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Notes to Accounts of Aarvee Denims and Exports Ltd.

Mar 31, 2015

1. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1059.53 lacs (Previous Year NIL).

2. There are no dues to Micro and Small enterprises as at 31st March, 2015. Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.

3. There is no amount due and outstanding as on 31st March, 2015 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs.1.86 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.

4. Claim on Fire

On March 1, 2015, there was a fire in the packing department of Vijay Farm Unit of the Company resulting into a loss of finished goods, Work in Progress, Plant & Machinery, Factory Building, Furniture & Fixtures and other Miscellaneous items. The Company has the insurance policies of all the effected assets, so the company has lodged claims with the insurance companies which claims include claim towards loss of the above stated assets. The carrying value of the assets destroyed in fire is estimated by the management at Rs.1732.21 lacs. The loss has been accounted for in the books of the Company and the amount of the insurance claims of Rs. 1477.64 lacs has been recognised as revenue in the Statement of Profit & Loss.

5. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6. Previous Year figures have been regrouped/ rearranged wherever considered necessary.


Mar 31, 2014

1. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2014, the amount of per share dividend recognized as distributions to equity shareholders was Rs. NIL (31st March 2013: Rs. 0.50).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Company has opted for accounting the exchange differences arising on reporting of Long term foreign currency monetary items in Line with Companies (Accounting Standards) Amendment Rules 2009 relating to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009. Accordingly, exchange differences on all Long term monetary items, with retrospective effect from April 01, 2007 are: (a) To the extent such items are used for the acquisition of a depreciable asset, added to / deducted from the cost of the asset and depreciated over the balance Life of the asset. As a resut addition of an amount of Rs. 784.26 Lacs have been made (Previous Year Rs. 414.21 Lacs) to Gross BLock of fixed assets, being the exchange difference on Long term monetary items reLated to the acquisition of a depreciabLe capitaL asset. (b) Depreciation provided during the year includes Depreciation of Rs. 86.11 Lacs ( Previous Year Rs. 23.06 Lacs) due to addition being the exchange difference on Long term monetary items reLated to the acquisition of a depreciabLe capital

2. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. NIL (Previous Year 761.28 Lacs)

3. Contingent Liabilities in respect of: (Rs. in Lacs) Particulars March 31,2014 March 31,2013

a. Service Tax Matters disputed in appeal 55.44 56.93

b. Custom duty payable on pending export obligations 359.63 326.57

c. Guarantees given by banks on behalf of the Company 815.85 459.36

4. There is no Micro and small Enterprises As at 31st March, 2014 as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.There are no dues to Micro and small Enterprises As at 31st March, 2014.

5. There is no amount due and outstanding as on 31st March, 2014 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs. 3.77 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.


Mar 31, 2013

Corporate Information

"AARVEE DENIMS AND EXPORTS LIMITED (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of denim and non denim Fabrics, Garments. The company caters to both domestic and international markets."

Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

1. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 761.29 (Previous Year Rs. 249.83)

2. Contingent Liabilities in respect of:

(Rs.in lacs) Particulars 31st March, 2013 31st March, 2012

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 326.57 2,343.65

c. Letter of Credit 1,809.70 2,602.17

d. Guarantees given by banks on behalf of the Company 459.36 318.32

3. There are no dues to Micro and small Enterprises as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

4. There is no amount due and outstanding as on 31st March, 2013 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs. 10.27 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.

5. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6. Derivative transactions :

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to outstanding receivables,certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy which provides principles on use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

7. Previous Year figures have been regrouped/ rearranged wherever considered necessary.


Mar 31, 2012

Corporate Information

AARVEE DENIMS AND EXPORTS LIMITED (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of denim and non denim Fabrics, Garments. The company caters to both domestic and international markets.

Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs..10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. Nil (31st March 2011: Rs..0.50).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Terms of conversion/redemption of FCCB

The Company issued Zero Coupon Foreign Currency Convertible Bonds ("FCCBs") of face value of US$ 20 Million on April 10, 2007.The FCCBs have been listed on the Singapore Exchange Securities Trading Limited and are convertible, by holders of the FCCBs, at any time on or after May 10, 2008 and up to the close of business on March 28, 2012 into fully paid equity shares of face value of Rs..10 each, to be newly issued by the Company at agreed upon initial Conversion Price (as defined in the "terms and Conditions of the Bonds") of Rs..148.93 per equity share. As per the terms of the FCCBs, the conversion price was reset at Rs..126.59 and Rs. 113.93 per share on 10th April 2008 and 10th April 2010 respectively. In case the holders of FCCBs do not opt for the conversion, the FCCBs will be redeemed in US dollars on April 11, 2012 at a premium of 48.02 per cent of their principal amount. Such Premium on redemption of FCCBs is being adjusted by the Company against the balance of Securities Premium Account on time period basis over the life of the FCCBs. FCCB outstanding as on 31.03.2012 is US$ 4.00 Million.

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India who invests the funds as per IRDA guidelines, is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

c. Contributions expected to be paid to the plan during the next financial year Rs. 52.11 Lacs (Previous Year Rs. 29.59 Lacs)

The estimates or rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factor including supply and demand in the employment market. The above information is certified by the actuary.

1 Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 249.83 lacs (Previous Year Rs. 3977.84 lacs)

2 Contingent Liabilities in respect of: (Rs. in lacs)

Particulars March 31, 2012 March 31, 2011

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 2,343.65 2,515.05

c. Letter of Credit 2,602.17 3,665.21

d. Guarantees given by banks on behalf of the Company 318.32 78.00

3 There are no dues to Micro and small Enterprises as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

4 There is no amount due and outstanding as on 31st March, 2012 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs..7.46 lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001

5 SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6 Derivative transactions:

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company's strategy which provides principles on use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The information on outstanding Forward Exchange Contracts entered into by the Company on accounts of receivables:

7 The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of the revision to the Schedule VI as per a notification issued during the year by the Central Government, the financial statements for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year figures have been accordingly regrouped/reclassified to confirm to the current year's classification.


Mar 31, 2011

1) The estimated amount of contracts remaining to be executed on capital accounts and not provided forRs. 3977.84 Lacs (Previous Year 687.08 Lacs)

2) Contingent Liabilities in respect of: (Rs. in Lacs)

Particulars March 31,2011 March 31,2010

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 2515.05 1336.00

c. Letter of Credit 3665.21 1750.61

d. Guarantees given by banks on behalf of the Company 78.00 21.00

3) Interest and Finance Charges are net of interest subsidy received under TUFS scheme amounting to Rs.73.41 Lacs (Previous Year Rs. 124.03 Lacs).

4) The Company issued Zero Coupon Foreign Currency Convertible Bonds (" FCCBs") of face value of US$ 20 Million on April 10, 2007.The FCCBs have been listed on the Singapore Exchange Securities Trading Limited and are convertible, by holders of the FCCBs, at any time on or after May 10,2008 and up to the close of business on March 28,2012 into fully paid equity shares of face value of Rs.10 each, to be newly issued by the company at agreed upon initial Conversion Price (as defined in the "Terms and Conditions of the Bonds") of Rs.148.93 per equity share. As per the terms of the FCCBs, the conversion price was reset at Rs.126.59 and Rs. 113.93 per share on 10th April 2008 and 10th April 2010 respectively. In case the holders of FCCBs do not opt for the conversion, the FCCBs will be redeemed in US dollars on April 11, 2012 at a premium of 48.02 per cent of their principal amount. Such Premium on redemption of FCCBs is being adjusted by the Company against the balance of Securities Premium Account on time period basis over the life of the FCCBs.

In June 2010, as per approval of the Reserve Bank of India, the Company has further bought back and cancelled FCCBs of the Face Value of US$ 5 Million (Previous Year US$ 7.5 Million), at a discount of US$ 0.172 Million (Previous Year US$1.875 Million) to the face Value. This has resulted in a net gain of Rs.75.30 Lacs (Previous Year 772.96 Lacs) which has been credited to Profit and Loss Account for the year and has been disclosed in schedule 12,Other Income. Consequent upon such buyback and cancellation the FCCBs, corresponding provision of Rs. 598.78 Lacs (Previous Year Rs. 649.07 Lacs) made for premium on redemption of the FCCBs, has been reversed and adjusted to the Securities Premium Account. FCCB outstanding as on 31.03.2011 is US$ 7.5 Million.

5) There are no dues to Micro and small Enterprises as at 31 th March, 2011 .This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

6) There is no amount due and outstanding as on 31 st March, 2011 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs.4.44 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001

7) Derivative transactions:

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company's strategy which provides principles on use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.

8. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as" Un allocable".

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India who invests the funds as per IRDA guidelines, is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

9) RELATED PARTY DISCLOSURES:

(As identified by Management)

Name of the party and relationships

a) Companies and firms in which Directors/Directors' Relatives exercise control / significant influence: Companies Firms

New Ahmedabad Synthetics Pvt. Ltd. B. Kalpeshkumar & Co.

Vee Bee Textile Pvt. Ltd. Parmanand Rajeshkumar

Rentex Weavers Ltd. Virendrabhai Bhogilal & Co.

Twenty First Century Marketing Ltd. Arora Agencies

EnnbeeTextiles Pvt. Ltd. Parmanand Vinodkumar

V.B. Investment Pvt. Ltd. Pari Bhogilal Laxmichand

Pee Vee Synthetics Pvt. Ltd. Parmanand Arora & Sons, HUF

Shipa Fabrics Pvt. Ltd. T.P. Vinodkumar, HUF

Kashvi Holding Pvt. Ltd. T.P. Rajeshkumar, HUF

Kashvi Investments Pvt. Ltd. K.V. Enterprise

Bhansali Tradelink Pvt. Ltd. A.V. Enterprise

Maverlin International Pvt. Ltd. A Star Fibres

b) Key management personnel

Vinodkumar P.Arora RajeshP.Arora

Parmanand T. Arora AshishVShah

KalpeshV.Shah

c) Relatives of key management personnel

NipunV.Arora RenuArora

PankajV. Arora Rita Arora

HeenaKhanna Kasturanrani Arora

Chinmaya P.Arora BhriguN. Arora

JahanviN. Arora Parul K. Shah

BelaA.Shah PankilK.Shah

PreetiN. Arora Shikha Arora

SomniChawla SarthakP Arora

10) QUANTITATIVE INFORMATION:

a) Class of Goods Manufactured

i) Denim Fabric

ii) Non Denim Cotton Fabric

iii) Electrical Energy

iv) Readymade Garment

11) Previous Year's figures have been regrouped / rearranged wherever necessary so as to make them comparable with the figures of the current year.

12) Schedule 1 to 19 form integral part of Balance Sheet and Profit and Loss Account and are duly authenticated.

 
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