Mar 31, 2015
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost
convention on accrual basis, in accordance with the generally accepted
accounting principles and materially comply with the Accounting
Standards notified by the Companies(Accounting Standards) Rules, 2006
and relevant provisions of Companies Act 2013.
2.2 USE OF ESTIMATES:
The presentation of financial statements is in conformity with the
generally accepted accounting principles and requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. The
difference between the actual results and estimates are recognised in
the period in which results are known/materialised.
2.3 REVENUE RECOGNITION:
Sales includes sale of waste yarn and excise duty but excludes
discount. Sales are accounted on despatch of goods to customers.
2.4 FIXED ASSETS:
Tangible Assets:
The tangible assets are stated at their original cost less accumulated
depreciation and impairment loss, if any. In the case of tangible
assets acquired for New project, interest cost on borrowings and other
related expenses incurred up to the date of completion of project or
commencement of commercial production are capitalised.
Projects under which assets are not ready for their intended use are
shown as Capital Work-in-Progress.
Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortisation/depletion and impairment loss, if
any. The cost comprises purchase price, borrowing costs, and any cost
directly attributable to bringing the asset to its working condition
for the intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the
intangible assets.
2.5 IMPAIRMENT OF ASSETS:
The carrying amount of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognised wherever the carrying amount
of an assets exceeds its recoverable amount. The recoverable amount is
greater than the assets net selling price and value in use. During the
year there is no impairment of the assets.
2.6 INVESTMENT:
Long Term Investments are stated at cost in accordance with the
Accounting Standard on "Accounting for Investments" (AS - 13) notified
by the Companies (Accounting Standards) Rules 2006.
2.7 INVENTORIES:
i) Raw Materials are valued at cost determined on First in First out
(FIFO) Method.
ii) Finished Goods are valued at cost or net realisable value whichever
is lower.
iii) Stores and Spares, Fuel & Packing Materials are valued at cost.
2.8 DEPRECIATION, AMORTISATION Tangible Assets:
Depreciation on Fixed Assets is provided using Straight Line Method on
basis of useful life as specified in Schedule II of the Companies Act,
2013.
Intangible Assets:
Computer Software is amortised over a period of 5 years as per AS 26
"Intengible Assets".
2.9 BORROWING COST:
Borrowing costs consists of interest and other cost that the company
incurs in connection with the borrowing of funds. Financing Cost
relating to borrowed funds attributable to constructions and
acquisition of fixed assets for the period upto the completion of
construction or acquisition of fixed assets are included in the cost of
the assets to which they relate.
2.10 EMPLOYEE BENEFITS:
Short term employee benefits:
All employee benefits falling due wholly within 12 months of rendering
the services are classified as short term employee benefits and are
recognised as an expenses in the period in which the employee renders
the related services.
Post - Employment benefits:
Defined Contribution Plan
The company's contribution towards the provident fund and the social
securities for certain eligible employees are considered to be defined
contribution plans as the company does not carry any further
obligations apart from the contributions made on a monthly basis.
Defined Benefit Plan
The company's liability for gratuity is determined using the Projected
Unit Credit Method with actuarial valuation carried out as at the
balance sheet date. Actuarial gains and losses are recognised
immediately in the statement of profit and loss.
The employees of the company are entitled to be compensated absences
and leave encashment as per the policy of the company, the liability in
respect of which is provided on an accrual basis.
2.11 TAXES ON INCOME:
Provision for taxation has been made in accordance with the applicable
income tax laws prevailing for the relevant assessment year.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
2.12 EXCISE DUTY:
The Company is following the method of accounting according to which
the excise duty is generally booked as a liability at the time of
removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn
and paid accordingly.
The Company has opted for optional excise duty of either to take cenvat
credit on input and payment of excise duty on removal of goods and
accordingly provision for excise duty on closing stock as on 31st
March, 2015 of Rs. 0.06 Lacs (Previous year Rs. NIL ) has been made for
the same.
2.13 CENVAT:
Cenvat Credit on excise duty paid on inputs and capital assets is
accounted for by reducing from the purchase cost of the related inputs
or the capital assets, as the case may be as per the option granted
under the Excise Act.
2.14 TRANSACTIONS IN FOREIGN CURRENCY:
Revenue transactions made in foreign currency are translated at the
applicable prevailing exchange rate. Payments / Receipts made in
foreign currency are translated at the applicable rate prevailing on
the date of remittance. Any exchange gain / loss arising on settlement
of such transactions are accounted for in the statement of profit and
loss. Outstanding balance is translated at the exchange rate
prevailing at the closing date. Any exchange gain or loss arising out
of such restatement is accounted for in the statement of profit and
loss.
Premiums or discounts arising at the inception of the forward foreign
exchange contracts, other than contracts to hedge a firm commitment or
a highly probable forecast transaction, are amortised and recognised in
the Statement of Profit and Loss over the period of the contract.
Exchange differences are recognised in the Statement of Profit and
Loss.
2.15 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
2.16 GOVERNMENT GRANTS, SUBSIDIES:
Government grants in the nature of TUF's Interest subsidy on the Rupee
Term Loan availed from the Banks under the Technology Upgradation Fund
Scheme @5% on the balance outstanding, is reduced from the finance cost
of the relevant Term Loan. In view of the uncertainty of the final
quantum of subsidy and its receipt the interest subsidy is being
accounted on receipt basis.
2.17 SEGMENT REPORTING:
As the Company's business activity falls within a single business
segment viz. 'Yarns' and the sales substantially being in the domestic
market, the financial statements are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified
under the Companies (Accounting Standards) Rules, 2006.
2.18 EARNINGS PER SHARE:
Basic earnings per share has been calculated by dividing the profit
after tax by the weighted average number of equity shares outstanding
during the year.
(iii) Aggregate number and class of shares allotted as fully paid up
pursuant to contract(s) without payment being received in cash, bonus
shares and shares bought back for the period of 5 years immediately
preceding the Balance Sheet date:
Bonus (1 : 1) Equity shares allotted on 9th December 2009
Term Loan - Security:
Term Loans other than for Silli - Unit
Secured by First charge on Pari Passu basis with IDBI and 2nd Pari
passu charge basis with BOI of Immovable properties situated at Vapi
unit. The loans are further secured by Hypothecation of Movable assets
of the company both present and future (save and except Book debts)
except for Silli - Unit and subject to prior charge on certain movable
assets created in favour of Bank of India for securing working capital
facilities and personal guarantee of two directors.
Term Loan for Silli - Unit
Secured by Exclusive charge in favour of BOI of Immovable properties
situated at Silli - Unit. The loan is further secured by Hypothecation
of Movable assets of the company both present and future (save and
except Book debts) of Silli - Unit and personal guarantee of two
directors.
Vehicle Loan - Security:
Secured by hypothecation of specific assets
Security:
a) Secured by First charge on Current Assets including Stocks and Book
debts and Personal Guarantee of two directors.
b) Secured by second charge on Pari Passu basis on all fixed Assets of
existing units of company in Vapi except Silli - Unit.
* Office Premises includes Rs. 250/- being the cost of five shares of
Rs. 50/- each of Mittal Industrial Premises.
** Software to be amortised over a period of Five years due to
applicability of AS - 26 on Intangible Assets.
# Based on the transitional provision provided in note 7(b) of schedule
II of Companies Act 2013 an amount of Rs. 36.72 Lacs (Net of Deferred
Tax)has been adjusted against the retained earnings where the useful
life of the assets has become NIL in terms of the said schedule.
Mar 31, 2014
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost
convention on accrual basis, in accordance with the generally accepted
accounting principles and materially comply with the Accounting
Standards notified by the Companies(Accounting Standards) Rules, 2006.
1.2 USE OF ESTIMATES:
The presentation of financial statements is in conformity with the
generally accepted accounting principles and requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. The
difference between the actual results and estimates are recognised in
the period in which results are known/materialised.
1.3 REVENUE RECOGNITION:
Sales includes sale of waste yarn and excise duty but exclude
discounts. Sales are accounted on despatch of goods to customers.
1.4 FIXED ASSETS:
Tangible Assets:
The tangible assets are stated at their original cost less accumulated
depreciation and impairment loss, if any. In the case of tangible
assets acquired for New project, interest cost on borrowings and other
related expenses incurred up to the date of completion of project or
commencement of commercial production are capitalised.
Projects under which assets are not ready for their intended use are
shown as Capital Work-in-Progress.
Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortisation/depletion and impairment loss, if
any. The cost comprises purchase price, borrowing costs and any cost
directly attributable to bringing the asset to its working condition
for the intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the
intangible assets.
1.5 IMPAIRMENT OF ASSETS:
The carrying amount of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognised wherever the carrying amount
of an assets exceeds its recoverable amount. The recoverable amount is
greater than the assets net selling price and value in use. During the
year there is no impairment of the assets.
1.6 INVESTMENT:
Long Term Investments are stated at cost in accordance with the
Accounting Standard on "Accounting for Investments (AS - 13)"
notified by the Companies (Accounting Standards) Rules 2006.
1.7 INVENTORIES
i) Raw Materials are valued at cost determined on First in First out
(FIFO) Method.
ii) Finished Goods are valued at cost or net realisable value whichever
is lower.
iii) Stores and Spares, Fuel & Packing Materials are valued at cost.
1.8 DEPRECIATION. AMORTISATION Tangible Assets:
Depreciation is provided on a Straight Line Method at the rates
prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis
with reference to the month of addition in respect of assets except for
Texturising machines on which depreciation has been provided as per the
useful life of the machines as estimated by the management which is
higher than the rate prescribed in Schedule XIV of the Companies Act,
1956.
Intangible Assets:
Computer Software is amortised over a period of 5 years.
1.9 BORROWING COST:
Borrowing costs consists of interest and other costs that the company
incurs in connection with the borrowing of funds.
Financing Cost relating to borrowed funds attributable to constructions
and acquisition of fixed assets for the period upto the completion of
construction or acquisition of fixed assets are included in the cost of
the assets to which they relate.
1.10 EMPLOYEE BENEFITS:
Short term employee benefits
All employee benefits falling due wholly within 12 months of rendering
the services are classified as short term employee benefits and are
recognised as an expenses in the period in which the employee renders
the related services.
Post - Employment benefits - Defined Contribution Plan
The company''s contribution towards the provident fund and the social
securities for certain eligible employees are considered to be defined
contribution plans as the company does not carry any further
obligations apart from the contributions made on a monthly basis.
Defined Benefit Plan
The company''s liability for gratuity is determined using the Projected
Unit Credit Method with actuarial valuation carried out as at the
balance sheet date. Actuarial gains and losses are recognised
immediately in the statement of profit and loss.
The employees of the company are entitled to be compensated absences
and leave encashment as per the policy of the company, the liability in
respect of which is provided on an accrual basis.
1.11 TAXES ON INCOME:
Provision for taxation has been made in accordance with the applicable
Income Tax laws prevailing for the relevant assessment year.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
1.12 EXCISE DUTY:
The Company is following the method of accounting according to which
the excise duty is generally booked as a liability at the time of
removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn
and paid accordingly.
The Company has opted for optional excise duty of either to take cenvat
credit on input and payment of excise duty on removal of goods and
accordingly provision for excise duty on closing stock as on 31st
March, 2014 of Rs. Nil (Previous year Rs. 0.46 Lacs) has been made for
the same.
1.13 CENVAT:
Cenvat Credit on excise duty paid on inputs and capital assets is
accounted for by reducing from the purchase cost of the related inputs
or the capital assets, as the case may be as per the option granted
under the Excise Act.
1.14 TRANSACTIONS IN FOREIGN CURRENCY:
Revenue transactions made in foreign currency are translated at the
applicable prevailing exchange rate. Payments / Receipts made in
foreign currency are translated at the applicable rate prevailing on
the date of remittance. Any exchange gain / loss arising on settlement
of such transactions are accounted for in the statement of profit and
loss. Outstanding balance is translated at the exchange rate prevailing
at the closing date. Any exchange gain or loss arising out of such
restatement is accounted for in the statement of profit and loss.
Premiums or discounts arising at the inception of the forward foreign
exchange contracts, other than contracts to hedge a firm commitment or
a highly probable forecast transaction, are amortised and recognised in
the Statement of Profit and Loss over the period of the contract. Such
forward foreign exchange contract outstanding as at the Balance Sheet
date are converted at the exchange rates prevailing on that date.
Exchange differences are recognised in the Statement of Profit and
Loss.
1.15 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
1.16 GOVERNMENT GRANTS, SUBSIDIES:
Government grants in the nature of TUF''s Interest subsidy on the Rupee
Term Loan availed from the Banks under the Technology Upgradation Fund
Scheme @5% on the balance outstanding, is reduced from the finance cost
of the relevant Term Loan. In view of the uncertainty of the final
quantum of subsidy and its receipt the interest subsidy is being
accounted on receipt basis.
1.17 SEGMENT REPORTING:
As the Company''s business activity falls within a single business
segment viz. ''Yarns'' and the sales substantially being in the domestic
market, the financial statements are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified
under the Companies (Accounting Standards) Rules, 2006.
1.18 EARNINGS PER SHARE:
Basic earnings per share has been calculated by dividing the profit
after tax by the weighted average number of equity shares outstanding
during the year.
Term Loan - Security: Term Loans other than for Silli - Unit
(Secured by First charge on Pari Passu basis between BOI & IDBI on
Immovable properties situated at various manufacturing locations except
for Silli - Unit. The loans are further secured by Hypothecation of
Movable assets of the company both present and future (save and except
Book debts) except for Silli - Unit and subject to prior charge on
certain movable assets created in favour of Bank of India for securing
working capital facilities and personal guarantee of two directors.)
Term Loan for Silli - Unit
(Secured by First charge in favour of BOI on Immovable properties
situated at Silli - Unit. The loan is further secured by Hypothecation
of Movable assets of the company both present and future (save and
except Book debts) of Silli - Unit and personal guarantee of two
directors.)
Vehicle Loan - Security: (Secured by hypothecation of specific assets)
Security Working Capital Facility
a) Secured by First charge on Current Assets including Stocks and Book
debts and Personal Guarantee of two directors.
b) Secured by second charge on Pari Passu basis on all fixed Assets of
existing units of company in Silvassa and Vapi except Silli - Unit.
* Office Premises includes Rs. 250/- being the cost of five shares of
Rs. 50/- each of Udit Mittal Industrial Premises. ** Software to be
amortised over a period of Five years due to applicability of AS - 26
on Intangible Assets issued by Institute of Chartered Accountants of
India.
Mar 31, 2013
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost
convention on accrual basis, in accordance with the generally accepted
accounting principles and materially comply with the Accounting
Standards notified by the Companies(Accounting Standards) Rules, 2006.
1.2 USE OF ESTIMATES:
The presentation of financial statements is in conformity with the
generally accepted accounting principles and requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. The
difference between the actual results and estimates are recognised in
the period in which results are known/materialised.
1.3 REVENUE RECOGNITION:
Sales includes sale of waste yam and excise duty but exclude discounts.
Sales are accounted on despatch of goods to customers.
1.4 FIXED ASSETS:
The Fixed Assets are stated at their original cost less accumulated
depreciation. In the case of Fixed Assets acquired for New project,
interest cost on borrowings and other related expenses incurred up to
the date of completion of project or commencement of commercial
production are capitalised.
1.5 INVENTORIES:
i) Raw Materials are valued at cost determined on First in First out
(FIFO) Method. ii) Finished Goods are valued at cost or net realisable
value whichever is lower. iii) Stores and Spares, Fuel & Packing
Materials are valued at cost.
1.6 DEPRECIATION:
Depreciation is provided on a Straight Line Method at the rates
prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis
with reference to the month of addition in respect of assets.
The company is providing incremental depreciation on Texturising
machines due to shortening of its useful life on account of
technological changes.
1.7 BORROWING COST:
The borrowing cost has been treated in accordance with the Accounting
Standard on Borrowing Cost (AS - 16) issued by ICAI.
1.8 RETIREMENT BENEFITS:
Liability for gratuity is determined on the basis of actuarial
valuation as at the end of accounting year. Leave encashment is
determined on accrual basis and the liability for the unutilised leave
is provided for as at the end of the accounting year.
1.9 TAXES ON INCOME:*
Provision for taxation has been made in accordance with the applicable
income tax laws prevailing for the relevant assessment year.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
1.10 EXCISE DUTY:
The Company is following the method of accounting according to which
the excise duty is generally booked as a liability at the time of
removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed
Yarn and paid accordingly.
The Company has opted for optional excise duty of either to take cenvat
credit on input and payment of excise duty on removal of goods and
accordingly provision for excise duty on closing stock as on 31st
March, 2013 Rs. 0.46 Lacs (Previous year Rs. 0.39 Lacs) has been made
for the same.
1.11 CENVAT:
Cenvat Credit on excise duty paid on inputs and capital assets is
accounted for by reducing from the purchase cost of the related inputs
or the capital assets, as the case may be as per the option granted
under the Excise Act.
1.12 TRANSACTIONS IN FOREIGN CURRENCY:
Revenue transactions made in foreign currency are translated at the
applicable prevailing exchange rate. Payments / Recipts made in foreign
currency are translated at the applicable rate prevailing on the date
of remittance. Outstanding balance is translated at the exchange rate
prevailing at the closing date. Any exchange gain or losses arising out
of the subsequent fluctuation are accounted for in the profit & loss
account.
Premiums or discounts arising at the inception of the forward foreign
exchange contracts, other than contracts to hedge a firm commitment or
a highly probable forecast transaction, are amortised and recognised in
the Statement of Profit and Loss over the period of the contract. Such
forward foreign exchange contract outstanding as at the Balance Sheet
date are converted at the exchange rates revailing on that date.
Exchange differences are recognised in the Statement of Profit and
Loss.
1.13 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are dis closed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
1.14 IMPAIRMENT OF ASSETS:
The Company have assessed that on the Balance Sheet date there are no
assets which requires provision for impairment.
1.15 INVESTMENT:
Long Term Investments are stated at cost in accordance with the
Accounting Standard on " Accounting for investments (AS - 13) notified
by the Companies (Accounting Standards) Rules 2006.
1.16 GOVERNMENT GRANTS, SUBSIDIES:
Government grants in the nature of TUF''s Interest subsidy on the Rupee
Term Loan availed from the Banks under the Technology Upgradation Fund
Scheme @5% on the balance outstanding, is reduced from the finance cost
of the relevant Term Loan.
1.17 EMPLOYEE BENEFITS:
i. Provident Fund:
Eligible employees of the Company receive benefits under the Provident
Fund which is a defined contribution plan wherein both the employee,
and the Company make monthly contributions equal to specified
percentage of the covered employees'' salary. These contributions are
made to the Funds administered and managed by the Govt, of India. The
Company''s monthly contributions are charged to revenue in the period
they are incurred.
ii. Gratuity:
In accordance with the payment of ''Gratuity Act, 1972'' of India, the
Company provided for gratuity, a defined retirement benefit plan (the
Gratuity Plan'') covering eligible employees. Liabilities with regards
to such Gratuity Plan are determined by actuarial valuation and are
charged to revenue in the period determined.
"The actual assumptions is arriving at the provision of gratuity
liabilities which are as follows:
a) Mortality Rate LIC (1994-96)
b) Discounting Rate 8.25%
c) Salary Escalation 6.0%
d) Retirement Age 60
iii. Provision for Unutilized Leave
The accrual for unutilised leave is determined for the entire available
leave balance standing to the credit of the employees at period-end and
charged to revenue in the period determined.
1.18 SEGMENT REPORTING:
As the Company''s business activity falls within a single business
segment viz. ''Yarns'' and the sales substantially being in the domestic
market, the financial statements are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified under
the Companies (Accounting Standards) Rules, 2006.
1.19 EARNINGS PER SHARE:
Basic earnings per share has been calculated by dividing the profit
after tax by the weighted average number of equity shares outstanding
during the year.
Mar 31, 2012
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost
convention on accrual basis, in accordance with the generally accepted
accounting principles and materially comply with the Accounting
Standards notified by the Companies(Accounting Standards) Rules, 2006.
1.2 USE OF ESTIMATES:
The presentation of financial statements is in conformity with the
generally accepted accounting principles and requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on 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 recognised in the period
in which results are known materialised.
1.3 REVENUE RECOGNITION:
Sales includes sale of waste yam and excise duty but exclude discounts.
Sales are accounted on despatch of goods to customers.
1.4 FIXED ASSETS:
The Fixed Assets are stated at their original cost less accumulated
depreciation. In the case of Fixed Assets acquired for New project,
interest cost on borrowings and other related expenses incurred up to
the date of completion of project or commencement of commercial
production are capitalised.
1.5 INVENTORIES:
i) Raw Materials are valued at cost determined on First in First out
(FIFO) Method.
ii) Finished Goods are valued at cost or net realisable value whichever
is lower.
iii) Stores and Spares, Fuel & Packing Materials are valued at cost.
1.6 DEPRECIATION:
Depreciation is provided on a Straight Line Method at the rates
prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis
with reference to the month of addition in respect of assets.
The company is providing incremental depreciation on Texturising
machines due to shortening of its useful life on account of
technological changes.
The borrowing cost has been treated in accordance with the Accounting
Standard on Borrowing Cost (AS - 16) issued by ICAI. During the year,
there were no borrowings attributable to qualifying assets and hence,
no borrowing cost has been capitalized.
1.7 RETIREMENT BENEFITS:
Liability for gratuity is determined on the basis of actuarial
valuation as at the end of accounting year. Leave encashment is
determined on accrual basis and the liability for the unutilised leave
is provided for as at the end of the accounting year.
1.8 TAXES ON INCOME:
Provision for taxation has been made in accordance with the applicable
income tax laws prevailing for the relevant assessment year.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
1.9 EXCISE DUTY:
The Company is following the method of accounting according to which
the excise duty is generally booked as a liability at the time of
removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn
and paid accordingly.
The Company has opted for optional excise duty of either to take cenvat
credit on input and payment of excise duty on removal of goods and
accordingly provision for excise duty on closing stock as on 31st
March,2012 Rs. 0.39 Lacs (Previous year Rs.Nil) has been made for the
same.
1.10 CENVAT;
Cenvat Credit on excise duty paid on inputs and capital assets is
accounted for by reducing from the purchase cost of the related inputs
or the capital assets, as the case may be as per the option granted
under the Excise Act.
1.11 TRANSACTIONS IN FOREIGN CURRENCY:
Revenue transactions made in foreign currency are translated at the
applicable prevailing exchange rate. Gain/Loss arising out of
fluctuation in exchange rate is accounted for on realisation.
Payments made in foreign currency are translated at the applicable rate
prevailing on the date of remittance. Outstanding liability is
translated at the exchange rate prevailing at the closing date.
Any exchange gain or losses arising out of the subsequent fluctuation
are accounted for in the profit & loss account
1.12 PROVISIONS. CONTINGENT LIABILITY AND CONTINGENT ASSET:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements
1.13 IMPAIRMENT OF ASSETS:
The Company have assessed that on the Balance Sheet date there are no
assets which requires provision for impairment.
1.14 INVESTMENT:
Long Term Investments are stated at cost in accordance with the
Accounting Standard on " Accounting for Investments (AS - 13) issued
by ICAI.
1.15 GOVERNMENT GRANTS. SUBSIDIES:
Government grants in the nature of TUF's Interest subsidy on the
Rupee Term Loan availed from the Banks under the Technology Upgradation
Fund Scheme @5% on the balance outstanding, which is reduced from the
finance cost of the relevant Term Loan.
1.16 EMPLOYEE BENEFITS:
i. Provident Fund:
Eligible employees of the Company receive benefits under the Provident
Fund which is a defined contribution plan wherein both the employee,
and the Company make monthly contributions equal to specified
percentage of the covered employees' salary. These contributions are
made to the Funds administered and managed by the Govt, of India. The
Company's monthly contributions are charged to revenue in the period
they are incurred.
ii. Gratuity:
In accordance with the payment of 'Gratuity Act, 1972' of India, the
Company provided for gratuity, a defined retirement benefit plan (the
Gratuity Plan') covering eligible employees. Liabilities with regards
to such Gratuity Plan are determined by actuarial valuation and are
charged to revenue in the period determined.
The actual assumptions is arriving at the provision of gratuity
liabilities which are as follows:
a) Mortality Rate LIC (1994-96)
b) Discounting Rate 8.5%
c) Salary Escalation 6.0%
d) Retirement Age 60
iii. Provision for Unutilized Leave
The accrual for unutilised leave is determined for the entire available
leave balance standing to the credit of the employees at period-end and
charged to revenue in the period determined.
1.17 SEGMENT REPORTING:
As the Company's business activities falls within a single primary
business segment viz. Dyed and Texturised Yam, the Disclosure
requirement of Accounting Standard (AS-17) 'Segment Reporting'
issued by the Institute of Chartered Accountants of India are not
applicable.
1.18 EARNINGS PER SHARE:
Basic earnings per share has been calculated by dividing the profit
after tax by the weighted average number of equity shares outstanding
during the year.
Mar 31, 2010
(i) BASIS OF PREPARATION OF FINANCIAL STATEMENTS :
The financial statements have been prepared under the historical cost
convention on accrual basis, in accordance with the generally accepted
accounting principles and materially comply with the Accounting
Standards notified by the Companies(Accounting Standarda) Rules, 2006.
(ii) USE OF ESTIMATES :
The presentation of financial statements is in conformity with the
generally accepted accounting principles and requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognised in the period in
which results are known/materialised.
(iii) REVENUE RECOGNITION:
Sales include sale of waste yarn and excise duty but excludes
discounts. Sales are accounted on despatch of goods to customer.
(iv) FIXED ASSETS:
The Fixed Assets are stated at their original cost less accumulated
depreciation. In the case of Fixed Assets acquired for New project
interest cost on borrowings and other related expenses incurred up to
the date of completion of project or commencement of commercial
production are capitalised.
(v) INVENTORIES :
i) Raw Materials are valued at cost determined on First in First out
(FIFO) Method. ii) Finished Goods are valued at cost or net realisable
value whichever is lower. iii) Stores and Spares, Fuel & Packing
Materials are valued at cost.
(vi) DEPRECIATION :
Depreciation is provided on a Straight Line Method at the rates
prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis
with reference to the month of addition in respect of asset.
During the year the company has provided incremental depreciation on
Texturising machines due to shortening of its useful life on account of
technological changes.
(vii) BORROWING COST :
The borrowing cost has been treated in accordance with the Accounting
Standard on Borrowing Cost (AS - 16) issued by ICAI. During the year,
there were no borrowings attributable to qualifying assets and hence,
no borrowing cost has been capitalized.
(viii) RETIREMENT BENEFITS :
Liability for gratuity is determined on the basis of actuarial
valuation as at the end of accounting year. Leave encashment is
determined on accrual basis and the liability for the unutilised leave
is provided for as at the end of the accounting year.
(ix) TAXATION :
Provision for taxation has been made in accordance with the applicable
income tax laws prevailing for the relevant assessment year.
Deferred Tax is recognised, subject to the consideration of prudence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
(x) EXCISE DUTY :
The Excise Duty on manufactured goods i.e. Texturised, Twisted Yarn &
Dyed Yarn was accounted on removable of goods for Sale or Job Work as
applicable and paid accordingly
The Company has opted for optional excise duty of either to take cenvat
credit on input and payment of excise duty on removal of goods or not
to take cenvat credit and removal of goods without payment of duty.
(xi) CENVAT :
Cenvat Credit on excise duty paid on inputs and capital assets is
accounted for by reducing from the purchase cost of the related inputs
or the capital assets, as the case may be as per the option granted
under the Excise Act.
(xii) TRANSACTIONS IN FOREIGN CURRENCY :
Revenue transactions made in foreign currency are translated at the
applicable prevailing exchange rate. Gain/Loss arising out of
fluctuation in exchange rate is accounted for on realisation.
Payments made in foreign currency are translated at the applicable rate
prevailing on the date of remittance.
Outstanding liability is translated at the exchange rate prevailing at
the closing date.
Any exchange gain or losses arising out of the subsequent fluctuation
are accounted for in the profit & loss account
(xiii) PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
(xiv) IMPAIRMENT OF ASSETS :
The Company have assessed that on the Balance Sheet date there are no
assets which requires provision for impairment.
(xiv) INVESTMENT :
Long Term Investments are started at cost in accordance with the
Accounting Standard on ÃAccounting for Investments (AS-13) issued by
ICAI.