Accounting Policies of Jindal Cotex Ltd. Company

Mar 31, 2016

I. ACCOUNTING CONVENTION

The financial statements, other than the Cash Flow Statement, are prepared under the historical cost convention, treating the entity as a going concern and in accordance with the applicable accounting standards and relevant provisions of the Companies Act, 2013.

I(a) CHANGE IN ACCOUNTING POLICY

With effect from 01/04/2014 company has with retrospective effect changed its method of providing depreciation on fixed assets from the written down value method to straight line method as per the rates prescribed in the part C of Schedule II of the Companies act 2013.

Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets.

II. REVENUE RECOGNITION

Revenue from domestic sale of goods is recognized at the time of dispatch of goods from the factory. Sales are exclusive of VAT and CST. Export sales are booked on the basis of the date of Bill of Lading.

III. FIXED ASSETS

Fixed Assets are stated at cost, net of taxes and duties subsequently recoverable from government authorities less accumulated depreciation and impairment loss, if any. Government grants relating to specific fixed assets are treated as deferred income, which is recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the asset. All costs attributable to bringing the asset to its working condition for its intended use, including financing costs till commencement of commercial production and charges on foreign exchange contracts and adjustments arising out of exchange rate variations attributable to the fixed assets are capitalized.

IV. DEPRECIATION

Pursuant to the enactment of the companies Act 2013,the Company has applied the estimated useful lives as specified in schedule II. Accordingly the unamortized carrying value is being depreciated over the Revised/remaining useful lives.

V. INVENTORIES

Inventories are valued at cost or net realizable value, whichever is lower. Raw Material and stores are valued at cost determined on a weighted average basis. Work in process is valued at cost plus an appropriate share of overheads depending upon the stage of completion. Finished Goods are valued taking into account the raw material cost, conversion cost and the overheads incurred to bring the goods to their present location and condition.

VI. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency transactions are accounted for at exchange rate prevailing on the date of transaction. Premium on forward cover contracts in respect of import of raw materials is charged to the Statement of Profit and Loss over the period of contract. Amounts payable and receivable in foreign currency at the Balance Sheet date, not covered by forward contracts, are restated at the applicable exchange rate prevailing on the date of the Balance Sheet. All exchange differences, if any, arising on revenue transactions are charged/credited to the Statement of Profit and Loss.

VII. TAXATION

Provision for current tax is made in accordance with the provisions of the Income Tax law applicable for the relevant year. Deferred tax asset/liability is created in accordance with the requirements of Accounting Standard 22"Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred Tax Asset is created only to the extent there is virtual certainty that future taxable income will be available against which such deferred tax asset can be realized.

In terms of the Guidance Note on "Accounting for Credit available in respect of Minimum Alternate Tax (MAT) under the Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India, MAT credit is recognized as an asset only to the extent there is a convincing evidence that the company will be paying regular income tax during the specified period.

VIII. EMPLOYEE BENEFITS:

(a) Short-Term Employee benefits

Employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits and are recognized in the period in which the employee renders the related services.

(b) Post-employment benefits Defined benefits Plans:

The employee gratuity scheme is a defined benefit plan. The present value of defined benefit obligation as at the end of the year is determined using the Projected Unit Credit method i.e. each period of service rendered by the employee is considered to give rise to an additional unit of benefit entitlement, gradually building up the final obligation.

The liability on account of compensated absences i.e. leave with wages is accounted for on the basis of unutilized leave standing to the credit of the employee at the close of the year.

The company was required to get actuarial valuation of employment benefits but no valuation was done in this aspect.

IX. PROVISIONS AND CONTINGENCIES:

Provision is recognized in the balance sheet when, the company has a present obligation as a result of past events and it is probable that an outflow of economic resources will be required to settle the obligations, and a reliable estimate of the amount of the obligation can be made. A disclosure by way of contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statements.

Rights, preference and restrictions attaching to each class of shares

"Equity Shares: The company has only one class of equity shares having par value of Rs. 10/- per share. Each holders of equity shares present is entitled to have one vote upon show of hands and upon a poll every member entitled to vote and present in person or by proxy shall have one vote, for every share held by him.

The profits of the Company subject to any special rights relating thereto created or authorized to be created shall be divisible among the members in proportion to the amount of Capital paid up or credited as paid up on the shares held by them respectively.

The Company in general meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits and may fix the time for payment.

Dividend shall be paid by the Company in respect of any share only to the registered holder of such share or to his order or to his banker.

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

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Mar 31, 2015

I. ACCOUNTING CONVENTION

The financial statements, other than the Cash Flow Statement, are prepared under the historical cost convention, treating the entity as a going concern and in accordance with the applicable accounting standards and relevant provisions of the Companies Act, 2013.

(a) CHANGE IN ACCOUNTING POLICY

With effect from 01/04/2014 company has with retrospective effect changed its method of providing depreciation on fixed assets from the written down value method to straight line method as per the rates prescribed in the part C of Schedule II of the Companies act 2013.

Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets.

II. REVENUE RECOGNITION

Revenue from domestic sale of goods is recognized at the time of dispatch of goods from the factory. Sales are exclusive of VAT and CST. Export sales are booked on the basis of the date of Bill of Lading.

III. FIXED ASSETS

Fixed Assets are stated at cost, net of taxes and duties subsequently recoverable from government authorities less accumulated depreciation and impairment loss, if any. Government grants relating to specific fixed assets are treated as deferred income, which is recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the asset.

All costs attributable to bringing the asset to its working condition for its intended use, including financing costs till commencement of commercial production and charges on foreign exchange contracts and adjustments arising out of exchange rate variations attributable to the fixed assets are capitalized.

IV. DEPRECIATION

Pursuant to the enactment of the companies Act 2013,the Company has applied the estimated usefuL lives as specified in schedule II. Accordingly the unamortized carrying value is being depreciated 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 profit and loss appropriation by Rs 90.26 lacs.

V. INVENTORIES

Inventories are valued at cost or net realizable value, whichever is lower. Raw Material and stores are valued at cost determined on a weighted average basis. Work in process is valued at cost plus an appropriate share of overheads depending upon the stage of completion. Finished Goods are valued taking into account the raw material cost, conversion cost and the overheads incurred to bring the goods to their present location and condition.

VI. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency transactions are accounted for at exchange rate prevailing on the date of transaction. Premium on forward cover contracts in respect of import of raw materials is charged to the Statement of Profit and Loss over the period of contract. Amounts payable and receivable in foreign currency at the Balance Sheet date, not covered by forward contracts, are restated at the applicable exchange rate prevailing on the date of the Balance Sheet. All exchange differences, if any, arising on revenue transactions are charged/credited to the Statement of Profit and Loss.

VII TAXATION

Provision for current tax is made in accordance with the provisions of the Income Tax law applicable for the relevant year. Deferred tax asset/liability is created in accordance with the requirements of Accounting Standard 22 "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred Tax Asset is created only to the extent there is virtual certainty that future taxable income will be available against which such deferred tax asset can be realized.

In terms of the Guidance Note on "Accounting for Credit available in respect of Minimum Alternate Tax (MAT) under the Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India, MAT credit is recognized as an asset only to the extent there is a convincing evidence that the company will be paying regular income tax during the specified period.

VIII EMPLOYEE BENEFITS:

(a) Short-Term Employee benefits

Employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits and are recognized in the period in which the employee renders the related services.

(b) Post-employment benefits Defined benefits Plans:

The employee gratuity scheme is a defined benefit plan. The present value of defined benefit obligation as at the end of the year is determined using the Projected Unit Credit method i.e. each period of service rendered by the employee is considered to give rise to an additional unit of benefit entitlement, gradually building up the final obligation.

The liability on account of compensated absences i.e. leave with wages is accounted for on the basis of unutilized leave standing to the credit of the employee at the close of the year.

The companywas required to get actuarial valuation of employment benefits but no valuation was done in this aspect.

IX PROVISIONS AND CONTINGENCIES:

Provision is recognized in the balance sheet when, the company has a present obligation as a result of past events and it is probable that an outflow of economic resources will be required to settle the obligations, and a reliable estimate of the amount of the obligation can be made. A disclosure by way of contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2014

A. a) Accounting convention

The financial statements, except for the cash flow statement are prepared on accrual basis under the historical cost convention, treating the entity as going concern and in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Use of Estimates

The preparation of financial statements is in conformity with the generally accepted accounting principles. The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialize.

B. Revenue Recognition:

a) Sales:

Revenue from domestic sale of goods is recognized at the time of dispatch of goods from the factory, which generally coincides the transfer of risks and rewards of ownership. Revenue from export sales of goods is recognized on the basis of the date of bill of lading.

Sales are exclusive of excise duty, sales tax/VAT and trade discount.

b) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Export Benefits/Incentive:

Revenue in respect of the above benefit is recognized in line with the recognition of revenue from export of goods.

d) Insurance and Other Claims:

Insurance claims are recognized on receipt basis.

C. Inventories

Inventories are valued at cost or net realizable value, whichever is lower after providing obsolescence ,if any. The cost in respect of various items of inventory is determined as under

- In case of raw materials and stores & spares, at fifo basis plus direct expenses.

- In case of work in process, at raw material cost plus conversion cost depending the stage of completion.

- In case of finished goods, at raw material cost, conversion costs and other overheads incurred to bring the goods to their present location and condition plus excise duty wherever applicable.

D. Employee Benefits

(a) Short-term employee benefits:

Short-term employee benefits are recognized as an expense in the Statement of Profit and Loss in the year in which the related services are rendered by the employees.

(b) Retirement Benefits:

Defined contribution plans:

Contributions to the employees'' provident fund are made in accordance with the provisions of the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Such contributions are charged to the Statement of Profit and Loss of the year in which the related services are rendered by the employees.

Defined benefit plans:

i) Gratuity:

Liability in respect of gratuity is accounted for on the basis of an independent actuarial valuation. The present value of defined benefit obligation as at the end of the year is determined using the Projected Unit Credit method i.e. each period of service rendered by the employee is considered to give rise to an additional unit of benefit entitlement, gradually building up the final obligation.

ii) Leave with Wages:

Liability in respect of leave with wages is accounted for by making provision on actual basis on the unutilized leaves standing credit to the employee.

E. Fixed Assets

Fixed assets are stated at the cost of acquisition or construction less accumulated depreciation and net of taxes and duties subsequently refundable from government authorities. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Machinery spares whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of asset.

F. Intangible assets

Intangible assets are stated at cost less accumulated amount of amortization.

G. Capital Work in Progress

Projects under commissioning and other Capital Work in Progress are carried at Cost, comprising direct cost, related incidental expenses, indirect expenditure and attributable interest related to that project.

H. Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

I. Depreciation

Depreciation is provided in accordance with and in the manner and at the rates specified in schedule XIV to the Companies Act, 1956 as under:

a) on written down value basis for assets acquired prior to 06/03/2006

b) on straight line basis for assets acquired after that date.

j. Foreign Currency Conversion/Translation

Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of the transactions. Foreign exchange monetary items outstanding as at the Balance Sheet date are reported using the rate prevailing at the end of the year, Gains and Losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of Profit and Loss .

In case of a foreign subsidiary, being a non integral operation the long term monetary items are restated at the exchange rate prevailing on the reporting date and the difference if any arising thereon is taken in for currency translation reserve and the short term monetary items are also restated at the exchange rate prevailing on the reporting date and the difference arising thereupon is recognized in Profit & Loss A/c.

J. Borrowing Costs

Borrowing cost attributable to construction periods is capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

K. Investments

Long term investments are carried at cost, less provision for diminution, if it is of permanent nature in value of such investments.

L. Accounting for Taxes on Income

- Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

- Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for at the enacted rate of tax to the extent that the timing differences are expected to reverse in future. Deferred Tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

M. Cash Flow Statement.

The company has prepared the Cash Flow Statement using the Indirect Method in compliance of Accounting Standard 3 "Cash Flow Statement" issued by The Institute of Chartered Accountants of India.

N Segmental Reporting

The company is principally engaged in the business of textiles (mainly manufacturing of yarn of different kinds and trading of knitted cloth & acrylic top etc.) and the project of wind mill (for generation of electricity for re-sale.) The company is also operating in different geographical segments. The relevant information about these segments are given in the Notes on Accounts.

Equity Shares: The company has only one class of equity shares having par value of Rs. 10/- per share. Each holders of equity shares present is entitled to have one vote upon show of hands and upon a poll every member entitled to vote and present in person or by proxy shall have one vote, for every share held by him.

The profits of the Company subject to any special rights relating thereto created or authorised to be created shall be divisible among the members in proportion to the amount of Capital paid up or credited as paid up on the shares held by them respectively.

The Company in general meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits and may fix the time for payment

Dividend shall be paid by the Company in respect of any share only to the registered holder of such share or to his order or to his banker. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realized value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

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Mar 31, 2013

A. a) Accounting convention

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Going Concern Convention

The accounts of the company have been prepared on going concern basis.

c) Use of Estimates

The preparation of financial statements is in conformity with the generally accepted accounting principles. The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

B. Revenue Recognition:

a) Sales:

Sales comprise sale of goods, services and export incentives net of excise duty, sales tax/VAT and trade discount. Revenue from sale of goods is recognized:

i) When all the Significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

b) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Export Benefits/Incentive:

Revenue in respect of the above benefit is recognized on post export basis.

d) Insurance and Other Claims:

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized.

C. Retirement/ Other Employee Benefits

(a) Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

(b) Provident Fund

Contribution to Provident Fund is made in accordance with the provisions of the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 and charged to the Profit & Loss Account.

(c) Leave with wages

Provision for leave with wages is made on the basis of leave accrued to the workers during the financial year.

D. Fixed Assets

Fixed assets are stated at the values at which they are acquired, less accumulated depreciation and cenvat credit if availed. The cost of fixed assets included interest on borrowing attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Machinery spares whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of asset.

E. Intangible assets

Intangible assets are stated at cost less accumulated amount of amortization.

F. Capital Work in Progress

Projects under commissioning and other Capital Work in Progress are carried at Cost, comprising direct cost, related incidental expenses, indirect expenditure and attributable interest related to that project.

G. Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

H. Depreciation

Depreciation is provided in accordance with and in the manner and at the rates specified in schedule XIV to the Companies Act, 1956 as under:

a) on written down value basis for assets acquired prior to 06/03/2006 and

b) on straight line basis for assets acquired after that date.

I. Foreign Currency Conversion/Translation

Foreign Currency Transactions are accounted at the exchange rate prevailing on the date of the transactions. Foreign exchange monetary items outstanding as at the B/S date are reported using the closing rate, Gains & Losses resulting from the settlement of such transactions & translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit & Loss A/C.

In case of a foreign subsidiary, being a non integral operation the long term monetary items are restated at the exchange rate prevailing on the reporting date and the difference if any arising thereon is taken in for currency translation reserve and the short term monetary items are also restated at the exchange rate prevailing on the reporting date and the difference arising thereupon is recognized in Profit & Loss A/c.

J. Borrowing Costs

Borrowing cost attributable to construction periods is capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

K. Investments

Long term investments are carried at cost, less provision for diminution, if it is of permanent nature in value of such investments.

L. CENVAT Credit

The CENVAT Credit of excise duty if any availed on inputs and capital goods is accordingly reduced from the purchase cost of related inputs or capital goods as the case may be.

M. Accounting for Taxes on Income

Provision for tax if any, is based on the assessable profits computed in accordance with the provisions of Income Tax Act 1961 and the Accounting Standard 22 issued by the Institute of Chartered Accountants of India. In case the net result is positive i.e. deferred tax is assets then it is not recognized as a matter of prudence.

N. Cash Flow Statement

The company has prepared the Cash Flow Statement using the Indirect Method in compliance of Accounting Standard issued by The Institute Of Chartered Accountants of India (AS-3).

O. Segmental Reporting

The company is principally engaged in the business of textiles (mainly manufacturing of yarn of different kinds and trading of knitted cloth & acrylic top etc.) and the project of wind mill (for generation of electricity for re-sale.) The company is also operating in different geographical segments. The relevant information about these segments are given as part of Notes on Accounts.

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Mar 31, 2012

A. a) Accounting convention

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Going Concern Convention

The accounts of the company have been prepared on going concern basis.

c) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results materialize.

B. Revenue Recognition:

a) Sales:

Sales comprise sale of goods, services and export incentives net of excise duty, sales tax/VAT and trade discount. Revenue from sale of goods is recognized:

i) When all the Significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

b) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Export Benefits/Incentive:

Revenue in respect of the above benefit is recognized on post export basis.

d) Insurance and Other Claims:

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized.

C. Retirement/ Other Employee Benefits

(a) Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

(b) Provident Fund

Contribution to Provident Fund is made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 and charged to the Profit & Loss Account.

(c) Leave with wages

Provision for leave with wages is made on the basis of leave accrued to the workers during the financial year.

D. Fixed Assets

Fixed assets are stated at the values at which they are acquired, less accumulated depreciation and cenvat credit if availed. The cost of fixed assets included interest on borrowing attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Machinery spares whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of asset.

E. Intangible assets

Intangible assets are stated at cost less accumulated amount of amortization.

F. Capital Work in Progress

Projects under commissioning and other Capital Work in Progress are carried at Cost, comprising direct cost, related incidental expenses, indirect expenditure and attributable interest related to that project.

G. Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

H. Depreciation

Depreciation is provided in accordance with and in the manner and at the rates specified in schedule XIV to the Companies Act, 1956 as under:

a) on written down value basis for assets acquired prior to 06/03/2006 and

b) on straight line basis for assets acquired after that date.

I. Foreign Currency Conversion/Translation

Foreign Currency Transactions are accounted at the exchange rate prevailing on the date of the transactions. Foreign exchange monetary items outstanding as at the B/S date are reported using the closing rate, Gains & Losses resulting from the settlement of such transactions & translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit & Loss A/c.

In case of a foreign subsidiary, being a Non Integral operation the long term Monetary items are restated at the exchange rate prevailing on the reporting date and the difference if any arising thereon is taken in for currency translation reserve and the short term monetary items are also restated at the exchange rate prevailing on the reporting date and the difference arising thereupon is recognized in Profit & Loss A/c

J. Borrowing Costs

Borrowing cost attributable to construction periods is capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

K. Investments

Long term investments are carried at cost, less provision for diminution if it is of permanent nature in value of such investments.

L. CENVAT Credit

The CENVAT Credit of excise duty if any availed on inputs and capital goods is accordingly reduced from the purchase cost of related inputs or capital goods as the case may be.

M. Accounting for Taxes on Income

Provision for tax if any, is based on the assessable profits computed in accordance with the provisions of Income Tax Act 1961 and the Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

N. Cash Flow Statement

The company has prepared the Cash Flow Statement using the Indirect Method in compliance of Accounting Standard issued by The Institute Of Chartered Accountants of India (AS-3).

O. Segmental Reporting

The company is principally engaged in the business of textiles (mainly manufacturing of yarn of different kinds and trading of knitted cloth & acrylic top etc.) and the project of wind mill (for generation of electricity for re-sale.) The company is also operating in different geographical segments. The relevant information about these segments are given as part of Notes on Accounts.

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Mar 31, 2011

1. a) Accounting convention

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Going Concern Convention

The accounts of the company have been prepared on going concern basis.

c) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results materialise.

2. Revenue Recognition:

a) Sales:

Sales comprise sale of goods, services and export incentives net of excise duty, sales tax/VAT and trade discount. Revenue from sale of goods is recognized:

i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

b) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Export Benefits/Incentive:

Revenue in respect of the above Benefit is recognized on post export basis.

d) Insurance and Other Claims:

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized.

3. Retirement/ Other Employee Benefits

(a) Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

(b) Provident Fund

Contribution to Provident Fund is made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 and charged to the profit & Loss Account.

(c) Leave with wages

Provision for leave with wages is made on the basis of leave accrued to the workers during the financial year.

4. Fixed Assets

Fixed assets are stated at the values at which they are acquired, less accumulated depreciation and cenvat credit if availed. The cost of fi xed assets included interest on borrowing attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Machinery spares whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of asset.

5. Intangible assets

Intangible assets are stated at cost less accumulated amount of amortization.

6. Capital Work in Progress

Projects under commissioning and other Capital Work in Progress are carried at Cost, comprising direct cost, related incidental expenses, indirect expenditure and attributable interest related to that project.

7. Inventories

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of the various items of inventory is computed as under:

- In case of raw material at actual cost determined on FIFO basis plus direct expenses.

- In case of Stores and spares at weighted average cost.

- In case of Work in process at raw material cost plus appropriate proportion of direct labour and overheads.

- In case of fi nished goods at raw material cost plus conversion cost and appropriate proportion of overheads.

8. Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

9. Depreciation

Depreciation is provided in accordance with and in the manner and at the rates specifi ed in schedule XIV to the Companies Act, 1956 as under:

a) on written down value basis for assets acquired prior to 06/03/2006 and

b) on straight line basis for assets acquired after that date.

10. Foreign Currency Conversion/Translation

Purchase and Sales are accounted at exchange rate prevailing on the date of transaction. Monetary assets and liabilities in foreign currency as at Balance Sheet date are translated at rates prevailing at the year end and the resultant net gains or losses are recognized as income or expense in the year in which they arise except the net variation arising on account of such conversion in case of liabilities incurred for acquisition of fixed assets is adjusted to the cost of the respective fixed asset.

11. Borrowing Costs

Borrowing cost attributable to construction periods is capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Investments

Long term investments are carried at cost, less provision for diminution, in value of such investments. Current Investments are carried individually at lower of Cost and fair value.

13. CENVAT Credit

The CENVAT Credit of excise duty if any availed on inputs and capital goods is accordingly reduced from the purchase cost of related inputs or capital goods as the case may be.

14. Accounting for Taxes on Income

Provision for tax if any, is based on the assessable profits computed in accordance with the provisions of Income Tax Act 1961 and the Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

15. Cash Flow Statement

The company has prepared the Cash Flow Statement using the Indirect Method in compliance of Accounting Standard issued by The Institute Of Chartered Accountants of India (AS-3).

16. Segmental Reporting

The company is principally engaged in the business of textiles (mainly manufacturing of yarn of different kinds and trading of knitted cloth & acrylic top etc.) and the project of wind mill (for generation of electricity for re-sale.) The company is also operating in different geographical segments. The relevant information about these segments are given as part of Notes on Accounts.

17. Earning per share:

Basic earning per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

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Mar 31, 2010

1. a) Accounting convention

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Going Concern Convention

The accounts of the company have been prepared on going concern basis.

2. Revenue Recognition:

a) Sales:

Sales comprise sale of goods, services and export incentives net of excise duty, sales tax/VAT and trade discount. Revenue from sale of goods is recognized:

i) When all the Significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

b) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Export Benefits/Incentive:

Revenue in respect of the above benefit is recognized on post export basis.

d) Insurance and Other Claims:

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized.

3. Retirement/ Other Employee Benefits

(a) Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

(b) Provident Fund

Contribution to Provident Fund is made in accordance with the provisions of the Employee’s Provident Fund and Miscellaneous Provisions Act, 1952 and charged to the Profit & Loss Account.

(c) Leave with wages

Provision for leave with wages is made on the basis of leave accrued to the workers during the financial year.

4. Fixed Assets

Fixed assets are stated at the values at which they are acquired, less accumulated depreciation and cenvat credit if availed. The cost of fixed assets included interest on borrowing attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Machinery spares whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of asset.

5. Capital Work in Progress

Projects under commissioning and other Capital Work in Progress are carried at Cost, comprising direct cost, related incidental expenses, indirect expenditure and attributable interest related to that project.

6. Inventories

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of the various items of inventory is computed as under:

- In case of raw material at actual cost determined on FIFO basis plus direct expenses.

- In case of Stores and spares at weighted average cost.

- In case of Work in process at raw material cost plus appropriate proportion of direct labour and overheads.

- In case of finished goods at raw material cost plus conversion cost and appropriate proportion of overheads.

7. Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

8. Depreciation

Depreciation is provided in accordance with and in the manner and at the rates specified in schedule XIV to the Companies Act, 1956 as under:

a) on written down value basis for assets acquired prior to 06/03/2006 and

b) on straight line basis for assets acquired after that date.

9. Foreign Currency Conversion/Translation

Purchase and Sales are accounted at exchange rate prevailing on the date of transaction. Monetary assets and liabilities in foreign currency as at Balance Sheet date are translated at rates prevailing at the year end and the resultant net gains or losses are recognized as income or expense in the year in which they arise except the net variation arising on account of such conversion in case of liabilities incurred for acquisition of fixed assets is adjusted to the cost of the respective fixed asset.

10. Borrowing Costs

Borrowing cost attributable to construction periods is capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

11. Investments

Long term investments are carried at cost, less provision for diminution, in value of such investments. Current Investments are carried individually at lower of Cost and fair value.

12. CENVAT Credit

The CENVAT Credit of excise duty if any availed on inputs and capital goods is accordingly reduced from the purchase cost of related inputs or capital goods as the case may be.

13. Accounting for Taxes on Income

Provision for tax if any, is based on the assessable profits computed in accordance with the provisions of Income Tax Act 1961 and the Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

14. Cash Flow Statement

The company has prepared the Cash Flow Statement using the Indirect Method in compliance of Accounting Standard issued by The Institute Of Chartered Accountants of India (AS-3).

15. Segmental Reporting

The company is principally engaged in the business of textiles (mainly manufacturing of yarn of different kinds and trading of knitted cloth & acrylic top etc.) and the project of wind mill (for generation of electricity for re-sale.) The company is also operating in different geographical segments. The relevant information about these segments are given as part of Notes on Accounts.

16. Earning per share:

Basic earning per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.