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Accounting Policies of Bannari Amman Spinning Mills Ltd. Company

Mar 31, 2014

I. The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956.

ii. Investments: Investments are carried individually at cost and are treated as long-term investments.

The diminution in the market value of investment is recognized when diminution is considered permanent.

iii. Valuation of Inventory.

Raw materials and stores & spares: At cost determined on First in First out basis or net realizable value, whichever is lower.

Finished goods and by products: At cost or net realizable value, whichever is lower. The cost has been measured on the weighted average cost basis and includes cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

Stock in Process : At estimated weighted average cost basis.

iv. Revenue is recognised only when risk and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, service tax, excise duty and sales during trail run period, adjusted for discounts (net), and gain/loss on corresponding hedge contracts. Dividend income is recognised when the right to receive payment is established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

v. The Fixed Assets are carried at historical cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance etc., attributable to acquisition and installation of assets and borrowing cost incurred up to the date of commencing operations, but excludes duties and taxes that are recoverable from taxing authorities. The fixed assets shown in the books are not revalued.

vi. The Company has provided depreciation on straight-line basis in respect of fixed assets other than Windmill Units at the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of Windmill assets, the depreciation has been provided on written down value basis at the rates prescribed in Schedule XIV to the Companies Act, 1956.

For assets costing Rs. 5000/- or less, 100% depreciation has been charged in the year of purchase of such assets. For other assets acquired during the year pro-rata charge has been made from the date of first use. In the year of disposal of assets, depreciation is charged up to the date of disposal.

vii. The Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary items as at the Balance Sheet date are reported at the closing rate or at the rate at which it is likely to be realized from or required to be disbursed. Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

viii. The exchange differences on restatement / settlement of long term foreign currency loans are accumulated in a "Foreign currency translation reserve" until repayment of the loan. "Foreign Currency Monetary item Translation difference Account" has been amortized as per notification

G.S.R.225(E) of the Ministry of Corporate Affairs, Government Of India dated 31.3.2009 as amended by notification G.S.R.913(E) dated 29.12.2011.

ix. The Company has opted for Life Insurance Corporation Employees Group Gratuity Scheme to cover its gratuity liability. Contribution paid/payable by the company to LIC of India is charged to revenue on the basis of actuarial valuation towards demand worked out by LIC.

Provident fund/pension fund and gratuity liability are Defined Contribution Schemes and contributions are charged to Profit and Loss Account of the year in which the contribution to the respective funds are due.

Short term employee benefits including compensated absences are provided for based on the expected obligation on an undiscounted basis as per Accounting Standard 15 (Revised).

x. Borrowing costs attributable to the acquisition, construction and installation of qualifying capital

assets are capitalized till the period before they are put into use.

xi. The carrying value of assets at each balance sheet date is reviewed for impairment. If any indication of impairment exists the recoverable amount of such assets is estimated and appropriate provision is recognized in the accounts.

xii. Current tax is determined at the current rates of income tax on taxable income and tax credits are computed in accordance with the provisions of the Income Tax Act, 1961.

xiii. Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the rates and tax laws that prevail as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xiv. Government grants have been recognized based on the reasonable assurance that the Company will comply with the conditions attached to the grants and the grants will be received. Government grants relatable to borrowing cost have been reduced from the borrowing cost thereby reducing the cost of the asset. Government grants relatable to periods after the acquisition, construction and installation of qualifying assets are in the nature of revenue grants and have been recognized on a systematic basis in the profit and loss account.

Export benefits are accounted for in the year of exports based on the eligibility and there is no uncertainty in receiving the same.

xv. The Company has operated only one business segment which is textile segment and hence segment report is not furnished.

xvi. Provisions, Contingent liabilities and Contingent Assets: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are shown by way of notes attached to and forming part of the Balance Sheet. Contingent Assets are neither recognized nor disclosed in the financial statements.

xvii. Assets taken on lease by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

xviii.Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. The lease rentals paid under such agreements are accounted in the profit and loss account.

Terms/rights attached to the equity shares

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

Name of the Bank and Details of the loan ICICI Bank Limited

"ICICI Bank Ltd - Rupee Term Loan under Technology Upgradation Fund Scheme - Outstanding as at 31.03.2014 Rs. 112.50 Lakhs (31.03.2013 - Rs. 337.50 Lakhs) - Current maturity for 31.03.2014 - Rs. 112.50 Lakhs (31.03.2013 - Rs. 225.00 Lakhs)"

Securities and other Terms & Conditions

Security : Hypothecation of specified movable properties including the machinery spares, tools and accessories of the spinning unit situated at Vadamadurai Village, Vedasandhur Taluk, Dindigul District.

Repayment : 32 quarterly instalments starting from December 2006. Loan has been further secured by the personal guarantee of Managing Director of the Company.

Rate of Interest : 8.55 %, 8.90% & 9.10% (Fixed)"

ICICI Bank Limited

"ICICI Bank Ltd - Rupee Term Loan Outstanding as at 31.03.2014 Rs. 3200.00 Lakhs (31.03.2013 - Rs. 4000 Lakhs ) - Current maturity for 31.03.2014 - Rs. 800 Lakhs (31.03.2013 - Rs. 800 Lakhs )"

"Security: First charge on entire movable and immovable fixed assets of spinning unit I situated at Vadamadurai Village, Vedasandhur Taluk, Dindigul District and entire movable fixed assets of weaving division situated at Karanampettai, Paruvai Road, Coimbatore 641658.Second charge on the current assets of Spinning Unit I situated at Vadamadurai Village, Vedasandhur Taluk, Dindigul.

Repayment: 20 quarterly instalments starting from April 2013.

Rate of Interest : 13.00% (Fixed)"

Corporation Bank

"Corporation Bank - Rupee Term Loan under Technology Upgradation Fund Scheme - Outstanding as at 31.03.2014 Rs. 1161.28 Lakhs (31.03.2013 - Rs. 1561.28 Lakhs) - Current maturity for 31.03.2014 - Rs. 400 Lakhs (31.03.2013 - Rs. 400 Lakhs)"

"First charge by way of Equitable Mortgage over factory land and building and hypothecation of other movable assets financed by the bank for the expansion project ranking pari-passu with other banks. Second charge on the above fixed assets to be extended to the bankers who are extending working capital facilities to the company.

Repayment : 32 quaterly instalments starting from Dec 2009.

Rate of Interest : 12.75%"

"Corporation Bank - Rupee Term Loan under Technology Upgradation Fund Scheme - Outstanding as at 31.03.2014 Rs. 56 Lakhs (31.03.2013 - Rs. 280 Lakhs) - Current maturity

"Exclusive First charge on the Windmill- Unit I and all related equipments, systems and accessories. Loan has been further secured by the personal guarantee of Managing for 31.03.2014 - Rs. 56 Lakhs (31.03.2013 - Rs. 224 Lakhs)"

Director of the Company.

Repayment : 32 quarterly instalments starting from August 2006.

Rate of Interest : 9.00% (Fixed)"

Bank of Maharashtra

"Bank of Maharastra - Rupee Term Loan under Technology Upgradation Fund Scheme - Outstanding as at 31.03.2014 Rs. 2343.75 Lakhs (31.03.2013 - Rs. 2968.75 Lakhs) - Current maturity for 31.03.2014 - Rs. 625 Lakhs (31.03.2013 - Rs. 625 Lakhs)"

"First charge by way of Equitable Mortgage over factory land and building and hypothecation of other movable assets financed by the bank for the expansion project ranking pari-passu with other banks. Second charge on the above fixed assets to be extended to the bankers who are extending working capital facilities to the company.

Repayment :32 quarterly instalments starting from March 2010.

Rate of Interest : 12.75%"

Oriental Bank of Commerce

"Oriental Bank of Commerce - Rupee Term Loan under Technology Upgradation Fund Scheme - Outstanding as at 31.03.2014 Rs. 6558.86 Lakhs (31.03.2013 - Rs. 8433.86 Lakhs) - Current maturity for 31.03.2014 - Rs. 1875 Lakhs (31.03.2013 - Rs. 1875 Lakhs)"

"First charge by way of Equitable Mortgage over factory land and building and hypothecation of other movable assets financed by the bank for the expansion project ranking pari-passu with other banks. Second charge on the above fixed assets to be extended to the bankers who are extending working capital facilities to the company.

Repayment :32 quarterly instalments starting from October 2009

Rate of Interest : 12.75%"

Indian Bank

"Indian Bank - Rupee Term Loan Outstanding as at 31.03.2014 Rs. 1490.00 Lakhs (31.03.2013 - Rs. 1862.50 Lakhs) - Current maturity for 31.03.2014 - Rs. 372.50 Lakhs (31.03.2013 - Rs. 372.50 Lakhs)"

"Indian Bank - Rupee Term Loan

Outstanding as at 31.03.2014 Rs. 2468.93 Lakhs (31.03.2013 - Rs. 1824.92 Lakhs) - Current maturity for 31.03.2014 - Rs. 124 Lakhs

(31.03.2013 - Rs. 31.00 Lakhs)"

"Exclusive First charge by way of Mortgage and hypothecation on windmil unit III assets being financed by the Bank.

Repayment :32 quarterly instalments starting from June 2011.

Rate of Interest : 12.70%"

"Pari-pasu First charge by way of equitable mortgage over factory land and building where construction is proposed at SIPCOT Perundurai and exclusive charge on fixed assets to be purchased out of the loan.

Repayment :32 quarterly instalments starting from Feb'' 2014.

Rate of Interest : 12.20%"

"Indian Bank - Rupee Term Loan

Outstanding as at 31.03.2014 Rs. 1323.98 Lakhs (31.03.2013 - NIL) - Current maturity for 31.03.2014 - NIL (31.03.2013 - Nil)"

"Pari-passu First Charge by way of Equitable Mortgage over factory land and building where land and building where construction is proposed at SIPCOT, Perundurai and exclusive charge on fixed assets to be purchased out of this project (Mortgage and Hypothecation)

Repayment :32 quarterly instalments starting from April''2016.

Rate of Interest : 12.20%"

Indian Overseas Bank

"Indian Overseas Bank - Rupee Term Loan under Technology Upgradation Fund SchemeOutstanding as at 31.03.2014 Rs. 4337.20 Lakhs (31.03.2013 - Rs. 5587.20 Lakhs) - Current maturity for 31.03.2014 - Rs. 1250 Lakhs (31.03.2013 - Rs. 1250 Lakhs)"

"First charge by way of Equitable Mortgage over factory land and building and hypothecation of other movable assets financed by the bank for the expansion project ranking pari-passu with other banks. Second charge on the above fixed assets to be extended to the bankers who are extending working capital facilities to the company.

Repayment :32 quarterly instalments starting from October 2009.

Rate of Interest : 13.00%"

"Indian Overseas Bank - Rupee Term Loan Outstanding as at 31.03.2014 Rs. 2531 Lakhs (31.03.2013 - Rs. 2951 Lakhs) - Current maturity for 31.03.2014 - Rs. 420 Lakhs (31.03.2014 - Rs. 420 Lakhs)"

"Exclusive First charge on windmil unit IV & V assets situated at Chinnapudur village, Dharapuram Taluk, Tamilnadu and Kongalnagaram, Udumalpet Taluk, Tirupur district, Tamilnadu.

Repayment :32 quarterly instalments starting from June 2012.

Rate of Interest : 13.00%"

"Indian Overseas Bank - Foreign Currency Term Loan Outstanding as at 31.03.2014 Rs. 1277.26 Lakhs (31.03.2013 - Rs. 1671.48 Lakhs) - Current maturity for 31.03.2014 - Rs. 570 Lakhs (31.03.2013 - Rs. 570 Lakhs)"

"Exclusive First charge on windmil unit II assets situated at Chinnapudur village, Dharapuram Taluk, Tamilnadu

Repayment :14 Half-yearly instalments starting from June 2009.

Rate of Interest : 6.3452%".

The Karur Vysya Bank Limited

"Karur Vysya Bank Ltd - Working Capital Limit Rs.950 Lakhs Outstanding as at 31.03.2014 Rs. 1034.58 Lakhs (31.03.2013 - Rs. 131.66 Lakhs)"

Securities and other Terms & Conditions :

"Security : First Charge by way of Hypothecation of Raw materials, Stock in-process, Finished goods of the Spinning Unit - I. Second charge on the Fixed Assets of the Spinning Unit - I.

Rate of Interest : 12.50%"

Corporation Bank

"Corporation Bank - Working Capital Limit Rs. 5250 Lakhs Outstanding as at 31.03.2014 Rs. 2423.11 Lakhs (31.03.2013 - Rs. 1389.44 Lakhs)"

"Security : First Charge by way of

Hypothecation of Raw materials, Stock in- process, Finished goods of the Spinning Unit - I and II. Second charge on the Fixed Assets of the Spinning Unit - I and II.

Rate of Interest : 13.85% Short Term Loan : 11.25% (Fixed)"

ICICI Bank Limited

"ICICI Bank Limited - Foreign Currency - Working Capital Limit Rs. 1500 Lakhs Out standing as at 31.03.2014 Rs. 821.38 Lakhs (31.03.2013 - Rs. 851.41 Lakhs)"

"Security: First Charge by way of

Hypothecation of Raw materials,Semi- finished and Finished goods, Consumable stores and Spares and other movable properties both present and future for Limit upto Rs.1500 Lakhs.PCFC

Rate of Interest : 3.60%"

Oriental Bank of Commerce

Oriental Bank of Commerce - Working

Capital Limit Rs. 6000 Lakhs ( Interchangable of Cash credit/Rupee Packing Credit/Packing Credit in Foreign Currency Loan) Outstanding as at 31.03.2014 Rs. 3628.39 Lakhs (31.03.2013 - Rs. 1659.64 Lakhs)

"Security: Pari-pasu first charge on current assets of the company belonging to expansion project along with other banks who have extended Working Capital Finance for expansion project under multiple banking arrangements. Pari-pasu second charge on Fixed Assets of the company belonging to expansion project along with other banks who have extended Working Capital Finance for expansion project under multiple banking arrangements.First Pari- passu Charge on Current Assets of Garment and Processing Division Foreign

Documentary Demand / Usance Bill having maximum usanc e of 180 days accompanied by Airway Bill / Bill of Lading evidencing shipment of Goods dealt in by the borrower and drawn under irrevocable letter of credit / Confirmed orders.

Rate of Interest : 12.75%PCFC A/c Rate of Interest : 3.85%"

Indian Overseas Bank

Indian Overseas Bank - Working Capital

Limit Rs.5000 Lakhs ( Interchangable of Cash credit / WCFC / Rupee Packing Credit / Packing Credit in Foreign Currency Loan) Outstanding as at 31.03.2014 Rs. 5845.33 Lakhs (31.03.2013 - Rs. 1060.92 Lakhs)

"Security: Pari-pasu first charge on current assets of the company belonging to expansion project along with other banks who have extended Working Capital Finance for expansion project under multiple banking arrangements. Pari-pasu second charge on Fixed Assets of the company belonging to expansion project along with other banks who have extended Working Capital Finance for expansion project under multiple banking arrangements.CC A/c Rate of Interest :

13.00%PCFC A/c

Rate of Interest : 3.85%"

Bank of Maharashtra

Bank of Maharashtra - Working Capital Limit Rs.500Lakhs Outstanding as at 31.03.2014 Rs. 145.28 Lakhs (31.03.2013 - Rs. Nil )

Security: Pari-pasu first charge on current assets of the company belonging to expansion project along with other banks who have extended Working Capital Finance for expansion project under multiple banking arrangements.

Rate of Interest : 12.75%

Allahabad Bank

Allahabad Bank - Working Capital Limit (Interchangeable of Cash credit/Packing Credit/Packing Credit in Foreign Currency Loan ) Rs. 4500 Lakhs.

Outstanding as at 31.03.2014 Rs. 3093.04 Lakhs (31.03.2013 - Rs. 1423.26 Lakhs)

"Security: Pari-pasu first charge on current assets of the Company''s Spinning Unit- II along with other banks who have extended Working Capital Finance under multiple banking arrangements.

Exclusive first charge on the Current Assets of the Company''s Garment Division Pari- Passu second charge on Fixed Assets of the Company''s Spinning Unit -II along with other Working Capital lenders of Spinning Unit - II. Pari-passu second charge on Fixed Assets of the Company''s Garment Division

Rate of Interest : CC A/c . 12.70%PCFC A/c

Rate of Interest : 3.86%."


Mar 31, 2013

I. The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956.

ii. Investments: Investments are carried individually at cost and are treated as long-term investments. The diminution in the market value of investment is recognized when diminution is considered permanent.

iii. Valuation of Inventory.

Raw materials and stores & spares: At cost determined on First in First out basis or net realizable value, whichever is lower.

Finished goods and by products: At cost or net realizable value, whichever is lower. The cost has been measured on the weighted average cost basis and includes cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

Stock in Process : At estimated weighted average cost basis.

iv. The Fixed Assets are carried at historical cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance etc., attributable to acquisition and installation of assets and borrowing cost incurred up to the date of commencing operations, but excludes duties and taxes that are recoverable from taxing authorities. The fixed assets shown in the books are not revalued.

v. The Company has provided depreciation on straight-line basis in respect of fixed assets other than Windmill Units at the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of Windmill assets, the depreciation has been provided on written down value basis at the rates prescribed in Schedule XIV to the Companies Act, 1956.

For assets costing Rs.5000/- or less, 100% depreciation has been charged in the year of purchase of such assets. For other assets acquired during the year pro-rata charge has been made from the date of first use. In the year of disposal of assets, depreciation is charged up to the date of disposal.

vi. The Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary items as at the Balance Sheet date are reported at the closing rate or at the rate at which it is likely to be realized from or required to be disbursed. Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

vii. The exchange differences on restatement / settlement of long term foreign currency loans are accumulated in a "Foreign currency translation reserve" until repayment of the loan. "Foreign Currency Monetary item Translation difference Account" has been amortized as per notification G.S.R.225(E) of the Ministry of Corporate Affairs, Government Of India dated 31.3.2009 as amended by notification G.S.R.913(E) dated 29.12.2011.

viii. The Company has opted for Life Insurance Corporation Employees Group Gratuity Scheme to cover its gratuity liability. Contribution paid/payable by the company to LIC of India is charged to revenue on the basis of actuarial valuation towards demand worked out by LIC.

Provident fund/pension fund and gratuity liability are Defined Contribution Schemes and contributions are charged to Profit and Loss Account of the year in which the contribution to the respective funds are due.

Short term employee benefits including compensated absences are provided for based on the expected obligation on an undiscounted basis as per Accounting Standard 15 (Revised).

ix. Borrowing costs attributable to the acquisition, construction and installation of qualifying capital assets are capitalized till the period before they are put into use.

x. The carrying value of assets at each balance sheet date is reviewed for impairment. If any indication of impairment exists the recoverable amount of such assets is estimated and appropriate provision is recognized in the accounts.

xi. Current tax is determined at the current rates of income tax on taxable income and tax credits are computed in accordance with the provisions of the Income Tax Act, 1961.

xii. Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the rates and tax laws that prevail as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xiii. Government grants have been recognized based on the reasonable assurance that the Company will comply with the conditions attached to the grants and the grants will be received. Government grants relatable to borrowing cost have been reduced from the borrowing cost thereby reducing the cost of the asset. Government grants relatable to periods after the acquisition, construction and installation of qualifying assets are in the nature of revenue grants and have been recognized on a systematic basis in the profit and loss account. Export benefits are accounted for in the year of exports based on the eligibility and there is no uncertainty in receiving the same.

xiv. The Company has operated only one business segment which is textile segment and hence segment report is not furnished.

xv. Provisions, Contingent liabilities and Contingent Assets: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are shown by way of notes attached to and forming part of the Balance Sheet. Contingent Assets are neither recognized nor disclosed in the financial statements.

xvi. Assets taken on lease by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

xvii. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. The lease rentals paid under such agreements are accounted in the profit and loss account.


Mar 31, 2012

I. The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956.

ii. Investments: Investments are carried individually at cost and are treated as long-term investments. The diminution in the market value of investment is recognized when diminution is considered permanent.

iii. Valuation of Inventory.

Raw materials and stores & spares: At cost determined on First in First out basis or net realizable value, whichever is lower.

Finished goods and waste cotton: At cost or net realizable value, whichever is lower. The cost has been measured on the weighted average cost basis and includes cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

Stock in Process: At estimated weighted average cost basis

iv. The Fixed Assets are carried at historical cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance etc., attributable to acquisition and installation of assets and borrowing cost incurred up to the date of commencing operations, but excludes duties and taxes that are recoverable from taxing authorities. The Fixed assets shown in the books are not revalued.

v. The Company has provided depreciation on straight-line basis in respect of fixed assets other than Windmill Units at the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of Windmill assets, the depreciation has been provided on written down value basis at the rates prescribed in Schedule XIV to the Companies Act, 1956.

For assets costing Rs 5000/- or less, 100% depreciation has been charged in the year of purchase of such assets. For other assets acquired during the year pro-rata charge has been made from the date of first use. In the year of disposal of assets, depreciation is charged up to the date of disposal.

vi. The Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary items as at the Balance Sheet date are reported at the closing rate or at the rate at which it is likely to be realized from or required to be disbursed. Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

vii. The exchange differences on restatement / settlement of long term foreign currency loans are accumulated in a "Foreign currency translation reserve" until repayment of the loan. "Foreign Currency Monetary item Translation difference Account" has been amortized as per notification G.S.R.225(E) of the Ministry of Corporate Affairs, Government of India dated 31.3.2009 as amended by notification G.S.R.913(E) dated 29.12.2011.

viii. The Company has opted for Life Insurance Corporation Employees Group Gratuity Scheme to cover its gratuity liability. Contribution paid/payable by the company to LIC of India is charged to revenue on the basis of actuarial valuation towards demand worked out by LIC.

Provident fund/pension fund and gratuity liability are Defined Contribution Schemes and contributions are charged to Profit and Loss Account of the year in which the contribution to the respective funds are due.



Short term employee benefits including compensated absences are provided for based on the expected obligation on an undiscounted basis as per Accounting Standard 15 (Revised).

ix. Borrowing costs attributable to the acquisition, construction and installation of qualifying capital assets are capitalized till the period before they are put into use.

x. The carrying value of assets at each balance sheet date is reviewed for impairment. If any indication of impairment exists the recoverable amount of such assets is estimated and appropriate provision is recognized in the accounts.

xi. Current tax is determined at the current rates of income tax on taxable income and tax credits are computed in accordance with the provisions of the Income Tax Act, 1961.

xii. Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the rates and tax laws that prevail as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xiii. Government grants have been recognized based on the reasonable assurance that the Company will comply with the conditions attached to the grants and the grants will be received. Government grants relatable to borrowing cost have been reduced from the borrowing cost thereby reducing the cost of the asset. Government grants relatable to periods after the acquisition, construction and installation of qualifying assets are in the nature of revenue grants and have been recognized on a systematic basis in the profit and loss account.

Export benefits are accounted for in the year of exports based on the eligibility and there is no uncertainty in receiving the same.

xiv. The Company has operated only one business segment which is textile segment and hence segment report is not furnished.

xv. Provisions, Contingent liabilities and Contingent Assets: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are shown by way of notes attached to and forming part of the Balance Sheet. Contingent Assets are neither recognized nor disclosed in the financial statements

xvi. Assets leased by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

xvii. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. The lease rentals paid under such agreements are accounted in the profit and loss account.


Mar 31, 2011

I. The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP").

ii. Investments: Investments are accounted at cost and are treated as long-term investments. The diminution in the market value of investment is recognized when diminution is considered permanent.

iii. Valuation of Inventory.

Raw materials and stores & spares: At cost determined on First in First out basis or net realizable value, whichever is lower.

Finished goods and waste cotton: At cost or net realizable value, whichever is lower. The cost has been measured on the weighted average cost basis and includes cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

Stock in Process: At estimated weighted average cost basis.

iv. The Fixed Assets are valued at historical cost. Cost includes related taxes, duties, freight, insurance etc.,

attributable to acquisition and installation of assets and borrowing cost incurred up to the date of commencing operations, but excludes duties and taxes that are recoverable from taxing authorities. The Fixed assets shown in the books are not revalued.

v. The Company has provided depreciation on straight-line basis in respect of fixed assets other than Windmill Units at the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of Windmill assets, the method of providing for depreciation has been changed to written down value basis from straight line method basis as adopted in the previous year.

For assets costing Rs.5000/- or less, 100% depreciation has been charged in the year of purchase of such assets. For other assets acquired during the year pro-rata charge has been made from the date of first use. In the year of disposal of assets, depreciation is charged up to the date of disposal.

vi. The Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary items as at the Balance Sheet date are reported at the closing rate or at the rate at which it is likely to be realized from or required to be disbursed.

vii. "Foreign Currency Monetary item Translation difference Account" has been amortized as per notification G.S.R.225(E) of the Ministry of Corporate Affairs, Government of India dated 31.3.2009.

viii. The Company has opted for Life Insurance Corporation Employees Group Gratuity Scheme to cover its gratuity liability. Contribution paid/payable by the Company to LIC of India is charged to revenue on the basis of actuarial valuation towards demand worked out by LIC.

Provident fund/pension fund and gratuity liability are Defined Contribution Schemes and contributions are charged to Profit and Loss Account of the year in which the contribution to the respective funds are due.

Short term employee benefits including compensated absences are provided for based on the expected obligation on an undiscounted basis as per Accounting Standard 15 (Revised).

ix. Borrowing costs attributable to the acquisition, construction and installation of qualifying capital assets are capitalized till the period before they are put into use.

x. Provisions, Contingent liabilities and Contingent Assets: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are shown by way of notes attached to and forming part of the Balance Sheet. Contingent Assets are neither recognized nor disclosed in the financial statements.

xi. Impairment loss of fixed assets is assessed as at the close of each financial year and appropriate provision, if required, is recognized in the accounts.

xii. Current tax is determined at the current rates of income tax on taxable income and tax credits are computed in accordance with the provisions of the Income Tax Act,1961.

xiii. Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the rates and tax laws that prevail as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xiv. Government grants have been recognized based on the reasonable assurance that the Company will comply with the conditions attached to the grants and the grants will be received. Government grants relatable to borrowing cost have been reduced from the borrowing cost thereby reducing the cost of the asset. Government grants relatable to periods after the acquisition, construction and installation of qualifying assets are in the nature of revenue grants and have been recognized on a systematic basis in the profit and loss account.

xv. The Company has operated only one business segment which is textile segment and hence segment report is not furnished.

xvi. The Company's significant leasing arrangements are operating leases and cancelable in nature. The lease rentals paid/received under such agreements are accounted in the profit and loss account.














Mar 31, 2010

I. The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP").

ii. Investments: Investments are accounted at cost and are treated as long-term investments. The diminution in the market value of investment is recognized when diminution is considered permanent.

iii. Valuation of Inventory.

Raw materials and stores & spares: At cost determined on First in First out basis or net realizable value, whichever is lower.

Finished goods and waste cotton: At cost or net realizable value, whichever is lower. The cost has been measured on the weighted average cost basis and includes cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

Stock in Process: At estimated weighted average cost basis.

iv. The Fixed Assets are valued at historical cost. Cost includes related taxes, duties, freight, insurance etc., attributable to acquisition and installation of assets and borrowing cost incurred up to the date of commencing operations, but excludes duties and taxes that are recoverable from taxing authorities. The Fixed assets shown in the books are not revalued.

v. The Company has provided depreciation on straight-line basis in respect of fixed assets at the rates prescribed in Schedule XIV to the Companies Act, 1956. For assets costing Rs.5000/- or less, 100% depreciation has been charged in the year of purchase of such assets; For other assets acquired during the year pro-rata charge has been made from the date of first use; In the year of disposal of assets, depreciation is charged up to the date of disposal.

vi. The Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary items as at the Balance Sheet date are reported at the closing rate or at the rate at which it is likely to be realized from or required to be disbursed.

vii. "Foreign Currency Monetary item Translation difference Account" has been amortised as per notification G.S.R.225CE) of the Ministry of Corporate Affairs, Government of India dated 31.3.2009.

viii. The Company has opted for Life Insurance Corporation Employees Group Gratuity Scheme to cover its gratuity liability. Contribution paid/payable by the company to LIC of India is charged to revenue on the basis of actuarial valuation towards demand worked out by LIC.

Provident fund/pension fund and gratuity liability are Defined Contribution Schemes and contributions are charged to Profit and Loss Account of the year in which the contribution to the respective funds are due.

Short term employee benefits including compensated absences are provided for based on the expected obligation on an undiscounted basis as per Accounting Standard 15 (Revised).

ix. Borrowing costs attributable to the acquisition, construction and installation of qualifying capital assets are capitalized till the period before they are put into use.

x. Provisions, Contingent liabilities and- Contingent Assets: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are shown by way of notes attached to and forming part of the Balance Sheet. Contingent Assets are neither recognized nor disclosed in the financial statements.

xi. Impairment loss of fixed assets is assessed as at the close of each financial year and appropriate provision, if required, is recognized in the accounts.

xii. Current tax is determined at the current rates of income tax on taxable income and tax credits are computed in accordance with the provisions of the Income Tax Act, 1961. Fringe benefit tax provision is made in accordance with the provisions of the Income Tax Act, 1961.

xiii, Deferred tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the rates and tax laws that prevail as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xiv. Government grants have been recognized based on the reasonable assurance that the Company will comply with the conditions attached to the grants and the grants will be received. Government grants relatable to borrowing cost have been reduced from the borrowing cost thereby reducing the cost of the asset. Government grants relatable to periods after the acquisition, construction and installation of qualifying assets are in the nature of revenue grants and have been recognized on a systematic basis in the profit and loss account.

xv. The Company has operated only one business segment which is textile segment and hence segment report is not furnished.

xvi. The Companys significant leasing arrangements are operating leases and cancelable in nature. The lease rentals paid/received under such agreements are accounted in the profit and loss account.

 
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