Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
1.1. Corporate Information
Vijay Textiles Limited (âthe Companyâ) is a public domiciled in India and incorporated under the Companies Act, 1956.
Its shares are listed on Bombay Stock Exchange Limited in India. The Company is engaged in the manufacturing of Tex¬
tiles.
1.2. Basis of Preparation and Presentation
The financial statements of the Company have been prepared in accordance with Indian Accounting standards (Ind
AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies Accounting Standard
(Amendment Rules 2016).
1.3. PREPARATION OF FINANCIAL STATEMENTS
a) Basis of Accounting
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind
AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
Historical cost is generally based on fair value of the consideration given in exchange for goods and services
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure
purposes in these financial statements is determined on such basis, except for measurements that have some
similarities to fair value but are not fair value, such as net realizable value in Ind AS 2.
b) Significant accounting judgments, estimates and assumptions
The preparation of the Company''s financial statements in conformity with Ind AS requires management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
The management believes that the estimates used in preparation of financial statements is prudent and reasonable.
Estimates and underlying assumptions are reviewed at each reporting date. Revisions to accounting estimates are
recognized in the period in which the estimate is revised, and future period is affected.
c) Current/ Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An
asset is treated as current when it is:
i. Expected to be realized or intended to be sold or consumed in normal operating cycle
ii. Held primarily for the purpose of trading
iii. Expected to be realized within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is current when:
i. It is expected to be settled in normal operating cycle
ii. It is held primarily for the purpose of trading
iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
Property, plant, and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses,
if any. The cost comprises purchase price, nonrefundable taxes, and directly attributable cost of bringing the asset to
its present location and condition for the intended use. Any trade discounts and rebates are deducted in arriving at the
purchase price.
Capital work in progress includes cost of property, plant and equipment under installation /under development as at the
balance sheet date. Property, plant and equipment are eliminated from financial statements, either on disposal or when
retired from active use. Losses arising in the case of retirement of property, plant and equipment and Gains or losses
arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of
occurrence. The asset residual values, useful lives and methods of depreciation are reviewed at each financial year end
and adjusted prospectively, if appropriate.
Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as âCapital
Advanceâ under Other Non-Current Assets.
Depreciation on the property, plant and equipment is provided over the useful life of asset as specified in schedule II to
the Companies Act 2013. Property, plant and equipment which are added/ disposed off during the year, depreciation
is provided on pro rata basis with reference to the month of addition/deletion. In case of the following category of
property, plant and equipment, the depreciation has been provide based on the technical evaluation of the remaining
useful life which is different from the one specified in schedule II to the Companies Act 2013.Any Capital Expenditure
costing Rs. 5,000/- or less are treated as a Revenue Expenditure and recognized in the statement of profit and loss in
the year in which it is incurred.
Depreciation on assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to
the Companies Act, 2013.
Leasehold improvements are amortized over the duration of the lease.
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets
will flow to the Group and the cost of the assets can be measured reliably.
Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss, if any.
Intangible assets including software is amortized over their estimated useful life on straight line basis from the date they
are available for intended use, subject to impairment test.
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial
year and the amortization period is revised to reflect the changed pattern, if any.
Subsequent costs incurred for replacement of a major component of an asset should be included in the asset''s carrying
cost or recognized as a separate asset, as appropriate. The carrying value of the replaced component should be
recognized to statement of Profit and Loss when replaced.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in the income statement when the asset is derecognized.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value
of the consideration received or receivable, taking into account contractually defined terms of payment and excluding
taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its
revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also
exposed to inventory and credit risks.
Interest Income from financial asset is recognized when it is probable that the economic benefits flow to the
Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the asset''s net carrying
amount on initial recognition.
Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.
As per Ind AS-116, the Company has recognized lease liabilities and corresponding equivalent right-of-use assets. The
Company''s lease asset classes primarily consist of leases for Land, Buildings, Plant & Machinery and Vehicles. The
Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset.
(ii) The Company has substantially all the economic benefits from use of the asset through the period of the lease and
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less
(short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease
payments as an operating expense.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such
cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.
(a) Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the
lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statements of
Profit and Loss on accrual basis.
(b) Assets created on the leasehold property are depreciated over the period of the lease.
(a) Raw Materials, work in progress, finished goods, packing materials, stores, spares, consumables, and stock-in¬
trade are carried at the lower of cost and net realizable value.
(b) In determining cost of raw materials, packing materials, stock-in-trade, stores, spares and consumables, First-
In-First-Out method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those
subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their
present location and condition.
(c) Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate
share of fixed and variable production overheads and other costs incurred in bringing the inventories to their
present location and condition.
(d) Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of
completion and the estimated costs necessary to make the sale.
Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the
provident fund are charged to the statement of profit and loss for the year when the contributions are due.
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the
Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included
in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net
interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding
debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not
reclassified to profit or loss in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of:
(i) The date of the plan amendment or curtailment, and
(ii) The date that the Company recognizes related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company
recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and
loss:
(i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non¬
routine Settlements; and
(ii) Net interest expense or income.
Foreign currency transactions are recorded using the exchange rates prevailing on the date''s respective
transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized
in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by
forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized
in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the
transaction.
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost, if any.
Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets
are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as
expenses in the year in which they are incurred.
Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary
items, if any) by the weighted average number of Equity Shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes)
relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit
per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the
beginning of the period unless they have been issued at a later date. The dilutive potential equity shares are adjusted for
the proceeds receivable had the shares been actually issued at fair value (i.e., average market value of the outstanding
shares). Dilutive potential equity shares are determined independently for each period presented. The number of
equity shares and potentially dilutive equity shares are adjusted for share splits/reverse share splits and bonus shares, as
appropriate. to equity shareholders and the weighted average number of shares outstanding during the year are adjusted
for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as
of the beginning of the year, unless they have been issued at a later date.
Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax
Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income
and taxable income for the period).
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other
comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either
in Other Comprehensive Income (OCI) or directly in equity. Management periodically evaluates positions taken in the
tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
(i) When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilized, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction
either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any
indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the
carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in
earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the
Statement of Profit and Loss, except in case of revalued assets.
Mar 31, 2018
1.1. Corporate Information
Vijay Textiles Limited (âthe Companyâ) is a public domiciled in India and incorporated under the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited in India. The Company is engaged in the manufacturing of Textiles.
1.2. Statement of Compliance
The financial statements of the Company have been prepared in accordance with Indian Accounting standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies Accounting Standard (Amendment Rules 2016).
The financial statements are the Companyâs first IND AS and covered by IND AS 101 first time adoption of Indian Accounting Standards for the financial year 2017-18. For all periods up to and including the year ended Ist April 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the Section 1 33 of the Companies Act 2013, read together with the Companies (Accounts) Rules, 2014 (Indian GAAP).
An explanation of how the transition to Ind AS has affected the Companyâs equity and its net profit is provided in Note 2.16
1.3. Preparation of Financial Statements
a) Basis of Accounting
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
Historical cost is generally based on fair value of the consideration given in exchange for goods and services
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2.
b) Significant accounting judgments, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The management believes that the estimates used in preparation of financial statements is prudent and reasonable.
c) Current/ Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on current/ noncurrent classification. An asset is treated as current when it is:
i. Expected to be realized or intended to be sold or consumed in normal operating cycle
ii. Held primarily for the purpose of trading
iii. Expected to be realized within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as noncurrent.
A liability is current when:
i. It is expected to be settled in normal operating cycle
ii. It is held primarily for the purpose of trading
iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
1.4. PROPERTY , PLANT AND EQUIPMENT
Property, plant and equipment are stated at original cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. When significant parts of Property, plant and equipment are required to be replaced at intervals, the Company derecognizes the replaced part, and recognizes the new part with its own associated useful life and it is depreciated accordingly. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the statement of profit and loss as incurred. The present value of expected cost for decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Capital work in progress includes cost of property, plant and equipment under installation /under development as at the balance sheet date. Property, plant and equipment are eliminated from financial statements, either on disposal or when retired from active use. Losses arising in the case of retirement of property, plant and equipment and Gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence. The asset residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as âCapital Advanceâ under Other Non-Current Assets.
Depreciation on the property, plant and equipment is provided over the useful life of asset as specified in schedule II to the Companies Act 2013. Property, plant and equipment which are added/ disposed off during the year, depreciation is provided on pro rata basis with reference to the month of addition/ deletion. In case of the following category of property, plant and equipment, the depreciation has been provide based on the technical evaluation of the remaining useful life which is different from the one specified in schedule II to the Companies Act 20I3.Any Capital Expenditure costing Rs.5,000 or less are treated as a Revenue Expenditure and recognized in the statement of profit and loss in the year in which it is incurred.
Depreciation on assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 20I3.
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the Group and the cost of the assets can be measured reliably.
Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss, if any.
Intangible assets including software is amortized over their estimated useful life on straight line basis from the date they are available for intended use, subject to impairment test.
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.
Subsequent cost
Subsequent costs incurred for replacement of a major component of an asset should be included in the assetâs carrying cost or recognized as a separate asset, as appropriate. The carrying value of the replaced component should be recognized to statement of Profit and Loss when replaced.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Gains or losses arising from de-recognition of an intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the assets is de-recognized.
1.5. REVENUE RECOGINITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The
Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
a) Interest income
Interest Income from financial asset is recognized when it is probable that the economic benefits flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the assetâs net carrying amount on initial recognition.
b) Other income
Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.
1.6. LEASES
(a) Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statements of Profit and Loss on accrual basis.
(b) Assets created on the leasehold property are depreciated over the period of the lease.
1.7. INVENTORIES
(a) Raw Materials, work in progress, finished goods, packing materials, stores, spares, components, consumables and stock-in-trade are carried at the lower of cost and net realizable value.
(b) In determining cost of raw materials, packing materials, stock-in-trade, stores, spares, components and consumables,
First-In-First-Out method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(c) Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.
(d) Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.
1.8. RETIREMENT BENEFITS TO EMPLOYEE
(a) Defined Contribution Plan:
A defined contribution plan is a postemployment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Companyâs contribution is recognized as an expense in the Statement of Profit and Loss Statement during the period in which the employee renders the related service.
(b) Defined Benefit Plan:
The liability in respect of defined benefit plans and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.
Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Statement of Profit and Loss.
Measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of:
(i) The date of the plan amendment or curtailment, and
(ii) The date that the Company recognizes related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
(i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine Settlements; and
(ii) Net interest expense or income
1.9. FOREIGN CURRENCY TRANSACTIONS AND BALANCES
(a) Initial Recognition
Foreign currency transactions are recorded using the exchange rates prevailing on the dateâs respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.
(b) Measurement of foreign currency items at the Balance Sheet date
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.
1.10.BORROWING COSTS
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost, if any.
Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.
1.11.EARNINGS PER SHARE
The basic earnings per share (âEPSâ) is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date.
1.12.TAXATION
Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, I96I) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(a) Current Tax :
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in Other Comprehensive Income (OCI) or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(b) Deferred Tax:
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
(i) When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
(ii) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:
(i) When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
(ii) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
1.13.IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assetâs net selling price and value in use. In assessing value in use, estimated future cash flows are discounted to their present value.
1.14.SEGMENT REPORTING
Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered business segments as the primary segments for disclosure.
The Company does not have any geographical segment.
1. 15.PROVISIONS AND CONTINGENCIES
The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
A disclosure for a 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.
When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.
1.16.FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(i) Debt instruments at amortized cost.
(ii) Debt instruments at fair value through other comprehensive income (FVTOCI).
(iii) Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL).
(iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI).
Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
Equity investments
All equity investments in scope of Ind AS I09 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquier in a business combination to which Ind ASI03 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by- instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily de-recognized (i.e. removed from the Groupâs consolidated balance sheet) when:
(i) The rights to receive cash flows from the asset have expired, or
(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement '' and either
(a) The Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are de-recognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
De-recognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS.
Mar 31, 2016
1.1. BASIS OF PREPATATION OF FINANCIAL STATEMENTS
(a) Basis of Accounting
The financial statements of Vijay Textiles Limited (VTL) or Company have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (''Indian GAAP'') and comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014.
(b) Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent 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 recognized in the period in which the results are known/materialized.
(c) Current/ Non Current Classification
All assets and liabilities have been classified as current or noncurrent as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
1.2. TANGIBLE AND INTANGIBLE ASSETS
Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies (other than refundable) and any directly attributable cost of bringing the assets to their working condition for intended use.
Pursuant to the requirements under Schedule II to the Companies Act, 2013, the Company has identified and determined the cost of each component of an asset separately when the component has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.
Capital Work in Progress & Capital Advances
Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as Long Term Loans & Advances.
1.3. DEPRECIATION
Depreciation on fixed assets is provided using straight line method based on the useful lives as prescribed under Schedule II to the Companies Act, 2013 and is charged to the Statement of Profit and Loss. Depreciation for assets purchased/sold during a period is proportionately charged.
Significant components of assets identified separately pursuant to the requirements under Schedule II of the Companies Act, 2013 are depreciated separately over their useful life.
All assets costing individually Rs. 5,000 and below are depreciated fully in the year of purchase.
1.4. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on systematic basis to the costs, which it is intended to compensate. Where grant or subsidy relates to an asset, its value is deducted from the gross value of the asset in arriving at the carrying amount of the related asset.
1.5. REVENUE RECOGNITION
Revenue recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of goods and the same is recognized on transfer of significant risk and rewards.
Interest income is recognized on the time proportion basis.
1.6. LEASES
(a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.
(b) Assets created on the leasehold property are depreciated over the period of the lease.
1.7. INVENTORIES
(a) Raw Materials, work in progress, finished goods, packing materials, stores, spares, components, consumables and stock-in-trade are carried at the lower of cost and net realizable value.
(b) In determining cost of raw materials, packing materials, stock-in-trade, stores, spares, components and consumables, First-In-First-Out method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(c) Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.
1.8. RETIREMENT BENEFITS TO EMPLOYEE
(a) Defined Contribution Plan:
A defined contribution plan is a postemployment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss Statement during the period in which the employee renders the related service.
(b) Defined Benefit Plan:
The liability in respect of defined benefit plans and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Actuarial gains and losses in respect of postemployment and other long term benefits are charged to the Statement of Profit and Loss.
1.9. FOREIGN CURRENCY TRANSACTIONS AND BALANCES
(a) Initial Recognition
Foreign currency transactions are recorded using the exchange rates prevailing on the date''s respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.
(b) Measurement of foreign currency items at the Balance Sheet date
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.
1.10. BORROWING COSTS
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.
1.11. EARNINGS PER SHARE
The basic earnings per share (''EPS'') is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earning''s per share, the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date
1.12. TAXATION
Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, l96l) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(a) Current Tax :
The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, l96l.
(b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.
1.13. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, estimated future cash flows are discounted to their present value.
1.14. SEGMENT REPORTING
Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered business segments as the primary segments for disclosure.
The Company does not have any geographical segment.
1.15. PROVISIONS AND CONTINGENCIES
The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a 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. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2015
1. BASIS OF ACCOUNTING
The financial statements of Vijay Textiles Limited (VTL) or Company
have been prepared with Generally Accepted Accounting Principles (GAAP)
in India under the historical cost convention on the basis of a going
concern with revenues recognized and expenses accounted on their
accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation. All
expenditure of capital nature is capitalized. Such expenditure
comprises of purchase price, import duties, levies (other than
refundable) and any directly attributable cost of bringing the assets
to their working condition for intended use. All assets costing
individually Rs. 5,000/- and below are depreciated fully in the year of
purchase.
3. DEPRECIATION
Depreciation is provided under straight line method on the basis of
life of the assets as prescribed under Schedule II to the Companies
Act, 2013.
4. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied with. Grants and subsidies
received during the year related to specific fixed assets are shown as
deduction from the gross value of the asset concerned.
5. REVENUE RECOGINITION
Revenue recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operation
includes sale of goods and the same is recognised on transfer of
significant risk and rewards.
6. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
7. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value whichever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower. Net realizable value is the estimated selling value in the
ordinary course of business less estimated cost of completion and
estimated cost necessary to make sale and cost comprises cost of
material purchased and expenditure incurred in the normal course of
business in bringing such inventories to its location and includes,
where applicable, appropriate overheads based on normal level of
activity.
8. RETIREMENT BENEFITS
a) Defined Contribution Plan:
Contribution as per the Employee's Provident Fund and Miscellaneous
Provisions Act,1952 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan:
Gratuity: In accordance with applicable Indian laws, the Company
provides gratuity, a defined benefit retirement plan (Gratuity Plan)
covering all employees. The gratuity Plan provides a lump sum payment
to vested employees, at retirement or termination of employment, an
amount based on the respective employee's last drawn salary and the
years of employment with the Company. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the balance Sheet date.
Liability for Leave Encashment is treated as a Short-term liability and
is accounted for as per the rules of the Company in force.
9. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions take
place. The Company recognizes gains/losses on foreign exchange rate
fluctuations relating to current assets and current liabilities at the
end of the year.
10. BORROWING COSTS
Borrowing costs, which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the costs of such
assets. Other Borrowing costs are recognized as expenses in the year in
which they are incurred.
11. TAXATION
a) Current year Charge:
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act, 1961.
b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
12. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the asset's net selling price and
value in use. In assessing value in use, estimated future cash flows
are discounted to their present value.
13. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:
Contingent liabilities arising from claims, litigation, assessment,
etc., are provided for when it is probable that a liability may be
incurred and the amount can be reliably estimated.
Mar 31, 2014
1. BASIS OF ACCOUNTING
The financial statements of Vijay Textiles Limited (VTL or Company)
have been prepared with Generally Accepted Accounting Principles (GAAP)
in India under the historical cost convention on the basis of a going
concern with revenues recognized and expenses accounted on their
accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost,less accumulated depreciation. All
expenditure of capital nature is capitalized. Such expenditure
comprises of purchase price, import duties, levies and any directly
attributable cost of bringing the assets to their working condition for
intended use. All assets costing individually Rs. 5,000/- and below are
depreciated fully in the year of purchase.
3. DEPRECIATION
Depreciation is provided under the Straight Line Method at rates
prescribed under Schedule XIV to the Companies Act, 1956.
4. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied with. Grants and subsidies
received during the year related to specific fixed assets are shown as
deduction from the gross value of the asset concerned.
5. REVENUE RECOGINITION
Revenue recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operation
includes sale of goods and the same is recognised on transfer of
significant risk and rewards.
6. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
7. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value whichever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower. Net realizable value is the estimated selling value in the
ordinary course of business less estimated cost of completion and
estimated cost necessary to make sale and cost comprises cost of
material purchased and expenditure incurred in the normal course of
business in bringing such inventories to its location and includes,
where applicable, appropriate overheads based on normal level of
activity.
8. RETIREMENT BENEFITS
a) Defined Contribution Plan:
Contribution as per the Employee''s Provident Fund and Miscellaneous
Provisions Act,l962 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan:
Gratuity: In accordance with applicable Indian laws, the Company
provides gratuity,a defined benefit retirement plan (Gratuity Plan)
covering all employees.The gratuity Plan provides a lump sum payment to
vested employees, at retirement or termination of employment, an amount
based on the respective employee''s last drawn salary and the years of
employment with the Company. Liability with regard to Gratuity Plan is
accrued based on actuarial valuation at the balance Sheet date.
Liability for Leave Encashment is treated as a Short-term liability and
is accounted for as per the rules of the Company in force.
9. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions take
place. The Company recognizes gains/losses on foreign exchange rate
fluctuations relating to current assets and current liabilities at the
end of the year.
10. BORROWING COSTS
Borrowing costs, which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the costs of such
assets. Other Borrowing costs are recognized as expenses in the year in
which they are incurred.
1 1. TAXATION
a) Current year Charge:
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act, 1961.
b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
12. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/external factors.An impairment loss is recognized wherever the
carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the asset''s net selling price and
value in use. In assessing value in use, estimated future cash flows
are discounted to their present value.
13. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:
Contingent liabilities arising from claims, litigation, assessment,
etc., are provided for when it is probable that a liability may be
incurred and the amount can be reliably estimated.
Mar 31, 2013
1. BASIS OF ACCOUNTING
The financial statements of Vijay Textiles Limited (VTL or Company)
have been prepared with Generally Accepted Accounting Principles (GAAP)
in India under the historical cost convention on the basis of a going
concern with revenues recognized and expenses accounted on their
accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation. All
expenditure of capital nature is capitalized. Such expenditure
comprises of purchase price, import duties, levies and any directly
attributable cost of bringing the assets to their working condition for
intended use. Depreciation is provided under the Straight Line Method
at rates prescribed under Schedule XIV to the Companies Act, 1956.
3. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied with. Grants and subsidies
received during the year related to specific fixed assets are shown as
deduction from the gross value of the asset concerned.
4. REVENUE RECOGINITION
Revenue recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operation
includes sale of goods and the same is recognised on transfer of
significant risk and rewards
5. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
6. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value whichever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower. Net realizable value is the estimated selling value in the
ordinary course of business less estimated cost of completion and
estimated cost necessary to make sale.
7. RETIREMENT BENEFITS
a) Defined Contribution Plan:
Contribution as per the Employee''s Provident Fund and Miscellaneous
Provisions Act, 1962 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan:
Gratuity: In accordance with applicable Indian laws, the Company
provides gratuity, a defined benefit retirement plan (Gratuity Plan)
covering all employees. The gratuity Plan provides a lump sum payment
to vested employees, at retirement or termination of employment, an
amount based on the respective employee''s last drawn salary and the
years of employment with the Company. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the balance Sheet date.
Liability for Leave Encashment is treated as a Short-term liability and
is accounted for as per the rules of the company in force.
8. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions take
place. The Company recognizes gains/losses on foreign exchange rate
fluctuations relating to current assets and current liabilities at the
end of the year.
9. BORROWING COSTS
Borrowing costs, which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the costs of such
assets. Other Borrowing costs are recognized as expenses in the year in
which they are incurred.
10. TAXATION
a) Current year Charge:
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act, 1961.
b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
11. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the asset''s net selling price and
value in use. In assessing value in use, estimated future cash flows
are discounted to their present value.
12. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:
Contingent liabilities arising from claims, litigation, assessment,
etc., are provided for when it is probable that a liability may be
incurred and the amount can be reliably estimated.
Mar 31, 2012
1. BASIS OF ACCOUNTING
The financial statements of Vijay Textiles Limited (VTL or Company)
have been prepared with Generally Accounting Principles in India (GAAP)
under the historical cost convention on the basis of a going concern
with revenues recognized and expenses accounted on their accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation. All
expenditure of capital nature is capitalized. Such expenditure
comprises of purchase price, import duties, levies and any directly
attributable cost of bringing the assets to their working condition for
intended use. Depreciation is provided under the Straight Line Method
at rates prescribed under Schedule XIV to the Companies Act, 1956.
3. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied with. Grants and subsidies
received during the year related to specific fixed assets is shown as
deduction from the gross value of the asset concerned.
4. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
5. INVESTMENTS
Long-term investments are stated at cost, and provision is made when
there is a decline, other than temporary in the carrying value of such
investments.
6. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value whichever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower.Net realizable value is the estimated selling value in the
ordinary course of business, less estimated cost of completion and
estimated cost necessary to make sale.
7. RETIREMENT BENEFITS
a) Defined Contribution Plan:
Contribution as per the Employee's Provident Funds and Miscellaneous
Provisions Act, 1962 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan:
Gratuity: In accordance with applicable Indian laws, the Company
provides gratuity, a defined benefit retirement plan (Gratuity Plan)
covering all employees. The gratuity Plan provides a lump sum payment
to vested employees, at retirement or termination of employment, an
amount based on the respective employee's last drawn salary and the
years of employment with the Company. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the balance Sheet date.
Liability for Leave Encashment is treated as a Short term liability and
is accounted for as per the rules of the company in force.
8. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions took place
.The Company recognizes gains/losses on foreign exchange
rate fluctuation relating to current assets and current liabilities at
the year end.
9. BORROWING COSTS
Borrowing Costs which are directly attributable to the acquisition/
construction of fixed assets, till the time such assets are ready for
intended use, are capitalized as part of the costs of such assets.
Other Borrowing costs are recognized as expenses in the year in which
they are incurred.
10. TAXATION
a) Current year Charge:
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act; 1961.
b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
11. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the asset's net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value.
12. CONTINGENT LIABILITIES- PROVISIONS AND CONTINGENT ASSETS:
Contingent liabilities arising from claims, litigation, assessment, etc
are provided for when it is probable that a liability may be incurred
and the amount can be reliably estimated.
Mar 31, 2011
1. We have audited the attached Balance Sheet of VIJAY TEXTILES
LIMITED as at 31.03.2011, the Profit & Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards required that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes, examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes,
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003, issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956 of India, we enclose in the
Annexure, a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in Sub-Section (3C) of Section 211 of the
Companies Act, 1956;
e. On the basis of written representations received from the
Directors, as on 31.03.2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31.03.2011 from being appointed as a Director in terms of Clause (g) of
Sub-Section (1) of Section 274 of the Companies Act, 1956;
f. In our opinion and to the best of our information and according to
the explanations given to us; the said accounts read together with the
accounting policies and notes forming part of accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011; ii. in the case of the Profit & Loss
Account, the Profit for the year ended on that date; and iii. in the
case of the Cash Flow Statement, of the cash flows for the year ended
on that date.
ANNEXURE TO THE AUDITORS' REPORT : Re : VIJAY TEXTILES LIMITED
[referred to in paragraph 3 of our report of even date]
(i) a. The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. All the assets have not been physically verified by the Management
during the year but there is a regular programme of verification, which
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such verification.
c. During the year few fixed assets have been disposed off by the
Company. On the basis of information and explanations given to us, we
are of the opinion, that disposal of the part of fixed assets has not
affected the going concern status of the Company.
(ii) a. The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
b. The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) a. The Company has not granted loans, secured or unsecured, to
Companies, Firms, or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
b. During the year the Company has taken unsecured loans from two
parties, a sum of Rs 6727.44 Lakhs and repaid Rs 2881.05 Lakhs to two
parties and the total amount outstanding as on 31.03.2011 was Rs 6942.15
Lakhs payable to two parties covered under register maintained under
Section 301 of the Companies Act, 1956.
c. In our opinion, the rate of interest and other terms and conditions
on which loans were taken from Companies, Firms, or other parties
covered under the register maintained under Section 301 of the
Companies Act, 1956, are not prima facie, prejudicial to the interest
of the Company.
d. According to the information and explanation given to us, the
Company is regular in repayment of the principle and interest.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to the purchases of inventory, fixed assets and
with regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal controls.
(v) a. According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered. b. In our opinion and according to the
information and explanations given to us, the transactions made in
pursuance of contracts or arrangements entered in the register
maintained under Section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to prevailing market
prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A, 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under. (vii) In our
opinion, the Company has an internal audit system commensurate with its
size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) a. According to the information and explanations given to us and
the records of the Company examined by us, the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, investor education and protection fund,
employees' state insurance, income tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
applicable to it.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax, customs duty, excise duty and cess were in
arrears, as at 31.03.2011 for a period of more than six months from the
date of became payable.
c. According to the information and explanations given to us, there
are no dues of sales tax, income tax, customs duty, wealth tax, service
tax, excise duty and cess which are not deposited on account of
dispute.
(x) In our opinion, the Company has no accumulated losses as at
31.03.2011 and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
(xi) According to the information and explanation given to us, the
Company has not defaulted in repayment of dues to financial
institutions, bank and debenture holders as at balance sheet date.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities. Accordingly the provisions of clause 4
(xii) of the Companies (Auditors' Report) Order, 2003 are not
applicable to the Company. (xiii) In our opinion, the Company is not a
chit fund or a nidhi/mutual benefit fund/ society. Therefore, the
provisions of clause 4
(xiii) of the Companies (Auditors' Report) Order, 2003 are
not applicable to the Company. (xiv) In our opinion, the Company is
not dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the provisions of clause 4(xiv) of the
Companies (Auditors' Report) Order, 2003 are not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were raised.
(xvii) According to the information and explanations given to us and on
the overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investments.
(xviii) According to the information and explanation given to us, the
Company has made preferential allotment of warrants to parties covered
in the register maintained under Section 301 of the Companies Act,
1956. In Our opinion, the price at which warrants have been issued is
not prejudicial to the interest of the Company.
(xix) According to the information and explanation given to us, the
Company has not issued any debentures. Therefore, the provisions of
clause 4
(xix) of the Companies (Auditors' Report) Order, 2003 are not
applicable to the Company.
(xx) According to the information and explanation given to
us, the Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Companies
(Auditors' Report) Order, 2003 are not applicable to the Company.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For LAXMINIWAS & JAIN
Firm Registration Number : 001859S
Chartered Accountants
Place: Secunderabad (LAXMINIWAS SHARMA)
Date:26th May, 2011 Partner
Membership No. 014244
1. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost
convention on the basis of a going concern with revenues recognized and
expenses accounted on their accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation.
Expenditure which is of capital nature is capitalized. Such expenditure
comprises purchase price, import duties, levies and any directly
attributable cost of bringing the assets to their working condition.
Depreciation is provided under the Straight Line Method at rates
prescribed under Schedule XIV to the Companies Act, 1956.
3. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied with. Grants and subsidies
received during the year related to specific fixed assets is shown as
deduction from the gross value of the asset concerned.
4. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
5. INVESTMENTS
Long-term investments are stated at cost, and provision is made when
there is a decline, other than temporary in the carrying value of such
investments.
6. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value whichever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower.
7. EMPLOYEE BENEFITS
a) Defined Contribution Plan :
Contribution as per the Employee's Provident Funds and Miscellaneous
Provisions Act, 1962 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan :
Gratuity : In accordance with applicable Indian laws, the Company
provides gratuity, a defined benefit retirement plan (Gratuity Plan)
covering all employees. The gratuity Plan provides a lump sum payment
to vested employees, at retirement or termination of employment, an
amount based on the respective employee's last drawn salary and the
years of employment with the Company. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the Balance Sheet date.
Liability for Leave Encashment is treated as a Short term liability and
is accounted for as per the rules of the company in force.
8. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions took
place. The Company recognizes gains/losses on foreign exchange rate
fluctuation relating to current assets and current liabilities at the
year end.
9. FINANCIAL DERIVATIVES HEDGING TRANSATIONS
In respect of derivatives contracts, premium paid, provision for losses
on restatement/losses on settlement are recognized in the Profit and
Loss account.
10. BORROWING COSTS
Borrowing Costs which are directly attributable to the acquisition/
construction of fixed assets, till the time such assets are ready for
intended use, are capitalized as part of the costs of such assets.
Other Borrowing costs are recognized as expenses in the year in which
they are incurred.
11. TAXATION
a) Current year Charge :
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act; 1961.
b) Deferred Ta x :
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
12. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the asset's net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value.
13. CONTINGENT LIABILITIES - PROVISIONS AND CONTINGENT ASSETS :
Contingent liabilities arising from claims, litigation, assessment, etc
are provided for when it is probable that a liability may be incurred
and the amount can be reliably estimated.
Mar 31, 2010
1. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost
convention on the basis of a going concern with revenues recognized and
expenses accounted on their accrual.
2. FIXED ASSETS
Fixed Assets are stated at cost, less accumulated depreciation.
Expenditure which is of capital nature is capitalized. Such expenditure
comprises purchase price, import duties, levies and any directly
attributable cost of bringing the assets to their working condition.
Depreciation is provided under the Straight Line Method at rates
prescribed under Schedule XIV to the Companies Act, 1956.
3. GOVERNMENT GRANTS
Grants and subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that all the
underlying conditions will be complied.
4. LEASES
a) Rentals applicable to operating leases where substantially all of
the benefits and risks of ownership remain with the lessor are charged
against profits as per the terms of the lease agreement over the lease
period.
b) Assets created on the leasehold property are depreciated over the
period of the lease.
5. INVESTMENTS
Long-term investments are stated at cost, and provision is made when
there is a decline, other than temporary in the carrying value of such
investments.
6. INVENTORIES
Raw Materials, Stores & Spares and Work in Process are valued at cost
or net realizable value which ever is lower using FIFO cost method.
Finished Goods are valued at cost or net realizable Value, whichever is
lower.
7. EMPLOYEE BENEFITS
a) Defined Contribution Plan:
Contribution as per the Employees Provident Funds and Miscellaneous
Provisions Act, 1962 towards Provident Fund and Family Pension Fund are
provided for and payments in respect thereof are made to the relevant
authorities on actual basis.
b) Defined Benefit Plan:
Gratuity: In accordance with applicable Indian laws, the Company
provides gratuity, a defined benefit retirement plan (Gratuity Plan)
covering all employees. The gratuity Plan provides a lump sum payment
to vested employees, at retirement or termination of employment, an
amount based on the respective employees last drawn salary and the
years of employment with the Company. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the balance Sheet date.
Liability for Leave Encashment is treated as a Short term liability and
is accounted for as per the rules of the company in force.
8. FOREIGN CURRENCY TRANSACTIONS
Revenue transactions in foreign currency are recorded at the exchange
rates prevailing on the dates when the relevant transactions took place
.The Company recognizes gains/losses on foreign exchange rate fluctuation
relating to current assets and current liabilities at the year end.
9. FINANCIAL DERIVATIVES HEDGING TRANSATIONS
In respect of derivatives contracts, premium paid, provision for losses
on restatement/losses on settlement are recognized in the Profit and
Loss account.
10. BORROWING COSTS
Borrowing Costs which are directly attributable to the acquisition/
construction of fixed assets, till the time such assets are ready for
intended use, are capitalized as part of the costs of such assets.
Other Borrowing costs are recognized as expenses in the year in which
they are incurred.
11. TAXATION
a) Current year Charge:
The provision for taxation is based on assessable profits of the
Company as determined under the Income Tax Act; 1961.
b) Deferred Tax:
The Company is providing and recognizing deferred tax on timing
differences between taxable income and accounting income subject to
consideration of prudence.
12. IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is greater of the assets net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value.
13. CONTINGENT LIABILITIES- PROVISIONS AND CONTINGENT ASSETS:
Contingent liabilities arising from claims, litigation, assessment, etc
are provided for when it is probable that a liability may be incurred
and the amount can be reliably estimated.