32 Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within 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 assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31, 2018, March 31, 2017and April 1, 2016.

There have been no transfers among Level 1, Level 2 and Level 3 during the year. 33 Financial Risk Management

The Company's principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the company's operations and to provide guarantees to support its operations. The Company's principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The Company uses foreign currency borowings to mitigate foreign exchange related risk exposures.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below: Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Compan/s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

The following table gives details in respect of percentage of revenues generated from top customer and top 5 customers :

One customer accounted for more than 10% of the revenue for the year ended March 31, 2018 , however two of the customers accounted for more than 10% of the receivables for the year ended March 31, 2018. One customer accounted for more than 10% of the revenue for the year March 31, 2017, however four of the customers accounted for more than 10% of the receivables for the year ended March 31, 2017.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk through credit limits with banks.

The Company's corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.

The working capital position of the Company is given below :

The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2018, March 31, 2017 and Aprill, 2016.

Foreign Currency risk

The Company's exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. dollars, British pound sterling and euros) and foreign currency borrowings (primarily in U.S. dollars, British pound sterling and euros). A significant portion of the Company's revenues are in these foreign currencies, while a significant portion of its costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Compan/s revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Compan/s management meets on a periodic basis to formulate the strategy for foreign currency risk management.

Consequently, the Company management believes that the borrowings in foreign currency and its assets in foreign currency shall mitigate the foreign currency risk mutually to some extent.

The following table presents foreign currency risk from non-derivative financial instruments as of March 31, 2018, March 31, 2017 and April 1, 2016.

Foreign currency sensitivity analysis

The Company is mainly exposed to the currency USD on account of outstanding trade receivables and trade payables in USD.

The following table details the Company's sensitivity to a 5% increase and decrease in INR against the USD. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

For a 5% weakening of the INR against the relevant currency, there would be equivalent amount of impact on the profit as mentioned in the above table.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Compan/s debt obligations with floating interest rates and investments.

Interest rate sensitivity analysis

If interest rates had been 1 % higher and all other variables were held constant, the company's profit for the year ended would have impacted in the following manner:

If interest rates were 1% lower, the compan/s profit would have increased by the equivalent amount as shown in the above table.

Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital. The Compan's objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is predominantly debt financed which is evident from the capital structure table.

34 Transition to Ind AS

The Company's financial statements for the year ended March 31, 2018 are prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the interim Ind AS financial statements for the year ended March 31, 2017 be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Indian GAAP as at the transition date have been recognized directly in equity at the transition date.

In preparing these financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101 as explained below:

a) Exceptions from full retrospective application :

Estimates exception: Upon an assessment of the estimates made under Indian GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by Indian GAAP.

b) Exemptions from retrospective application :

a. The Company has elected to restate the carrying value of the plant and equipment and capital work in progress in accordance with Ind AS, as of April 01, 2016 (transition date) as its deemed cost as of the transition date.

c) Reconciliations:

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Indian GAAP to Ind AS in accordance with Ind AS 101: equity as at April 1, 2016; equity as at March 31,2017 total comprehensive income for the year ended March 31, 2017; explanation of material adjustments to cash flow statements.

ii) Total comprehensive income reconciliation

iii) There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

Explanation notes for Ind AS transition :

i) Under Ind AS, liability for dividend is recognized in the period in which the obligation to pay is established. Under previous GAAP

(till March 31, 2016), a liability is recognized in the period to which the dividend relates, even though the dividend may be approved by the shareholders subsequent to the reporting date.

ii) Under the previous GAAP, actuarial gains or losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains or losses from part of remeasurement of the net defined benefit liability / asset is recognised in other comprehensive income. Change in the defined benefit obligation on account of Ind AS is recognised in the statement of profit and loss.

iii) The Company has made an irrevocable election to present the subsequent changes to the fair value of quoted equity onvestments in OCI. Accordingly all fair value changes on the instrument, excluding dividend are recognised in OCI which is not subsequently recycled to statement of profit and loss. Under the previous GAAP these investments were recognised at cost.

iv) Demerger expenses not qualifying for recognition under Ind AS is de-recognised under Ind AS.

v) Under Ind AS the adjustment for business combination (Demerger) is recognised with effect from the appointed date as per the scheme of demerger governed by the court of law i.e April 1, 2015. Under previous GAAP demerger effect was given during the year ended March 31, 2017. Therefore adjustment of the net profit earned by the resulting Company during the year ended March 31, 2017 in the financials as per the previous GAAP is not required.

35 Scheme of demerger

The National Company Law Tribunal (NCLT) vide their proceedings dated 24th August 2017 in Company Petition No.3598360 of 2016, renumbered as TCP/22823/CAA/2017, approved the scheme for demerger of the business of Spinning Unit-1 along with connected wind mills ("approved scheme", in favour of Shiva Mills Limited (formerly known as STYL Ventures Limited) ("SML"). The demerger comes in to effect from April 1, 2015, the appointed day fixed under the Scheme.

The net assets to be transferred to SML as on the appointed day, as per the approved scheme is recognised and disclosed as "Demerger Adjustment Account" to be adjusted against the equity of the Company when shares are allotted by SML to the share holders of Demerged Company.

During the year shares of SML were alloted in accordance with the scheme. Accordingly the demerger adjustment account is adjusted with the equity.

Signatories for notes and additional notes which form part of Balance Sheet and Statement of Profit and Loss.