adopts the mercantile system of accounting and recognizes income and expenditure on accrual basis in accordance with the applicable accounting standards. Export incentives, insurance and other claims, has been accounted for to the extent quantum thereof is ascertainable with reasonable accuracy.

B. Fixed Assets

Fixed assets are stated at original cost, if revalued at revalued amount, less depreciation. The cost of assets comprise its purchase price, direct expenses incurred including finance costs till it is put to use and the revalued amount, if any. The cost including additions, improvements, renewals, revalued amount and accumulated depreciation of assets which are sold and/or discarded, are removed from the Fixed Assets and any profit or loss resulting there from is included in the Profit & Loss Account.

C. Depreciation

Depreciation is provided for on written down value method, except for Unit 1 & Unit 3 which is provided on Straight Line Method, at the rates prescribed under Schedule XIV of the Companies Act, 1956. Depreciation on the Assets added/disposed off during the year is being provided on pro-rata basis.

Depreciation on revalued assets is calculated on straight line method over the residual life of the respective assets as estimated by the valuer. The charge for depreciation on account of revaluation is withdrawn from capital reserve.

D. Foreign Currency Transactions, Derivatives instruments and hedge accounting Transactions in foreign currency other than those covered by forward contracts are accounted for at the prevailing conversion rates on the date of transaction and difference arising out of the settlement are dealt with in the Profit & Loss account. Outstanding export documents when covered by foreign exchange forward contracts are translated at contracted rates. Foreign currency loans availed for acquisition of fixed assets are restated at the exchange rate prevailing at year end and exchange rate difference arising on such transactions are adjusted in the Profit & Loss Account. Other foreign currency current assets and liabilities outstanding at the close of the year are valued at the year end exchange rates. The fluctuations are reflected under the appropriate revenue head.

The company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 ‘Financial Instruments: Recognition and Measurement (AS-30).

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognized directly in shareholders funds and the effective portion is recognized in profit & loss account.

Changes in the fair value of derivatives financial instruments that do not qualify for hedge accounting are recognized in profit & loss account as they arise.

Hedge accounting is discontinued when the hedging instruments expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time for forecasted transactions, any cumulative gain or loss on the hedging instrument recognized in Reserves & Surplus is retained there until the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in shareholders funds is transferred to profit & loss account for the year.

E. Expenditure during Construction Period

Expenditure during construction period is included under Capital Work-in-Progress and the same is allocated to the respective fixed assets on the completion of construction/erection/installation/production.

F. Valuation of Investments

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

G. Valuation of Inventories

Raw Materials and Finished Goods are valued at lower of cost or net realisable value. Work-in-progress is valued at estimated cost.

Stores & spares parts, Dyes & chemicals, Packing materials are valued at cost. Cost of inventories is ascertained at FIFO/Weighted average cost.

H. Employee Benefits

i) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

ii) Post employment Benefits

a) Defined Contribution Plans

Contributions towards provident funds are recognized as expense. Provident fund contributions in respect of certain employees are made to Trusts administered by the Company, the interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any, is made good by the Company. The remaining provident fund contributions are made to employer established provident funds (other than covered employees)/government administered provident fund towards which the Company has no further obligations beyond its monthly contributions.

b) Defined Benefit Plans

Liability towards gratuity, covering eligible employees, is provided and funded on the basis of year end actuarial valuation.

Accrued liability towards Leave encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarial valuation is recognized as a charge.

Contribution to Central Government administered Employees State Insurance Scheme for eligible employees are recognized as charge. Actuarial gains/losses arising in Defined Benefit Plans are recognized immediately in the Profit and Loss Account as income/expense for the year in which they occur.

I. Miscellaneous Expenditure

Expenses related to issue of fresh capital are being amortized over a period of 10 years.

J. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalisation of borrowing costs ceases when substantially all activities necessary to prepare the qualifying asset for its intended use or sale are complete.

K. Deferred Taxation

Deferred Taxation is provided using the liability method in respect of taxation effect arising from material timing difference between the accounting and tax treatment of Income & Expenditure based on tax rates prevailing at the time of Balance Sheet date. Deferred Taxation so provided is reviewed at each Balance Sheet date for necessary adjustments.

L. Earning Per Share

Basic earning per share is calculated by dividing the net Profit for the year attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is calculated by dividing the net profit attributable to equity shareholders (after deducting the dividend on redeemable preference share) by the weighted average number of equity shares outstanding during the year (adjusted for the effects of dilutive options).

M. Events occurring after Balance Sheet Date

Events occurring after the balance sheet date have been considered in the preparation of financial statements.

N. Contingent Liabilities

Unprovided contingent liabilities are disclosed in the accounts by way of notes giving nature and quantum of such liabilities.

O. Cash Flow Statement

The company adopts the Indirect Method in preparation of Cash Flow Statement. For the purpose of Cash Flow Statement Cash & Cash equivalent consists of Cash in Hand, Cash at Bank & Cheques in Hand.