Mar 31, 2015
1. System of Accounting
a) These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
b) The financial statements are prepared on accrual basis under the
historical cost convention, except for certain Fixed Assets which are
carried at revalued amounts. The financial statements are presented in
Indian rupees rounded off to the nearest rupees.
c) Purchases are booked net of discounts and rebates.
2. Fixed Assets
a) Fixed assets are recorded at historical cost less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attribute cost of bringing the assets to its working
condition for its intended use.
b) Increase/decrease in liability towards creditors for capital goods
due to change in foreign exchange rate is added to/reduced from the
cost of asset.
3. Depreciation
a) Depreciation on Fixed Assets has been provided on Straight Line
Method at the rates and in the manner prescribed in Schedule II of the
Companies Act, 2013. Depreciation is provided based on useful life of
the assets as prescribed in Schedule II to the Companies Act, 2013.
b) Depreciation on additions to fixed asset during the year has been
provided on pro rata basis from the date of such addition.
c) Depreciation on amount, added to/reduced from the cost of asset
consequent to increase/decrease in liability towards creditors for
capital goods, due to change in foreign exchange rate, is provided
prospectively for the remaining life of the assets at the rates on
which concerned asset has been depreciated so far.
d) Pursuant to the enactment of Companies Act 2013, the company has
applied the estimated useful lives as specified in Schedule II.
Accordingly the unamortized carrying value is being
depreciated/amortized over the revised/ remaining useful lives. The
written down value of Fixed Assets whose lives have expired as at 1st
April 2014 have been adjusted net of taxes, in the opening balance of
Profit and Loss Account.
4. Impairment of Assets
The Carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based on internal/external
factors. If any indications exist the recoverable value of assets is
estimated. An Impairment loss is recognized whenever the carrying
amount of an assets is exceeds its recoverable amount, the latter being
greater of net selling price and value in use.
5. Inventories
a) Inventory of raw material, packing material, fuels, consumables,
dyes and chemicals, are valued on Lower of Cost and Net Realizable
Value. Cost is calculated on First in First out (FIFO) basis of costing
and is net of subsequently recoverable duties and taxes.
b) Stock in progress is valued at Lower of Cost and Net Realizable
Value. Costs include raw material cost, ascertained on the basis of
average cost of purchases, and direct cost incurred up to the stage of
production of Grey Yarn, processing and fabrication. Inventory lying
for more than six months is valued at half of cost of production.
c) Finished goods are valued at Lower of Cost and Net Realizable Value.
Cost includes raw material cost, ascertained on the basis of average
cost of purchases, and direct cost. Old inventory lying for more than
six months is valued at half of cost of production. Inventory of
rejected finished goods is valued at Net Realizable Value.
d) Inventory of carpets and trading items is valued on lower of cost
and net realizable value.
e) Inventory of waste is valued on net realizable value.
f) Stores and Spares are charged to expenses on purchase and no
inventory is maintained.
6. Investments
Long Term investments are valued at cost. Provision for decrease in
market value of the short term investment is created in the books as
unrealized losses.
7. Retirement Benefits
Retirement benefits have been accounted for on accrual basis. Provision
of Gratuity is created for the employees who became eligible after
completing five years of services under the Payment of Gratuity Act,
1972. Provision of Gratuity has not been provided on the managerial
remuneration.
8. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
9. Revenue Recognition
a) Sale is recorded on FOB value exclusive of freight, insurance and
excise duty recovered from the customers. Sale is recognized on the
date of dispatch of goods from factory after verification by the Excise
Authorities from the Bonded Warehouse, which is located within the
premises of the factory.
b) Export Sale is recorded at the foreign currency exchange rate
prevailing on the date of the transaction.
c) Sales are recorded on invoice value net of discounts and rebates.
10. Foreign Currency Transactions
a) Expenses and Income in foreign exchange are accounted for at the
rates prevailing on the date of transactions and exchange differences
on settlement of transaction are taken to the Profit and Loss Account.
b) Monetary assets and liabilities relating to foreign currency
transaction pending for settlement have been restated on the foreign
currency conversion rates prevailing on March 31, 2015 in accordance
with Accounting Standard-11 on 'Accounting for the Effects of Changes
in Foreign Exchange Rates' issued by the Institute of Chartered
Accountants of India. Resultant loss/gain has been booked as exchange
rate fluctuation in the Profit and Loss Account under 'Financial
Charges'/'Other Income'.
11. Segment Reporting
The Company is engaged in production of Towels of various sizes and
operations are confined only to the factory at Gurgaon. As such there
is no other reportable segment as defined by Accounting Standard - 17
on 'Segment Reporting' issued by the Institute of Chartered Accountants
of India.
12. Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses.
Mar 31, 2014
1. System of Accounting
a) The Financial Statements are prepared under historical cost
convention, on accrual basis, in accordance with the generally accepted
accounting principles in India and to comply with the Accounting
Standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government in exercise of the power
conferred under sub-section (1) (a) of Section 642 and the relevant
provisions of the Companies Act, 1956 (the "Act").
b) All assets and liabilities have been classified as current or
non-current, wherever applicable as per the operating cycle of the
Company as per the guidance as set out in the Revised Schedule VI to
the Companies Act, 1956.
c) Company follows accrual basis of accounting in accordance with the
provisions of the Companies Act, 1956.
d) Purchases are booked net of discounts and rebates.
e) The preparation of financial statement in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
2. Fixed Assets
a) Fixed assets are recorded at historical cost less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attribute cost of bringing the assets to its working
condition for its intended use.
b) Increase/decrease in liability towards creditors for capital goods
due to change in foreign exchange rate is added to/reduced from the
cost of asset.
3. Depreciation
a) Depreciation on Fixed Assets has been provided on Straight Line
Method at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
b) Depreciation on additions to fixed asset during the year has been
provided on pro rata basis from the date of such addition. Depreciation
of Plant and Machinery, Generator and Electrical Installation has been
provided on triple shift basis.
c) Depreciation on amount, added to/reduced from the cost of asset
consequent to increase/decrease in liability towards creditors for
capital goods, due to change in foreign exchange rate, is provided
prospectively for the remaining life of the assets at the rates on
which concerned asset has been depreciated so far.
4. Impairment of Assets
The Carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based on internal/external
factors. If any indications exist the recoverable value of assets is
estimated. An Impairment loss is recognized whenever the carrying
amount of an assets is exceeds its recoverable amount, the latter being
greater of net selling price and value in use.
5. Inventories
a) Inventory of raw material, packing material, fuels, consumables,
dyes and chemicals, are valued on Lower of Cost and Net Realizable
Value. Cost is calculated on First in First out (FIFO) basis of costing
and is net of subsequently recoverable duties and taxes.
b) Stock in progress is valued at Lower of Cost and Net Realizable
Value. Costs include raw material cost, ascertained on the basis of
average cost of purchases, and direct cost incurred up to the stage of
production of Grey Yarn, processing and fabrication. Inventory lying
for more than six months is valued at half of cost of production.
c) Finished goods are valued at Lower of Cost and Net Realizable Value.
Cost includes raw material cost, ascertained on the basis of average
cost of purchases, and direct cost. Old inventory lying for more than
six months is valued at half of cost of production. Inventory of
rejected finished goods is valued at Net Realizable Value.
d) Inventory of carpets and trading items is valued on lower of cost
and net realizable value.
e) Inventory of waste is valued on net realizable value.
f) Stores and Spares are charged to expenses on purchase and no
inventory is maintained.
6. Investments
Long Term investments are valued at cost. Provision for decrease in
market value of the short term investment is created in the books as
unrealized losses.
7. Retirement Benefits
Retirement benefits have been accounted for on accrual basis. Provision
of Gratuity is created for the employees who became eligible after
completing five years of services under the Payment of Gratuity Act,
1972. Provision of Gratuity has not been provided on the managerial
remuneration.
8. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
9. Revenue Recognition
a) Sale is recorded on FOB value exclusive of freight, insurance and
excise duty recovered from the customers. Sale is recognized on the
date of dispatch of goods from factory after verification by the Excise
Authorities from the Bonded Warehouse, which is located within the
premises of the factory.
b) Export Sale is recorded at the foreign currency exchange rate
prevailing on the date of the transaction.
c) Sales are recorded on invoice value net of discounts and rebates.
10. Foreign Currency Transactions
a) Expenses and Income in foreign exchange are accounted for at the
rates prevailing on the date of transactions and exchange differences
on settlement of transaction are taken to the Profit and Loss Account.
b) Monetary assets and liabilities relating to foreign currency
transaction pending for settlement have been restated on the foreign
currency conversion rates prevailing on March 31, 2014 in accordance
with Accounting Standard-11 on ''Accounting for the Effects of Changes
in Foreign Exchange Rates'' issued by the Institute of Chartered
Accountants of India. Resultant loss/gain has been booked as exchange
rate fluctuation in the Profit and Loss Account under ''Financial
Charges''/''Other Income''.
11. Segment Reporting
The Company is engaged in production of Towels of various sizes and
operations are confined only to the factory at Gurgaon. As such there
is no other reportable segment as defined by Accounting Standard - 17
on ''Segment Reporting'' issued by the Institute of Chartered Accountants
of India.
12. Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses.
Mar 31, 2013
1. System of Accounting
a) Financial statements are prepared under the historical cost
convention in consonance and accordance with applicable accounting
standards, accepted accounting principles and relevant presentational
requirements of the Companies Act, 1956.
b) Company follows accrual basis of accounting in accordance with the
provisions of the Companies Act, 1956.
c) Purchases are booked net of discounts and rebates.
d) The preparation of financial statement in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
2. Fixed Assets
a) Fixed assets are recorded at historical cost less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attribute cost of bringing the assets to its working
condition for its intended use.
b) Increase/decrease in liability towards creditors for capital goods
due to change in foreign exchange rate is added to/reduced from the
cost of asset.
3. Depreciation
a) Depreciation on Fixed Assets has been provided on Straight Line
Method at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
b) Depreciation on additions to fixed asset during the year has been
provided on pro rata basis from the date of such addition. Depreciation
of Plant and Machinery, Generator and Electrical Installation has been
provided on triple shift basis.
c) Depreciation on amount, added to/reduced from the cost of asset
consequent to increase/decrease in liability towards creditors for
capital goods, due to change in foreign exchange rate, is provided
prospectively for the remaining life of the assets at the rates on
which concerned asset has been depreciated so far.4.Impairment of
Assets
The Carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based on internal/external
factors. If any indications exist the recoverable value of assets is
estimated. An Impairment loss is recognized whenever the carrying
amount of an assets is exceeds its recoverable amount, the latter being
greater of net selling price and value in use.
4. Inventories
a) Inventory of raw material, packing material, fuels, consumables,
dyes and chemicals, are valued on Lower of Cost and Net Realizable
Value. Cost is calculated on First in First out (FIFO) basis of costing
and is net of subsequently recoverable duties and taxes.
b) Stock in progress is valued at Lower of Cost and Net Realizable
Value. Costs include raw material cost, ascertained on the basis of
average cost of purchases, and direct cost incurred up to the stage of
production of Grey Yarn, processing and fabrication. Inventory lying
for more than six months is valued at half of cost of production.
c) Finished goods are valued at Lower of Cost and Net Realizable Value.
Cost includes raw material cost, ascertained on the basis of average
cost of purchases, and direct cost. Old inventory lying for more than
six months is valued at half of cost of production. Inventory of
rejected finished goods is valued at Net Realizable Value.
d) Inventory of carpets and trading items is valued on lower of cost
and net realizable value.
e) Inventory of waste is valued on net realizable value.
f) Stores and Spares are charged to expenses on purchase and no
inventory is maintained.
5. Investments
Long Term investments are valued at cost. Provision for decrease in
market value of the short term investment is created in the books as
unrealized losses.
6. Retirement Benefits
Retirement benefits have been accounted for on accrual basis. Provision
of Gratuity is created for the employees who became eligible after
completing five years of services under the Payment of Gratuity Act,
1972. Provision of Gratuity has not been provided on the managerial
remuneration.
7. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates. *
8. Revenue Recognition
a) Sale is recorded on FOB value exclusive of freight, insurance and
excise duty recovered from the customers. Sale is recognized on the
date of dispatch of goods from factory after verification by the Excise
Authorities from the Bonded Warehouse, which is located within the
premises of the factory.
b) Export Sale is recorded at the foreign currency exchange rate
prevailing on the date of the transaction.
c) Sales are recorded on invoice value net of discounts and rebates.
9. Foreign Currency Transactions
a) Expenses and Income in foreign exchange are accounted for at the
rates prevailing on the date of transactions and exchange differences
on settlement of transaction are taken to the Profit and Loss Account.
b) Monetary assets and liabilities relating to foreign currency
transaction pending for settlement have been restated on the foreign
currency conversion rates prevailing on March 31, 2013 in accordance
with Accounting StandardÂ11 on Accounting for the Effects of Changes
in Foreign Exchange Rates'' issued by the Institute of Chartered
Accountants of India. Resultant loss/gain has been booked as exchange
rate fluctuation in the Profit and Loss Account under ''Financial
Charges''/''Other Income''.
10. Segment Reporting
The Company is engaged in production of Towels of various sizes and
operations are confined only to the factory at Gurgaon. As such there
is no other reportable segment as defined by Accounting Standard - 17
on ''Segment Reporting'' issued by the Institute of Chartered Accountants
of India.
11. Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses.
Mar 31, 2012
1. System of Accounting
a) Financial statements are prepared under the historical cost
convention in consonance and accordance with applicable accounting
standards, accepted accounting principles and relevant presentational
requirements of the Companies Act, 1956.
b) Company follows accrual basis of accounting in accordance with the
provisions of the Companies Act, 1956.
c) Purchases are booked net of discounts and rebates.
d) The preparation of financial statement in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
2. Fixed Assets
a) Fixed assets are recorded at historical cost less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attribute cost of bringing the assets to its working
condition for its intended use.
b) Increase/decrease in liability towards creditors for capital goods
due to change in foreign exchange rate is added to/reduced from the
cost of asset.
3. Depreciation
a) Depreciation on Fixed Assets has been provided on Straight Line
Method at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
b) Depreciation on additions to fixed asset during the year has been
provided on pro rata basis from the date of such addition. Depreciation
of Plant and Machinery, Generator and Electrical Installation has been
provided on triple shift basis.
c) Depreciation on amount, added to/reduced from the cost of asset
consequent to increase/decrease in liability towards creditors for
capital goods, due to change in foreign exchange rate, is provided
prospectively for the remaining life of the assets at the rates on
which concerned asset has been depreciated so far.
4. Impairment of Assets
The Carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based on internal/external
factors. If any indications exist the recoverable value of assets is
estimated. An Impairment loss is recognized whenever the carrying
amount of an assets is exceeds its recoverable amount, the latter being
greater of net selling price and value in use.
5. Inventories
a) Inventory of raw material, packing material, fuels, consumables,
dyes and chemicals, are valued on Lower of Cost and Net Realizable
Value. Cost is calculated on First in First out (FIFO) basis of costing
and is net of subsequently recoverable duties and taxes.
b) Stock in progress is valued at Lower of Cost and Net Realizable
Value. Costs include raw material cost, ascertained on the basis of
average cost of purchases, and direct cost incurred up to the stage of
production of Grey Yarn, processing and fabrication. Inventory lying
for more than six months is valued at half of cost of production.
c) Finished goods are valued at Lower of Cost and Net Realizable Value.
Cost includes raw material cost, ascertained on the basis of average
cost of purchases, and direct cost. Old inventory lying for more than
six months is valued at half of cost of production. Inventory of
rejected finished goods is valued at Net Realizable Value.
d) Inventory of carpets and trading items is valued on lower of cost
and net realizable value.
e) Inventory of waste is valued on net realizable value.
f) Stores and Spares are charged to expenses on purchase and no
inventory is maintained.
6. Investments
Long Term investments are valued at cost. Provision for decrease in
market value of the short term investment is created in the books as
unrealized losses.
7. Retirement Benefits
Retirement benefits have been accounted for on accrual basis. Provision
of Gratuity is created for the employees who became eligible after
completing five years of services under the Payment of Gratuity Act,
1972. Provision of Gratuity has not been provided on the managerial
remuneration.
8. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
9. Revenue Recognition
a) Sale is recorded on FOB value exclusive of freight, insurance and
excise duty recovered from the customers. Sale is recognized on the
date of dispatch of goods from factory after verification by the Excise
Authorities from the Bonded Warehouse, which is located within the
premises of the factory.
b) Export Sale is recorded at the foreign currency exchange rate
prevailing on the date of the transaction.
c) Sales are recorded on invoice value net of discounts and rebates.
10. Foreign Currency Transactions
a) Expenses and Income in foreign exchange are accounted for at the
rates prevailing on the date of transactions and exchange differences
on settlement of transaction are taken to the Profit and Loss Account.
b) Monetary assets and liabilities relating to foreign currency
transaction pending for settlement have been restated on the foreign
currency conversion rates prevailing on March 31, 2011 in accordance
with Accounting Standard-11 on ''Accounting for the Effects of Changes
in Foreign Exchange Rates'' issued by the Institute of Chartered
Accountants of India. Resultant loss/gain has been booked as exchange
rate fluctuation in the Profit and Loss Account under ''Financial
Charges''/''Other Income''.
11. Segment Reporting
The Company is engaged in production of Towels of various sizes and
operations are confined only to the factory at Gurgaon. As such there
is no other reportable segment as defined by Accounting Standard -17 on
''Segment Reporting'' issued by the Institute of Chartered Accountants of
India.
12. Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred
tax assets in respect of unabsorbed depreciation and carry forward of
losses are recognized if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses.
Mar 31, 2010
1. System of Accounting
a) Financial statements are prepared under the historical cost
convention in consonance and accordance with applicable accounting
standards, accepted accounting principles and relevant presentational
requirements of the Companies Act, 1956.
b) Company follows accrual basis of accounting in accordance with the
provisions of the Companies Act, 1956.
c) The company has taken debonding and is no more covered under the
status of 100% Export Oriented Unit. The company is now covered under
Domestic Tariff Area. Therefore, now the company is not entitled to
refund of Central Sales Tax (CST), CENVAT, and VAT paid/payable on
purchases of inputs and input services. The unit has been debonded with
effect from September 17, 2009 vide File No. 04-88/92-100%EOU/6378.
d) Purchases are booked net of discounts and rebates.
e) The preparation of financial statement in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
financial statements and the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
2. Fixed Assets
a) Fixed assets are recorded at historical cost less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attribute cost of bringing the assets to its working
condition for its intended use.
b) Increase/decrease in liability towards creditors for capital goods
due to change in foreign exchange rate is added to/reduced from the
cost of asset.
3. Depreciation
a) Depreciation on Fixed Assets has been provided on Straight Line
Method at the rates and in the manner prescribed in Schedule XrV of the
Companies Act, 1956.
b) Depreciation on additions to fixed asset during the year has been
provided on pro rata basis from the date of such addition. Depreciation
of Plant and Machinery, Generator and Electrical Installation has been
provided on triple shift basis.
c) Depreciation on amount, added to/reduced from the cost of asset
consequent to increase/decrease in liability towards creditors for
capital goods, due to change in foreign exchange rate, is provided
prospectively for the remaining life of the assets at the rates on
which concerned asset has been depreciated so far.
4. Impairment of Assets
The Carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based on internal/external
factors. If any indications exist the recoverable value of assets is
estimated. An Impairment loss is recognized whenever the carrying
amount of an assets is exceeds its recoverable amount, the latter being
greater of net selling price and value in use.
5. Inventories
a) Inventory of raw material, packing material, fuels, consumables,
dyes and chemicals, are valued on Lower of Cost and Net Realizable
Value. Cost is calculated on First in First out (FIFO) basis of costing
and is net of subsequently recoverable duties and taxes.
b) Stock in progress is valued at Lower of Cost and Net Realizable
Value. Costs include raw material cost, ascertained on the basis of
average cost of purchases, and direct cost incurred up to the stage of
production of Grey Yarn, processing and fabrication. Inventory lying
for more than six months is valued at half of cost of production.
c) Finished goods are valued at Lower of Cost and Net Realizable Value.
Cost includes raw material cost, ascertained on the basis of average
cost of purchases, and direct cost. Old inventory lying for more than
six months is valued at half of cost of production. Inventory of
rejected finished goods is valued at Net Realizable Value.
d) Inventory of carpets and trading items is valued on lower of cost
and net realizable value.
e) Inventory of waste is valued on net realizable value.
f) Stores and Spares are charged to expenses on purchase and no
inventory is maintained.
6. Investments
Long Term investments are valued at cost. Provision for decrease in
market value of the short term investment is created in the books as
unrealized losses.
7. Retirement Benefits
Retirement benefits have been accounted for on accrual basis. Provision
of Gratuity is created for the employees who became eligible after
completing five years of services under the Payment of Gratuity Act,
1972. Provision of Gratuity has not been provided on the managerial
remuneration.
8. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
9. Revenue Recognition
a) Sale is recorded on FOB value exclusive of freight, insurance and
excise duty recovered from the customers. Sale is recognized on the
date of dispatch of goods from factory after verification by the Excise
Authorities from the Bonded Warehouse, which is located within the
premises of the factory.
b) Export Sale is recorded at the foreign currency exchange rate
prevailing on the date of the transaction.
c) Sales are recorded on invoice value net of discounts and rebates.
10. Foreign Currency Transactions
a) Expenses and Income in foreign exchange are accounted for at the
rates prevailing on the date of transactions and exchange differences
on settlement of transaction are taken to the Profit and Loss Account.
b) Monetary assets and liabilities relating to foreign currency
transaction pending for settlement have been restated on the foreign
currency conversion rates prevailing on March 31, 2010 in accordance
with Accounting Standard-11 on Accounting for the Effects of Changes in
Foreign Exchange Rates issued by the Institute of Chartered
Accountants of India. Resultant loss/gain has been booked as exchange
rate fluctuation in the Profit and Loss Account under Financial
Charges/Other Income.
11. Government Grants
Company has received Capital Subsidy of Rs. 3,000,000/- under Capital
Investment Scheme of State Government of Haryana. This amount has been
recognized in books on receipt as per conservative assumption of
accounting. The grants received from the State Government are treated
as being in nature of Promoters Contribution and have been directly
credited to Shareholders Fund.
12. Segment Reporting
The Company is engaged in production of Towels of various sizes and
operations are confined only to the factory at Gurgaon. As such there
is no other reportable segment as defined by Accounting Standard - 17
on Segment Reporting* issued by the Institute of Chartered Accountants
of India.
13. Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred
tax assets in respect of unabsorbed depreciation and carry forward of
losses are recognized if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses.