Mar 31, 2014
I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared as of a going concern on
historical cost convention and on accrual method of accounting in
accordance with the generally accepted accounting principles, and the
provisions of the Companies Act, 1956 as adopted consistently the
Company.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted principles requires estimates and assumptions to be made which
would affect the assets, liabilities, revenues and expenses during the
reporting period. Such estimates are revised ongoing basis as a result
of new information, or subsequent development. Differences between the
actual results and estimates are recognized in the period in which the
results are known/materialized.
III. FIXED ASSETS
A. Tangible Assets:
Fixed assets are stated at original cost net of Tax/duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Cost includes preoperative
expenses (net of income accrued) and all expenses related to
acquisition and installation of the concerned assets and those incurred
upto the date of commercial production.
B. Intangible Assets:
Expenditure incurred in respect of acquisition and development of
designs, - patents and other intangibles up to the date of
commercialization are recognized as intangible assets if it is
identifiable, capable of being controlled and from which future
economic benefits are expected to flow to the enterprise. Intangible
assets are stated at cost net of tax/duty credits availed, if any, less
accumulated amortization and cumulative impairment.
IV. IMPAIRMENT OF ASSETS
As at each Balance sheet date, the carrying amount of assets is tested
for impairment so as to determine.
(i) The extent of recognition of impairment loss, if any, required or
(ii) The reversal, if any, required of impairment loss recognized in
previous periods.
Where the carrying amount of an asset exceeds,its recoverable amount;
such excess is recognized as impairment loss and charged to the
statement of profit and loss.
V. BORROWING COSTS
(i) Borrowing costs that are attributable to the manufacture,
acquisition or construction of qualifying assets, are included as part
of the cost of such assets. Other borrowing costs are recognized as
expense in the period in they are incurred.
(ii) A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
VI. DEPRECIATION AND AMORTIZATION
1) Depreciation on Fixed assets is charged as under:
a) On plant & Machinery of Spinning and Processing division acquired on
or after 1.4.1993 and on Wind mills on SLM basis as per Schedule XTV as
a continuous process plant. On all other plant and machinery acquired
on or after 1.4.1993 at general SLM rates as per Schedule XIV.
b) On Buildings on SLM basis as per Schedule XIV rates.
c) On all other assets (Including plant and machinery acquired on or
before 1.4.1993) on WDV basis at Schedule XIV rates.
2) Depreciation on additions and deletions of the fixed assets are
charged pro-rata basis.
3) Amortization on intangible assets is charged equally over the
estimated useful life of the asset, not exceeding three years,
commencing from the year of commercialization. The useful life is
estimated based on the evaluation of future economic benefits expected
to flow from such assets.
VII. INVESTMENTS
(i) Current investments are carried at lower of cost and fair value.
Unquoted investments are carried at cost.
(ii) Long term investments are carried at cost. However provisions for
diminution to recognize a decline, other temporary in the value of
investments is made.
VIII. INVENTORIES
Inventories are valued at lower of cost or net realizable value.
Finished Goods - Yarn, Madeups and Waste at weighted average cost or
net realizable value whichever is lower.
Raw Materials, Stock in Process, Stores and spares and canteen stock at
weighted average cost.
IX. REVENUE RECOGNITION
The Company recognizes income and expenditure on accrual basis and
recorded in the financial statements to the period to which they
relate. Revenue from sale transaction is recognized as and when
significant risks and rewards attached to ownership in the goods is
transferred to the buyer. Revenue from service transactions is
recognized on the completion of the contract. Dividend from
Investments, Export incentives under Duty Entitlement Pass Book
["DEPB"] Scheme and Duty Drawback Scheme are recognized when the right
to receive payment / credit is established and no significant
uncertainty as to measurability or collectability exists.
X. FOREIGN CURRENCY TRANSACTIONS
(i) All Foreign Currency Transactions are recorded at exchange rates
prevailing on the date of such transaction.
(ii) Foreign currency monetary assets and liabilities at reporting date
are realigned to the exchange rate prevailing at the said date and
difference on realignment is recognized in the Profit & Loss Account.
(iii) Exchange difference arising on the date of settlement is
recognized as income or expense in the period in which they arise.
(iv) Premium/ discount in respect of Forward Contracts are amortized as
expense / income over the period of contract.
(v) Non-monetary foreign currency items are carried at Cost.
XI. EMPLOYEE BENEFITS
(a) Short-term employee benefits are recognized as an expense at the
nominal values in the profit and loss account of the year in which the
related service is rendered.
(b) Post employment and other long-term benefits, which are defined
benefit plans are recognized as an expense in the profit and loss
account for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined on actuarial basis. The liability is assessed using
Projected Unit Credit (PUC) actuarial method. Actuarial gains & losses
are charged to the profit and loss account.
(c) Payments to defined contribution schemes are charged as expense as
and when incurred.
(d) There is no scheme for encashment of unavailed leave on retirement
since the unavailed earned leave is settled annually and accounted on
payment.
XII. TAXES ON INCOME
(i) Taxes on income are accrued in the same period as the revenue and
expenses to which they relate.
(ii) Current Tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961.
(iii) Deferred tax is recognized on timing differences between the
accounting income and the taxable income for the year, and quantified
using the tax rates and laws enacted or substantively enacted as on the
Balance Sheet date.
(iv) Deferred tax assets are recognized and carried forward to the
extent that there is a reasonable certainty that sufficient future
income will be available against which such deferred tax assets can be
realized.
XIII. PRIOR PERIOD ITEMS
Expenses/Income which arise in the current period as a result of errors
or omissions of one or more periods are included in the determination
of net profit or loss for the current period and are disclosed by way
of Notes to the Accounts.
XIV. EXTRAORDINARY ITEMS
Extraordinary items are income or expenses that arise from events or
transactions that are clearly distinct from the ordinary activities of
the company and, therefore, are not expected to recur frequently or
regularly and are disclosed by way of Notes to the Accounts.
XV. PROVISIONS, CONTINGENT LIABILITIES AND ASSETS
(i) Provision is recognized in respect of present obligations requiring
settlement by outflow of resources and of which a reliable estimate on
the amount of obligation could be made.
(ii) Contingent liability is not recognized and disclosed unless the
possibility of outflow of resources embodying economic benefit is
remote. Possibility obligation that arises from past events and the
existence of which is subject to occurrence or non occurrence of
uncertain future event/s is disclosed.
(iii) Contingent assets are neither recognized nor disclosed in the
financial statements.
XVI. GOVERNMENT GRANTS:
The company recognizes Government grants only when there is reasonable
assurance that the conditions attached to them shall be complied with
and the grants will be received. Grants relating to fixed assets are
shown as deduction from the gross value of the assets. Grants related
to revenue is recognized as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to
compensate. The capital grants towards promoters contribution is
recognized as capital reserve.
XVII.LEASE
Lease payments on assets taken on lease are recognized as an expense on
a straight line basis over the lease term.
Mar 31, 2013
I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared as of a going concern on
historical cost convention and on accrual method of accounting in
accordance with the generally accepted accounting principles, and the
provisions of the Companies Act, 1956 as adopted consistently the
Company.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted principles requires estimates and assumptions to be made which
would affect the assets, liabilities, revenues and expenses during the
reporting period. Such estimates are revised ongoing basis as a result
of new information, or subsequent development. Differences between the
actual results and estimates are recognized in the period in which the
results are known /materialized.
III. FIXED ASSETS
A. Tangible Assets:
Fixed assets are stated at original cost net of Tax/duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Cost includes preoperative
expenses (net of income accrued) and all expenses related to
acquisition and installation of the concerned assets and those incurred
upto the date of commercial production.
B. Intangible Assets:
Expenditure incurred in respect of acquisition and development of
designs, patents, and other intangibles up to the date of
commercialization are recognized as intangible assets if it is
identifiable, capable of being controlled and from which future
economic benefits are expected to flow to the enterprise. Intangible
assets are stated at cost net of tax/duty credits availed, if any, less
accumulated amortization and cumulative impairment.
IV. IMPAIRMENT OF ASSETS
As at each Balance sheet date, the carrying amount of assets is tested
for impairment so as to determine
(i) The extent of recognition of impairment loss, if any, required or
(ii) The reversal, if any, required of impairment loss recognized in
previous periods.
Where the carrying amount of an asset exceeds its recoverable amount;
such excess is recognized as impairment loss and charged to the
statement of profit and loss.
V. BORROWING COSTS
(i) Borrowing costs that are attributable to the manufacture,
acquisition or construction of qualifying assets, are included as part
of the cost of such assets. Other borrowing costs are recognized as
expense in the period in they are incurred.
(ii) A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
VI. DEPRECIATION AND AMORTIZATION
1) Depreciation on Fixed assets is charged as under:
a) On plant & Machinery of Spinning and Processing division acquired on
or after 1.4.1993 and on Wind mills on SLM basis as per Schedule XIV as
a continuous process plant. On all other plant and machinery acquired
on or after 1.4.1993 at general SLM rates as per Schedule XIV.
b) On Buildings on SLM basis as per Schedule XIV rates.
c) On all other assets (Including plant and machinery acquired on or
before 1.4.1993) on WDV basis at Schedule XIV rates.
2) Depreciation on additions and deletions of the fixed assets are
charged pro-rata basis.
3) Amortization on intangible assets is charged equally over the
estimated useful life of the asset, not exceeding three years,
commencing from the year of commercialization. The useful life is
estimated based on the evaluation of future economic benefits expected
to flow from such assets.
VII. INVESTMENTS
(i) Current investments are carried at lower of cost and fair value.
Unquoted investments are carried at cost.
(ii) Long term investments are carried at cost. However provisions for
diminution to recognize a decline, other temporary in the value of
investments is made.
VIII. INVENTORIES
Inventories are valued at lower of cost or net realizable value.
Finished Goods - Yarn, Madeups and Waste at weighted average cost or
net realizable value whichever is lower.
Raw Materials, Stock in Process, Stores and spares and canteen stock at
weighted average cost.
IX. REVENUE RECOGNITION
The Company recognizes income and expenditure on accrual basis and
recorded in the financial statements to the period to which they
relate. Revenue from sale transaction is recognized as and when
significant risks and rewards attached to ownership in the goods is
transferred to the buyer. Revenue from service transactions is
recognized on the completion of the contract. Dividend from
Investments, Export incentives under Duty Entitlement Pass Book
["DEPB"] Scheme and Duty Drawback Scheme are recognized when the right
to receive payment / credit is established and no significant
uncertainty as to measurability or collectability exists.
X. FOREIGN CURRENCY TRANSACTIONS
(i) All Foreign Currency Transactions are recorded at exchange rates
prevailing on the date of such transaction.
(ii) Foreign currency monetary assets and liabilities at reporting date
are realigned to the exchange rate prevailing at the said date and
difference on realignment is recognized in the Profit & Loss Account.
(iii) Exchange difference arising on the date of settlement is
recognized as income or expense in the period in which they arise.
(iv) Premium/ discount in respect of Forward Contracts are amortized as
expense / income over the period of contract.
(v) Non-monetary foreign currency items are carried at Cost.
XI. EMPLOYEE BENEFITS
(a) Short-term employee benefits are recognized as an expense at the
nominal values in the profit and loss account of the year in which the
related service is rendered.
(b) Post employment and other long-term benefits, which are defined
benefit plans are recognized as an expense in the profit and loss
account for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined on actuarial basis. The liability is assessed using
Projected Unit Credit (PUC) actuarial method. Actuarial gains & losses
are charged to the profit and loss account.
(c) Payments to defined contribution schemes are charged as expense as
and when incurred.
(d) There is no scheme for encashment of unavailed leave on retirement
since the unavailed earned leave is settled annually and accounted on
payment.
XII. TAXES ON INCOME
(i) Taxes on income are accrued in the same period as the revenue and
expenses to which they relate.
(ii) Current Tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961.
(iii) Deferred tax is recognized on timing differences between the
accounting income and the taxable income for the year, and quantified
using the tax rates and laws enacted or substantively enacted as on the
Balance Sheet date.
(iv) Deferred tax assets are recognized and carried forward to the
extent that there is a reasonable certainty that sufficient future
income will be available against which such deferred tax assets can be
realized.
XIII. PRIOR PERIOD ITEMS
Expenses/Income which arise in the current period as a result of errors
or omissions of one or more periods are included in the determination
of net profit or loss for the current period and are disclosed by way
of Notes to the Accounts.
XIV. EXTRAORDINARY ITEMS
Extraordinary items are income or expenses that arise from events or
transactions that are clearly distinct from the ordinary activities of
the company and, therefore, are not expected to recur frequently or
regularly and are disclosed by way of Notes to the Accounts.
XV. PROVISIONS, CONTINGENT LIABILITIES AND ASSETS
(i) Provision is recognized in respect of present obligations requiring
settlement by outflow of resources and of which a reliable estimate on
the amount of obligation could be made.
(ii) Contingent liability is not recognized and disclosed unless the
possibility of outflow of resources embodying economic benefit is
remote. Possibility obligation that arises from past events and the
existence of which is subject to occurrence or non occurrence of
uncertain future event/s is disclosed.
(iii) Contingent assets are neither recognized nor disclosed in the
financial statements.
XVI. GOVERNMENT GRANTS:
The company recognizes Government grants only when there is reasonable
assurance that the conditions attached to them shall be complied with
and the grants will be received. Grants relating to fixed assets are
shown as deduction from the gross value of the assets. Grants related
to revenue is recognized as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to
compensate. The capital grants towards promoters contribution is
recognized as capital reserve.
XVII.LEASE
Lease payments on assets taken on lease are recognized as an expense on
a straight line basis over the lease term.
Mar 31, 2012
I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared as of a going concern on
historical cost convention and on accrual method of accounting in
accordance with the generally accepted accounting principles, and the
provisions of the Companies Act, 1956 as adopted consistently the
Company.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted principles requires estimates and assumptions to be made which
would affect the assets, liabilities, revenues and expenses during the
reporting period. Such estimates are revised ongoing basis as a result
of new information, or subsequent development. Differences between the
actual results and estimates are recognized in the period in which the
results are known /materialized.
III. FIXED ASSETS
A. Tangible Assets:
Fixed assets are stated at original cost net of Tax/duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Cost includes preoperative
expenses (net of income accrued) and all expenses related to
acquisition and installation of the concerned assets and those incurred
upto the date of commercial production.
B. Intangible Assets:
Expenditure incurred in respect of acquisition and development of
designs, patents and other intangibles up to the date of
commercialization are recognized as intangible assets if it is
identifiable, capable of being controlled and from which future
economic benefits are expected to flow to the enterprise. Intangible
assets are stated at cost net of tax/duty credits availed, if any, less
accumulated amortization and cumulative impairment.
IV. IMPAIRMENT OF ASSETS
As at each Balance sheet date, the carrying amount of assets is tested
for impairment so as to determine
(i) The extent of recognition of impairment loss, if any, required or
(ii) The reversal, if any, required of impairment loss recognized in
previous periods.
Where the carrying amount of an asset exceeds its recoverable amount;
such excess is recognized as impairment loss and charged to the
Statement of . Profit and Loss.
V. BORROWING COSTS
(i) Borrowing costs that are attributable to the manufacture,
acquisition or construction of qualifying assets, are included as part
of the cost of such assets. Other borrowing costs are recognized as
expense in the period in they are incurred.
(ii) A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
VI. DEPRECIATION AND AMORTIZATION
1) Depreciation on Fixed assets is charged as under:
a) On plant & Machinery of Spinning and Processing division acquired on
or after 1.4.1993 and on Wind mills on SLM basis as per Schedule XIV as
a continuous process plant.
On all other plant and machinery acquired on or after 1.4.1993 at
general SLM rates as per Schedule XIV.
b) On Buildings on SLM basis as per Schedule XIV rates.
c) On all other assets (Including plant and machinery acquired on or
before 1.4.1993) on WDV basis at Schedule XIV rates.
2) Depreciation on additions and deletions of the fixed assets are
charged pro-rata basis.
3) Amortization on intangible assets is charged equally over the
estimated useful life of the asset, not exceeding three years,
commencing from the year of commercialization. The useful life is
estimated based on the evaluation of future economic benefits expected
to flow from such assets.
VII. INVESTMENTS
(i) Current investments are carried at lower of cost and fair value.
Unquoted investments are carried at cost.
(ii) Long term investments are carried at cost. However provisions for
diminution to recognize a decline, other temporary in the value of
investments is made.
VIII. INVENTORIES
Inventories are valued at lower of cost or net realizable value.
Finished Goods - Yarn, Madeups and Waste at weighted average cost or
net realizable value whichever is lower.
Raw Materials, Stock in Process, Stores and spares and canteen stock at
weighted average cost.
IX. REVENUE RECOGNITION
The Company recognizes income and expenditure on accrual basis and
recorded in the financial statements to the period to which they
relate. Revenue from sale transaction is recognized as and when
significant risks and rewards attached to ownership in the goods is
transferred to the buyer. Revenue from service transactions is
recognized on the completion of the contract. Dividend from
Investments, Export incentives under Duty Entitlement Pass Book
["DEPB"] Scheme and Duty Drawback Scheme are recognized when the right
to receive payment / credit is established and no significant
uncertainty as to measurability or collectability exists.
X. FOREIGNCURRENCY TRANSACTIONS
(i) All Foreign Currency Transactions are recorded at exchange rates
prevailing on the date of such transaction.
(ii) Foreign currency monetary assets and liabilities at reporting date
are realigned to the exchange rate prevailing at the said date and
difference on realignment is recognized in the Statement of Profit &
Loss.
(iii) Exchange difference arising on the date of settlement is
recognized as income or expense in the period in which they arise.
(iv) Premium / discount in respect of Forward Contracts are amortized
as expense / income over the period of contract.
(v) Non-monetary foreign currency items are carried at Cost.
XI. EMPLOYEE BENEFITS
(a) Short-term employee benefits are recognized as an expense at the
nominal values in the profit and loss account of the year in which the
related service is rendered.
(b) Post employment and other long-term benefits, which are defined
benefit plans are recognized as an expense in the profit and loss
account for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined on actuarial basis. The liability is assessed using
Projected Unit Credit (PUC) actuarial method. Actuarial gains & losses
are charged to the profit and loss account.
(c) Payments to defined contribution schemes are charged as expense as
and when incurred.
(d) There is no scheme for encashment of unavailed leave on retirement
since the unavailed earned leave is settled annually and accounted on
payment.
XII. TAXES ON INCOME
(i) Taxes on income are accrued in the same period as the revenue and
expenses to which they relate.
(ii) Current Tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961.
(iii) Deferred tax is recognized on timing differences between the
accounting income and. the taxable income for the year, and quantified
using the tax rates and laws enacted or substantively enacted as on the
Balance Sheet date.
iv) Deferred tax assets are recognized and carried forward to the
extent that there is a reasonable certainty that sufficient future
income will be available against which such deferred tax assets can be
realized.
XIII. PRIOR PERIOD ITEMS
Expenses/Income which arise in the current period as a result of errors
or omissions of one or more periods are included in the determination
of net profit or loss for the current period and are disclosed by way
of Notes to the Accounts.
XIV. EXTRAORDINARY ITEMS
Extraordinary items are income or expenses that arise from events or
transactions that are clearly distinct from the ordinary activities of
the company and, therefore, are not expected to recur frequently or
regularly and are disclosed by way of Notes to the Accounts.
XV. PROVISIONS, CONTINGENT LIABILITIES AND ASSETS
(i) Provision is recognized in respect of present obligations requiring
settlement by outflow of resources and of which a reliable estimate on
the amount of obligation could be made.
(ii) Contingent liability is not recognized and disclosed unless the
possibility of outflow of resources embodying economic benefit is
remote. Possibility obligation that arises from past events and the
existence of which is subject to occurrence or non occurrence of
uncertain future event/s is disclosed.
(iii) Contingent assets are neither recognized nor disclosed in the
financial statements.
XVI. GOVERNMENT GRANTS:
The company recognizes Government grants only when there is reasonable
assurance that the conditions attached to them shall be complied with
and the grants will be received. Grants relating to fixed assets are
shown as deduction from the gross value of the assets. Grants related
to revenue is recognized as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to
compensate. The capital grants towards promoters contribution is
recognized as capital reserve.
XVII. LEASE
Lease payments on assets taken on lease are recognized as an expense on
a straight line basis over the lease term.
Mar 31, 2011
I. METHOD OF ACCOUNTING
The financial statements are prepared under historical cost convention
and on accrual basis and in accordance with provisions of the Companies
Act, 1956, and accounting principles generally accepted in India and
comply with the Accounting Standards prescribed by The Companies
(Accounting Standards) Rules 2006 issued by the Government of India to
the extent applicable. The accounting is on the basis of a going
concern concept.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted principles requires estimates and assumptions to be made that
affect the reported amounts of assets and liabilities on the date of
financial statements and the reported amounts of revenues and expenses
during the reporting period. Differences between actual results and
estimates are recognised in the period in which the results are known
/materialized.
III. FIXED ASSETS
1) Fixed assets are stated at historical cost net of CENVAT / VAT
including appropriate direct and allocated pre-operative expenses.
2) Depreciation on Fixed assets is charged as under:
a) On plant & Machinery of Spinning and Processing division acquired on
or after 1.4.1993 and on Wind mills on SLM basis as per Schedule XIV as
a continuous process plant. On all other plant and machinery acquired
on or after 1.4.1993 at general SLM rates as per Schedule XIV.
b) On Buildings on SLM basis as per Schedule XIV rates.
c) On all other assets (Including plant and machinery acquired on or
before 1.4.1993) on WDV basis at Schedule XIV rates.
3) Depreciation on additions and deletions of the fixed assets are
charged pro-rata basis.
IV. INVESTMENTS
Long Term Investments are carried at cost inclusive of all expenses
incidental to acquisition. Provision for diminution in value of long
term investments is made only if such a decline is other than temporary
in nature in the opinion of the management. Such diminution, if
temporary, in the opinion of the management is not recognized.
V. INVENTORIES
Inventories are valued as under:
Finished Goods - Yarn, Madeups and Waste at weighted average cost or
net realizable value whichever is lower.
Raw Materials, Stock in Process, Stores and spares and canteen stock at
weighted average cost.
VI. REVENUE RECOGNITION
Income and Expenditure are recognized and accounted on accrual basis as
and when they are earned or incurred. Revenue from sale transaction is
recognized as and when significant risks and rewards attached to
ownership in the goods is transferred to the buyer. Revenue from
service transactions is recognized on the completion of the contract.
Dividend from
Investments, Export incentives under Duty Entitlement Pass Book
["DEPB"] Scheme and Duty Drawback Scheme are recognized when the right
to receive payment / credit is established and no significant
uncertainty as to measurability or collectability exists.
VII. EMPLOYEE BENEFITS
Short Term employee benefits (other than termination benefits) which
are payable within 12 months after the end of the period in which the
employees rendered service are accounted on accrual basis.
Defined Contribution Plans
Company's contribution paid /payable during the year to Provident Fund
and ESIC are recognized in the profit and loss account.
Defined Benefit Plans
Company's liabilities towards gratuity is determined using the
projected unit credit method which considers each period of service as
giving rise to an additional unit of benefit entitlement and measures
each unit separately to build up the final obligation. Past services
are recognized on a straight line basis over the average period until
the amended benefits becomes vested. Actuarial gains or losses are
recognized immediately in the statement of profit and loss account as
income or expenses. Obligation is measured at the present value of
estimated future cash flows using a discounted rate that is determined
by reference to market yields at the balance sheet date on government
bonds where the currency and terms of the government bonds are
consistent with currency and estimated terms of the defined benefit
obligations. The expected return on plan assets is based on market
expectations at the beginning of the period for returns over the entire
life of the related obligations.
There is no scheme for encashment of unavailed leave on retirement
since unavailed earned leave is settled annually and accounted on
payment.
VIII. BORROWING COST
Interest and other incidental preoperative costs in connection with the
borrowing of the funds to the extent related /attributed to the
acquisition/ construction of qualifying fixed assets/project are
capitalised up to the date when such assets/project are ready for its
intended use and other borrowing costs are charged to Profit and Loss
Account.
IX TAXES ON INCOME
Current Tax is determined as per the provisions of the Income tax act
1961 in respect of taxable income for the year and based on the
expected outcome of assessment/appeals.
Deferred Tax assets and liabilities are recognized on timing
differences between accounting income and taxable income that originate
in one period and are capable or reversal in one or more subsequent
period and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets, other than those arising on account of unabsorbed
depreciation or carried forward business losses under tax laws, are
recognized and carried forward subject to consideration or prudence
only to the extent that there is reasonable certainty that sufficient
future income will be available against which such deferred tax assets
can be realized.
Deferred tax assets arising on account of unabsorbed depreciation or
carried forward business losses are recognized only when there is
virtual certainty with convincing evidence that sufficient future
taxable income will be available against which such deferred tax asset
can be related and only to the extent that there are deferred tax
liabilities offsetting them.
X. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rates prevailing at
the date of transaction. Exchange difference arising on final
settlement are recognized as income or expenses in the year in which
they arise. Outstanding balances before final settlement are converted
at the exchange rates on the last date of the financial year and
difference adjusted in revenue account where material.
XI. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
XII. DEFERRED REVENUE EXPENDITURE
a) New product development expenditure is amortized over a period of 3
years commencing from the year following the year of expenditure.
b) Pre-operative expenses related to integrated project are accumulated
for capitalization on commissioning of the project.
XIII. CASH FLOW STATEMENT
Cash Flows are reported using the Indirect method, whereby profit
before tax is adjusted for the effects of transaction of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payment and items of income or expense associated with
investing or financing cash flows. Cash and cash equivalents include
cash on hand and balance with banks in current and deposit accounts
with necessary disclosure of cash and cash equivalent balances that are
not available for use by the Company.
XIV. EARNINGS PER SHARE
Basic Earning per share is calculated by dividing the Net Profit after
tax attributable to the shareholders by the weighted average number of
Equity Shares outstanding during the year.
XV. EXPENDITURE ON CONSTRUCTION PERIOD
Pre-operative expenditure incurred on projects / assets during the
construction/ implementation net of pre-operative income, if any, is
capitalized and apportioned to projects/ assets on commissioning.
XVI. CONTINGENT LIABILITIES:
Contingent liabilities as defined in accounting standard 29 are
disclosed in the notes to accounts. Provisions is made if it became
probable that an outflow of future economic benefits will be required
for an item previously dealt with it as a contingent liability
XVII. GOVERNMENT GRANTS:
The Company recognizes Government grants only when there is reasonable
assurance that the conditions attached to them shall be complied with
and the grants will be received. Grants relating to fixed assets are
shown as deduction from the gross value of the assets. Grants related
to revenue is recognized as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to
compensate. The capital grants towards promoters contribution is
recognized as capital reserve.
Mar 31, 2010
I. METHOD OF ACCOUNTING
The financial statements are prepared under historical cost convention
and on accrual basis and in accordance with provisions of the Companies
Act 1956 and accounting principles generally accepted in India and
comply with the Accounting Standards prescribed by the Companies
(Accounting Standards) Rules, 2006 issued by the Government of India to
the extent applicable. The accounting is on the basis of a going
concern concept.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognized in the period in which the results
are known/ materialized.
III. FIXED ASSETS
1) Fixed assets are stated at historical cost net of CENVAT /VAT
including appropriate direct and allocated pre-operative expenses.
2) Depreciation on Fixed assets is charged as under:
a) On Plant & Machinery of Spinning and Processing division acquired on
or after 1.4.1993 and on Wind mills on SLM basis as per Schedule XIV as
a continuous process plant. On all other plant and machinery acquired
on or after 1.4.1993 at general SLM rates as per Schedule XIV.
b) On Buildings on SLM basis as per Schedule XIV rates.
c) On all other assets (including Plant & machinery acquired on or
before 1.4.1993) on WDV basis at schedule XIV rates
3) Depreciation on additions and deletions of the fixed assets are
charged pro - rata.
IV. INVESTMENTS
Long Term Investments are carried at cost inclusive of all expenses
incidental to acquisition. Provision for diminution in value of Long
Term Investments is made only if such a decline is other than temporary
in nature in the opinion of the management. Such diminution, if
temporary, in the opinion of the management is not recognized.
V. INVENTORIES
Inventories are valued as under:
Finished Goods - Yarn, Made ups and Waste at weighted average cost or
net realisable value whichever is lower.
Raw Materials, Stock in process, stores and spares and canteen stock at
weighed average cost.
VI. REVENUE RECOGNITION
Income and Expenditure are recognized and accounted on accrual basis as
and when they are earned or incurred. Revenue from sale transaction is
recognized as and when significant risks and rewards attached to
ownership in the goods is transferred to the buyer. Revenue from
service transactions is recognized on the completion of the contract.
Dividend from investments, Export incentives under Duty Entitlement
Pass Book ["DEPB"] Scheme and Duty Drawback Scheme are recognized when
the right to receive payment / credit is established and no significant
uncertainty as to measurability or collectability exists.
VII. EMPLOYEE BENEFITS
Short term employee benefits (other than termination benefits) which
are payable within 12 months after the end of the period in which the
employees rendered service are accounted on accrual basis.
Defined Contribution Plans
Companys contribution paid/payable during the year to Provident Fund
and ESIC are recognized in the profit and loss account.
Defined Benefit Plans
Companys liabilities towards gratuity is determined using the
projected unit credit method which considers each period of service as
giving rise to an additional unit of benefit entitlement and measures
each unit separately to build up the final obligation. Past services
are recognized on a straight line basis over the average period until
the amended benefits becomes vested. Actuarial gains or losses are
recognized immediately in the statement of profit and loss account as
income or expenses. Obligation is measured at the present value of
estimated future cash flows using a discounted rate that is determined
by reference to market yields at the balance sheet date on government
bonds where the currency and terms of the government bonds are
consistent with currency and estimated terms of the defined benefit
obligations. The expected return on plan assets is based on market
expectations at the beginning of the period for returns over the entire
life of the related obligations.
There is no scheme for encashment of unavailed leave on retirement
since unavailed earned leave is settled annually and accounted on
payment.
VIII. BORROWING COST
Interest and other incidental preoperative costs in connection with the
borrowing of the funds to the extent related/attributed to the
acquisition/construction of qualifying fixed assets/project are
capitalized up to the date when such assets/project are ready for its
intended use and other borrowing costs are charged to Profit and Loss
Account.
IX. TAXES ON INCOME
Current tax is determined as per the provisions of the Income tax Act,
1961 in respect of taxable income for the year and based on the
expected outcome of assessment / appeals.
Deferred Tax assets and liabilities are recognized on timing
differences between accounting income and taxable income that originate
in one period and are capable of reversal in one or more subsequent
period and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets, other than those arising on account of unabsorbed
depreciation or carried forward business losses under tax laws, are
recognized and carried forward subject to consideration of prudence
only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
Deferred tax assets arising on account of unabsorbed depreciation or
carried forward business losses are recognised only when there is
virtual certainty with convincing evidence that sufficient future
taxable income will be available against which such deferred tax asset
can be realised.
X. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rates prevailing at
the date of transaction. Exchange differences arising on final
settlement are recognized as income or expenses in the year in which
they arise. Outstanding balances before final settlement are converted
at the exchange rates on the last date of the financial year and
difference adjusted in revenue account where material.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
XI. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
XII. DEFERRED REVENUE EXPENDITURE
a) New product development expenditure is amortised over a period 3
years commencing from the year following the year of expenditure.
b) Pre-operative expenses related to the integrated project are
accumulated for capitalization on commissioning of the project.
XIII. CASH FLOW STATEMENT:
Cash Flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and items of income or expense associated with
investing or financing cash flows. Cash and cash equivalents include
cash on hand and balance with banks in current and deposit accounts
with necessary disclosure of cash and cash equivalent balances that are
not available for use by the company.
XIV. CONTINGENT LIABILITIES:
Contingent Liabilities as defined in Accounting Standard 29 are
disclosed in the notes to accounts. Provision is made if it became
probable that an outflow of future economic benefits will be required
for an item previously dealt with it as a contingent liability.
XV. EARNINGS PER SHARE
Basic Earnings per share is calculated by dividing the Net Profit after
tax attributable to the shareholders by the weighted average number of
equity shares outstanding during the year.
XVI. EXPENDITURE DURING CONSTRUCTION PERIOD
Pre-operative expenditure incurred on projects / assets during the
construction / implementation is capitalized and apportioned to
projects / assets on commissioning
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