1. During the year 2005-06, the company recognized an income of Rs. 36I.26 lakhs being export incentive under the Target Plus Scheme in terms of the then brvailing Foreign Trade Policy. The Govt., of India, Ministry of Commerce vide their Notification No.8 (RE-2006)/ 2004-09 dated I2.06.06 retrospectively reduced the benefit of entitlement from I5% to 5% on the exports effected since 0I.04.2005. The company has since received duty free credit enti­tlement for Rs. I2I.86 lakhs @ 5% and for the balance I0%, the Company has contested before the Hon'ble High Court at Mumbai for the restrospective reduction of the export incentive by the Government of India. The High Court has granted an interim stay of the notification and the matter is pending for final orders.

2. Company has provided debrciation on Straight line method as per use full lives brscribed for various assets in Schedule II to the Companies Act, 20I3.Management has reassessed used full lives in order to comply with the useful lives brscribed in the Schedule. Debrciation charge has been determined for the year on the existing assets in such a way that the carrying amount of the assets at the beginning of the year shall be charged over the remaining use full life of the asset after retaining the residual value of the asset. Where the life of the asset is 'nil' ,the carrying amount of such asset is recognised in the opening balance of retained earnings.

3. Consequent to the approval of the scheme of arrangement of demerger by Hon'ble High Court at Hyderabad, demerged company (Suryavanshi Spinning Mills Ltd.), resulting company I(Aananda Lakshmi Spinning Mills Ltd.) and resulting company 2 (Sheshadri Industries Ltd.) have made application to the working capital bankers for allocation of working capital limits.The working capital bankers i.e Andhra bank and State Bank of Hyderabad under working capital consortium arrangement have sanctioned allocating the working capital limits to the respective companies. The banking operations of the respective companies have started on release of such limits to each company at the end of the year.

4. Segment reporting is not applicable since the Company operates in single segment i.e., Textile product.

5. Previous year's figures have been regrouped wherever necessary to conform to this year's classification.

6. Significant Accounting Policies:

1 Accounting Convention

The financial statements are brpared under historical cost convention and on an accrual basis in accordance with the generally accepted accounting principles.

2. Fixed Assets

Fixed Assets are stated at cost net of debrciation provided in the statements. Cost of acquisition of Fixed Assets is inclusive of all direct and indirect expenditure up to the date of commercial use.

Debrciation is provided on straight line method in accordance with the use ful lives brscribed in Schedule-II to the companies Act, 20I3

3 Inventories

Raw material and Stores and Spares valued at cost on weighted average basis. Stock-in-process and Finished Goods are valued at lower of cost or net realisable value.

4 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalised as part of cost of the asset till the date the asset is ready for commercial use. All other borrowing cost are charge to revenue.

5 Investments

Investments are stated at cost and diminution in the value, which is permanent in nature, is provided for.

6 Contingent Liabilities And Provisions

All Contingent liabilities are indicated by way of a note and will be paid / provided on crystalisation.

7 Retirement Benefits

Provident fund contributions is charged to the Statement of Profit and Loss as and when the contributions are due. Gratuity and leave encashment provision is made as per actuarial valuation on the basis of projected unit credit method.

8 Foreign Exchange Transactions

Foreign currency transactions are recorded at the rates brvailing on the date of the transaction. Assets and liabilities arising out of foreign exchange transactions are translated at the rate of exchange ruling on the date of balance sheet and are suitably adjusted to the appropriate revenue/ capital account.

9 Impairment Of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods, is reversed if there has been a change in the estimate of recoverable amount.

10 Provision For Taxation

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable income and accounting income at rates that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised only if there is a reasonable certainity that they will be realised and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

11 Revenue recognition

Sales rebrsents the amount receivable for goods sold. Incentives on export sales are recognised as income on accrual basis

12 Earning Per Share

Earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

13 Use Of Estimates

Preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised

per our report of even date

For and on behalf of Board of Directors

For Brahmayya & Co.

Chartered Accountants

Firms' Registration Number: 0005I3S

K.S.Rao Partner

Membership Number: 0I5850 & Company Secretary

J.K. Agarwal Managing Director & CFO

B.N. Agarwal Chairman

B.R.S. Reddy Vice brsident (Corp.Affairs)

Surender kumar Agarwal Director

Place : Hyderabad

Date : 16th May, 20I5