1. CORPORATE AND GENERAL INFORMATION

Dollar Industries Limited (the Company), was incorporated in India the year 1993. The Company is domiciled in India, and has its registered office in Om Tower, 32, J.L Nehru Road, 15th Floor, Kolkata - 700 071.

The Company is a Public Limited Company incorporated as per the provision of Companies Act applicable in India. The Company is primarily engaged in manufacture of hosiery products in knitted inner wears, casual wears and thermal wears. It also has a Power Generation Unit sourced from Windmill. The shares of the Company are listed on National Stock Exchange of India Limited.

2. BASIS OF ACCOUNTING

2.1 Statement of Compliance

These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the Act), read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended), other relevant provisions of the Act and other accounting principles generally accepted in India.

The financial statements for all periods up to and including the year ended 31st March, 2017, were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India, which includes the accounting standards prescribed under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and other provisions of the Act (collectively referred to as “Indian GAAP”). These financial statements for the year ended 31st March, 2018 are the first Ind AS Financial Statements with comparatives, prepared under Ind AS. The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet as at 1st April, 2016 throughout all periods presented, as if these policies had always been in effect and are covered by Ind AS 101- First Time Adoption of Indian Accounting Standards.

An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 44. Certain of the Company’s Ind AS accounting policies used in the opening Balance Sheet differed from its Indian GAAP policies applied as at 31st March, 2017 and accordingly the adjustments were made to restate the opening balances as per Ind AS. The resulting adjustment arising from events and transactions before the date of transition to Ind AS were recognized directly through retained earnings as at 1st April, 2016 as required by Ind- AS 101. The financial statements of the Company for the year ended 31st March, 2018 have been approved by the Board of Directors in their meeting held on 29th May, 2018.

2.2 Basis of Measurement

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

- Financial assets and liabilities (including derivative instruments) that is measured at Fair value/ Amortised cost.

2.3 Functional and Presentation Currency

The Financial Statements have been presented in Indian Rupees (INR), which is also the Company’s functional currency. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Schedule III, unless otherwise stated.

2.4 Use of Estimates and Judgements

The preparation of financial statements require judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period prospectively in which the results are known/ materialized.

2.5 Current Vs non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is classified as current when it is:

- Expected to be realized or intended to sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other assets and liabilities as non-current.

Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities respectively.

3. SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES

Information about significant judgements and Key sources of estimation made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

- Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company’s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits.

- Useful lives of depreciable/ amortisable assets (tangible and intangible): Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of plant and equipment.

- Classification of Leases: The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

- Defined Benefit Obligation (DBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.

- Provisions and Contingencies: The assessments undertaken in recognising provisions and contingencies have been made in accordance with Indian Accounting Standards (Ind AS) 37, ‘Provisions, Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.

- Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.

- Allowances for Doubtful Debts: The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable amount. The identification of doubtful debts requires use of judgment and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

- Fair value measurement of financial Instruments: When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The input to these models are taken from observable markets where possible, but where this not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

c) The Company has one class of issued shares i.e. equity shares having par value of RS.2 per share. Each holder of ordinary shares is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

d) The Company does not have any holding Company or ultimate holding Company.

e) No 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 convertible securities has been issued by the Company during the year.

g) No calls are unpaid by any Director and officer of the Company during the year.

h) The equity shares of the Company were split from FV RS.10/- each to RS.2/- each. In this regard, the Board of Directors of the Company accorded its approval at its meeting held on 29 May, 2017 and shareholders have approved the same at the Annual General Meeting held on 8 August, 2017. The Company had fixed its record date as 1 September, 2017 and accordingly the changes have been made in the NSE.

i) The Company had issued and allotted 25,00,000 equity shares of RS.2/- each, for cash, at a premium of RS.428/- per share aggregating to RS.10,750.00 lakhs on preferential basis to the Promoter/ Promoter group on 7 November, 2017.

j) During the financial year 2016-17 the Company had issued and allotted 30,98,064 bonus shares to the equity shareholders in the ratio of 0.4 equity shares for each held.

Nature and purpose of other reserves

a) General reserve

General reserve is created out of the profits transferred from the earnings during the year. It is available for distribution to the shareholders.

b) Securities premium reserve

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.

4.1 Nature of security

a) Term loan from Yes Bank and ICICI Bank are secured by exclusive charge on the capital assets procured out of the proceeds of the respective loan.

b) Term loan from Allahabad Bank are secured by exclusive first charge over the assets acquired out of the proceeds of the respective loan and situated at NH 7, V. Paddukottal, Tamilnadu.

4.2 Repayment terms of secured term loans outstanding as at 31 March, 2018

a) Allahabad Bank corporate loan amounting RS.997.98 lacs (31 March, 2017: RS.1,993 lacs; 1 April, 2016: Nil) is repayable in 2 annual instalments commencing from March, 2018.

b) Allahabad Bank term loan III amounting RS.270.55 lacs (Previous year 31 March, 2017: RS.586.97 lacs; 1 April, 2016: RS.905.18 lacs) is repayable in 16 quarterly instalments commencing from June, 2015.

c) Yes Bank term loan amounting RS.166.80 lacs (31 March, 2017: RS.299.71 lacs ; 1 April, 2016: RS.408.06 lacs) is repayable in 15 quarterly instalments commencing from December, 2015.

d) Allahabad Bank term loan V amounting RS.131.69 lacs (31 March, 2017: Nil; 1 April, 2016: Nil) is repayable in 19 quarterly instalments commencing after one year from the final disbursement of the loan.

e) ICICI Bank term loan IV amounting RS.80.37 lacs (31 March, 2017: Nil; 1 April, 2016: Nil) is repayable in 16 equated quarterly instalments commencing from November, 2018.

f) Allahabad Bank Term loan IV amounting RS.18.60 lacs (31 March, 2017: Nil; 1 April, 2016: Nil) is repayable in 16 equated quarterly instalments commencing from November, 2018.

4.3 The loan from body corporate amounting to RS.4,246.97 (31 March, 2017: RS.5,276.50; 1 April, 2016: RS.1,270.39) is repayable after April 2019.

4.4 Interest rates on the above loans from banks and body corporate range between 8.25% to 10.50%.

5.1 Movement in deferred tax assets and liabilities during the year ended 31 March, 2018 and 31 March, 2017

6.1 Working capital loan from banks are secured by way of hypothecation charge over entire current assets viz. raw materials, stock-in-trade and book debts both present and future ranking pari passu with other consortium member banks.

6.2 Interest rates on the above loan from banks range between 8.25% to 10.60%

7.1 Based on the information available with the Company, there were no dues during the year to entities covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no Interest provisions/payments have been made by the Company to such creditors.

8. Disclosure pursuant to Indian Accounting Standard - 19 ‘Employee Benefits’ as notified u/s 133 of the Companies Act, 2013.

a) Defined Contribution Plan

The amount recognized as an expense for the Defined Contribution Plans are as under:

b) Defined Benefit Plan

The following are the types of defined benefit plans:

(i) Gratuity Plan

Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972. The present value of defined obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at Balance Sheet date.

(ii) Provident Fund

Provident Fund (other than government administered) as per the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952.

c) Risk Exposure Defined Benefit Plans

Defined benefit plans expose the Company to actuarial risks such as: Interest Rate Risk, Salary Risk and Demographic Risk.

a) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If the bond yield falls, the defined benefit obligation will tend to increase.

b) Salary risk: Higher than expected increases in salary will increase the defined benefit obligation.

c) Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that includes mortality withdrawal disability and retirement. The effect of these decrements on the defined benefits obligations is not straight forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of the short career employee typically costs less per year as compared to a long service employee.

d) Reconciliation of the net defined benefit (asset)/ liability

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset)/ liability and its components:

i) Maturity Analysis

At 31 March, 2018, the weighted average duration of the defined benefit obligation was 25 years (previous year 24 years). The distribution of the timing of benefits payment i.e., the maturity analysis of the benefit payments is as follows:

j) Sensitivity Analysis

The sensitivity analysis below have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

9. The Board of Directors at its meeting held on 29th May, 2018 have recommended a payment of final dividend of RS.1.60 per equity share of FV RS.2 each for the financial year ended 31 March, 2018. The same amounts to RS.1,093.99 lacs (including dividend distribution tax of RS.186.53 lacs).

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

10. Operating leases As Lessee

The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, stores, godown) etc. These leasing arrangements which are cancellable range between 11 months and 8 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent in the Statement of Profit and Loss.

11. Transition to Ind AS

11.1 Basis for preparation

For all period up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements for the year ended 31 March, 2018 are the Company’s first annual Ind AS financial statements and have been prepared in accordance with Ind AS.

The accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ended 31 March, 2018, the comparative information presented in these financial statements for the year ended 31 March, 2017 and in the preparation of an opening Ind AS balance sheet at 1 April, 2016 (the date of transition). This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

11.2 Exceptions and exemptions applied

Ind AS 101 “First-time adoption of Indian Accounting Standards” (hereinafter referred to as Ind AS 101) allows first time adopters certain mandatory exceptions and optional exemptions from the retrospective application of certain Ind AS, effective for 1st April, 2016 opening balance sheet. In preparing these Standalone financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

11.2.1 Optional exemptions availed

a) Property, plant and equipment and Intangible assets

As permitted by Para D5-D8B of Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also.

b) Determining whether an arrangement contains a lease

Para D9-D9AA of Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 “Leases” for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has applied the above transitional provision and has assessed all the arrangements at the date of transition.

c) Business combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Standard has not been applied to acquisitions of subsidiaries, which are considered businesses for Ind AS, or of interests in associates that occurred before the transition date, 1 April, 2016.

11.2.2 Mandatory exceptions

a) Estimates

As per Para 14 of Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Para 16 of the standard, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition or at the end of the comparative period.

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statement that were not required under the previous GAAP are listed below:

-Impairment of financial assets based on the expected credit loss model.

-Determination of the discounted value for financial instruments carried at amortized cost.

b) De-recognition of financial assets and liabilities

As per Para B2 of Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, “Financial Instruments”, prospectively for transactions occurring on or after the date of transition to Ind AS. However, Para B3 gives an option to the entity to apply the derecognition requirements from a date of its choice if the information required to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the initially accounting for those transactions. The Company has elected to apply the derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

c) Classification and measurement of financial assets

Para B8 - B8C of Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively.

12. Transition to Ind AS- Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

12.1 Reconciliation of Balance sheet as at 1 April, 2016 (Transition Date) and as at 31 March, 2017

12.2 Reconciliation of Statement of Profit and Loss Account and total comprehensive income for the year ended 31 March, 2017

12.3 Reconciliation of total equity as at 1 April, 2016 and as at 31 March, 2017

12.4 Adjustments to Statement of Cash Flows

The presentation requirement under Previous GAAP differ from Ind AS, and hence, Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

Notes to the reconciliation of Balance Sheet & Equity as at 1 April, 2016 and 31 March, 2017 and Profit for the year ended 31 March, 2017

Explanations to the material adjustments made in the process of IND AS transition from previous GAAP

a) Long term borrowings

Under Indian GAAP, the Company accounted for long term borrowings measured at transaction value. Under Ind AS, the Company has recognised the long term borrowings at amortised cost using effective interest rate (EIR) method.

b) Deferred revenue

As per the Policy of the Company , grants received from government agencies against specific fixed assets (Property, Plant and Equipment) are credited to the Profit and Loss Account. Under IND AS the same has been presented as deferred revenue being amortised in the statement of profit & loss on a systematic basis.

c) Dividend and tax on dividend

Under Indian GAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.

Since declaration of dividend occurs after period end in the Company, the provision for proposed dividend has been derecognized against retained earnings on 1 April, 2016 and Liabilities recognized in the year ended 31 March, 2017.

d) Forward contract

Under IND AS mark to market gain or loss on restatement of forward contract as at the reporting date has been recognized in the Statement of profit and loss.

e) Security deposits given

Under the Previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) were recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

f) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

g) Re-classifications

Assets/ liabilities which do not meet the definition of financial asset/ financial liability have been reclassified to other asset/ liability. Remeasurement gain/loss on long term employee defined benefit plans are re-classified from statement of profit and loss to OCI.

13. Fair value of financial assets and financial liabilities

13.1 The Company has measured its Financial Asset and Financial Liabilities to be measured at Amortised Cost, except as stated below:

13.2 The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.

13.3 The fair values of non-current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.

14. Fair value hierarchy

The fair value of financial instruments are classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The categories used are as follows:

- Level 1: Quoted prices for identical instruments in an active market;

- Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and

- Level 3: Inputs which are not based on observable market data.”

14.1 The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS 113 “Fair Value Measurement”.

14.2 There are no transfers between levels during the year.

15. Financial risk management objectives and policies

The Company’s activities expose it to the following risks:

a) Credit risk

b) Liquidity risk

c) Market risk

a) Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Concentration of credit risk with respect to trade receivables are limited, due to the Company’s customer base being large and diverse. All trade receivables are reviewed and assessed for default on a quarterly basis. Our historical experience of collecting receivables is that credit risk is low. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable as disclosed in Note 12.

b) Liquidity risk

It is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals. The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.

c) Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risks:

Commodity Price Risk, Foreign Exchange Risk, and Interest Rate Risk.

1) Commodity price risk

The Company primarily imports cotton and rubber. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.

2) Foreign currency risk

The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.

The Company’s exposure to foreign currency risk at the end of the reporting period are as follows:

Sensitivity analysis

The Analysis is based on assumption that the increase/decrease in foreign currency by 5% with all other variables held constant, on the unhedged foreign currency exposure.

3) Interest rate risk

The Company is exposed to risk due to interest rate fluctuation on long term borrowings. Such borrowings are based on fixed as well as floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio diversification and exercise of prepayment/refinancing options where considered necessary.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

16. Capital management

The Company’s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Apart from internal accrual, sourcing of capital is done through judicious combination of equity and borrowing, both short term and long term.

17. Certain Trade Receivables , Loans & Advances and Trade Payables are subject to confirmation. In the opinion of the management, the value of Trade Receivables and Loans & Advances on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

18. Segment Reporting

There is only one primary business segment i.e. “Garments & Hosiery goods and related services” and hence no separate segment information is disclosed in this financials.

Secondary information is reported geographically.

Geographical segments

The Company primarily operates in India and therefore analysis of geographical segment is demonstrated into Indian and overseas operation as under:

The sale to and purchase from Related Party are made in the normal course of business and on terms equivalent to those that prevail in arm’s length transactions. The Loans and Advances issued to Related Parties are on terms equivalent to those that prevail in arm’s length transactions. Outstanding Balances at the year end are unsecured and settlement occurs in cash for the year ended 31 March, 2018, the Company has recorded the receivable relating to amount due from Related Parties net of impairment. This assessment is undertaken each Financial Year through examining the Financial position of the Related Parties and the market in which the Related Party operates.

19. Previous GAAP figures have been reclassified/regrouped to confirm the presentation requirements under IND AS and the requirements laid down in Division-II of the Schedule-III of the Companies Act, 2013.