i) Valuation of Inventories:

_# ^a) Raw materials and stores and spares are valued at lower of cost, computed on
net realizable value. Cost includes the purchase price as well as incidental
expenses. Cotton Waste is valued at estimated realizable value. However, in case
of raw materials, stores and spares held for use in the production of finished
goods are not written down below cost if the finished products are expected to
be sold at or above cost.

b) Work-in-process is valued at lower of estimated cost or net realizable value and
finished goods are valued at lower of weighted average cost or net realizable
value. Cost for this purpose includes direct cost and appropriate administrative
and other overheads.

c) Finished goods are valued at the lower of cost or net realizable value. Cost
included cost of materials, conversion cost and related overheads paid or
payable on such goods.

d) The Company has borrowings from banks and financial institutions based on
security of current assets. During the year company have submitted quarterly
statement with banks are in agreement with the books of accounts subject to

' non-materialized discrepancies.

ii) Cash and Cash Equivalents (For purpose of Cash Flow Statement):

a) Cash flow statement has been prepared under indirect method as set out in the
Indian Accounting Standard 7 on Cash Flow Statement.

b) The Company considers all highly liquid financial instruments, which are readily
convertible into known amounts of cash that are subject to an insignificant risk of
change in value and having original maturities of three months or less from the

“date of purchase, to be cash equivalents. Cash and cash equivalents consist of
balances with banks which are unrestricted for withdrawal and usage.

iii) Revenue Recognition:

a) Sales are exclusive of indirect taxes and net off trade discount, returns and rate*
difference. Other income is accounted on accrual basis whereas dividend is
accounted as and when right to receive arises.

b) Interest Income is recognized on time proportion basis.

c) Commodities hedging and F/O transaction gain or loss are recorded on the date
of their settlement in respect of the settled contracts and the gain or loss
determined on day to day basis.

d) Duty drawback income against export sale is recorded on receipt basis

e) Other income is accounted on accrual basis

iv) Property, Plant & Equipment and Depreciation:

a) Fixed assets have stated at cost of acquisition or construction less accumulated
depreciation/ amortization. Cost represents all cost relating to the acquisition and
installation, net-off tax, which is refundable or set-off, allowed. Cost also
includes finance cost. Other expenses incurred in connection to the
commencement of commercial production have treated as part of the assets and
capitalized.

b) Depreciation on fixed assets is provided under straight-line method based on the
estimated useful life of the Assets specified in schedule II to the Companies Act,
2013 and depreciation on the assets acquired during the year is provided on pro¬
rata basis from/to the date of addition/deduction.

c) The management has estimated the useful lives and residual values of all assets
and adopted useful lives based on management's technical assessment of their
respective economic useful lives.

d) The old asset before 31st March 2022, whose useful life is over has been
measured below scrap value since amount is not recoverable from them based
on management assumption. Balance other assets are depreciated as per
Companies Act 2013 and whose life is over is maintained at scrap value.

e) - Capital work in progress: It is stated at cost incurred for acquisition and

construction of Plant & Machineries, Electrical Installation, misc. Assets and
Factory building. Projects under which assets are not ready for their intended use
are disclosed under Capital Work-in-Progress.

f) Pre-operative Expenses: It is stated at cost incurred for acquisition of fixed assets
including borrowing Cost and administrative expenses.

g) Leasehold land is accounted at cost including incidental expenses, if any.

h) Land: IND AS 101 allows entity to elect to measure Property, Plant and
Equipment on the transition date at its fair value or previous GAAP carrying
value (book value) as deemed cost. The company has elected to measure land at
fair market value.

v) Foreign Currency Transactions:

Foreign currency transactions are recorded at the rate of exchange prevailing at
the date of the transaction. Monetary foreign currency assets and liabilities are
translated at the year-end exchange rates and resultant gains / losses are
recognized in the statement of profit & loss for the year, except to the extent that
they relate to new projects till the date of capitalization which are carried to
capital work-in progress and those relating to fixed assets which are adjusted to
the carrying cost of the respective assets.

vi) Derivative Instrument and Hedge Accounting:

The company uses Commodity Forward Contract with Commodity Exchanges to
hedge its risks on account of price fluctuation in commodity dealt. The company
designates these Hedging Instruments as "Instruments Available for Sale"
applying the recognition and measurement principles set out in the Indian
Accounting Standard 109 "Financials Instruments: Recognition and
Measurement".

The use of hedging instrument is governed by the principals set by Companies
Board of Directors, and such principals are consistent with the Company's Risk
management strategy. Hedging instruments are initially measured at fair value
and are premeasured at subsequent reporting dates. Changes in the fair value of
these derivatives that are designated and effective as hedges of "Instruments
Available for Sale" and are recognized.

vii) Government Grants, Subsidy and Incentives:

a) Interest subsidy received or receivable on Term Loan taken under Technology up
Gradation Fund Scheme (TUFS) Subsidy are reduced from the term loan interest

- being a revenue nature. TUFS subsidy on Interest pertaining to pre-operative
period is attributable to the cost of acquisition/installation of fixed assets till the
commencement of commercial production is capitalized.

b) Capital subsidy received or receivable on Term loan taken under Technology up
Gradation Fund Scheme (TUFS) Subsidy is treated as income and apportioned to
revenue over the period of life of asset i.e. 10 years.

c) Export duty drawback is accounted on the accrual basis.

viii) Employee Benefits:

-Expenses & liabilities in respect of employee benefits are recorded in accordance
with Indian Accounting Standard (IND AS)-19 - 'Employee Benefits'.

a) Short term employees' benefits:

Company has recognized all such benefits like salary, wages on accrual basis
i.e. m the period in which the employees renders related services and at actual
cost i.e. undiscounted basis.

b) Post-employment benefits: Defined Contribution Plan:

State governed provident fund, insurance and labour welfare schemes are
defined contribution plan of company. The company recognizes all such
benefits on accrual basis i.e. charge to revenue in the period in which the
employee's renders related services and at amount of actual fixed contribution.

c) Retirement Benefits:

Retirement benefits in the form of Provident Fund which are defined
contribution plans are charged to the Profit & Loss Account of the year when
the contributions to the respective funds are due. There are no other obligations
other than the contribution payable to the respective funds.

d) Gratuity:

Gratuity liabilities is defined benefit obligations and are provided for on the
basis of an actuarial valuation on projected unit credit method made at the end
of each financial year. Actuarial gains/losses are immediately taken to profit
and loss account and are not deferred.

Bifurcation of Employee benefit obligation is given below:

e) Leave Encashment:

It is provided as and when due. During the year, the company has made the
appropriate provision as required by the statute.

ix) Borrowing Cost:

In Accordance with IND AS 23 'Borrowing Cost', borrowing costs net of
Technology up Gradation Finance Scheme (TUFS) related to a qualifying asset is
worked out on the basis of actual utilization of funds out of project specific loans
and/or other borrowings to the extent identifiable with the qualifying asset and
is capitalized with the cost of qualifying asset. Other borrowing costs net of TUFS
incurred during the period are charged to statement of profit and loss.

x) Segment Accounting:

The company is engaged mainly in Cotton products consisting of various types
of cotton yarn, Cotton bales, and Cotton seeds, cotton oil and oil cakes. The
company operates in one geographical segment viz. India, therefore no
geographical segments is reported in accordance with IND AS 108 - 'Segment
Reporting'.

xi) Taxes on Income:

a) Taxes on income are accounted for in accordance within Indian Accounting
Standard 12 on "Income Taxes". Tax Expenses comprise of Current Tax and
Deferred Tax.

b) Current Tax expense comprises taxes on income from operations in India. The
Income Tax is determined at amount expected to pay for recoverable from the
authorities in accordance with the provisions of the Income Tax Act, 1961.

c) Deferred Tax Expense and Benefit is recognized on timing difference being the
difference between taxable incomes and accounting income that originate in
one period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets and Liabilities are measured using the tax rates and the tax
laws that have been enacted or substantively enacted by the Balance Sheet date.

d) The company offsets deferred tax assets and deferred tax liabilities if it has a
legally enforceable right and these relate to taxes on income levied by the same
governing taxation laws.

xii) Earnings Per Share:

Basic Earnings per share is computed by dividing the Profit/ (Loss) after tax
(Including the post tax effect of extra ordinary items, if any) by the weighted
average number of equity shares outstanding dining the year. Basic and Diluted
EPS are same because the company has not issued any of the shares having a
dilutive effect on the original shareholders. Refer Notes on accounts 2.2 (VI) to the
financial statements.