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Aarvee Denims and Exports Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2018

1 Corporate Information

AARVEE DENIMS AND EXPORTS LIMITED ("the company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 2013 ("the Act" earstwhile Companies Act, 1956). Its equity shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of denim and non denim Fabrics. The company caters to both domestic and international markets.

2 Statement of Compliance and Basis of Preparation of Financial Statements

2.1 Statement of compliance

The financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as issued under the Companies (Indian Accounting Standards) Rules, 2015.

Upto the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer note - 51 for details of first time adoption exemptions availed by the Company.

The standalone Ind AS financial statements are presented in Indian Rupees and all values are rounded to the nearest lakh (Rupees 00,000), except where otherwise indicated. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding off.

2.2 Basis of preparation of Financial Statement

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the 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 a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

b. Terms/rights attached to equity shares

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

During the year ended 31st March 2018, the amount of per share dividend recognized as distributions to equity shareholders was Rs. NIL (31st March 2017: Rs.NIL).

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

Nature and purpose of reserves Capital redemption reserve

The company has recognized capital redemption reserve, for cumulative redeemable non convertible preference shares. The amount of capital redemption reserve is equal to nominal amount of the preference shares.

General reserve

General reserve is created from time to time by way of transfer profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Security premium

The amount received in excess of face value of the equity shares, in relation to issuance of equity, is recognized in securities premium reserve.

Retained earning

Retained earnings are the profits that the company has earned till date, less any transfers to general reserve, dividends or other distributions paid to the shareholders.

Nature of Securities:

a. Secured by mortgage of all fixed assets of Unit- I (Narol), Unit- II (Sari), Unit- III (Vijay Farm) and first charge by way of hypothecation of fixed assets and second charge on the current assets of Unit- I (Narol), Unit- II (Sari), Unit- III (Vijay Farm) & Unit- IV (Sari).

b. Secured by way of hypothecation of respective motor vehicles purchased.

c. Specific charge on assets purchased from the proceeds of Loan.

b. Nature of Securities:

Loans are Secured by hypothecation of all current assets of Unit -I (Narol), Unit- II (Sari), Unit- III (Vijay Farm), Unit- IV (Sari) and second charge on the fixed assets of Unit -I (Narol),Unit- II (Sari), Unit- III (Vijay Farm), Unit- IV (Sari) and hypothecation of 2 Windmills located at Lamba and 1 Windmill located at Kutch.

Note : The Government of India introduced Goods and Service Tax (GST) with effect from 1st July 2017 which partly replaced excise duty. Consequently the revenue from operations for period 1st July 2017 to 31st March 2018 is net of GST. However, the revenue from operations for the period of 1st April 2017 to 30th June 2017 includes excise duty recovered on sales of Rs. Nil and year ended 31st March 2017 includes excise duty recovered on sales of Rs. 20.08 Lakhs.

The tax rate used for reconciliation above is the corporate tax rate of 20.389% as per MAT payable by corporate entities in India on taxable profits under Indian tax law. However, deferred tax is calculated at rate which enacted/substantially enacted as at March 31, 2018 at applicable @ 33.063%.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

These plans typically expose the Company to actuarial risks such as interest rate risk, salary risk and Investment Risk.

a) Interest risk: A fall in the discount rate which is linked to the G. Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

b) Salary risk: The present value of defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

c) Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

VI Sensitivity Analysis

Significant actuarial assumptions for the determination of defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligaton as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

VII Effect of plan on entity''s future cash flows

(i) Funding arragements and Funding policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the company, Any deficit in the assets arising as a result of such valuation is funded by the Company.

(ii) Expected contribution during the next annual reporting period

The Company''s best estimate of Contribution during the next year is Rs. 164.29 Lakhs.

3. Segment information

Operating segment have been identified on the basis of products / services and have been identified as per the quantitative criteria specified in the IND AS 108.

The Company has identified two reportable segments viz. Textile and Windmill. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

Disclosures required under Ind AS 108 - Operating Segments are as under

4. Derivative transactions:

The Company has entered into the following derivative instruments;

(a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to outstanding receivables, certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy which provides principles on use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The information on outstanding Forward Exchange Contracts entered into by the Company on accounts of receivables:

(b) Interest rate swaps to hedge against fluctuations in interest rate changes: No. of contracts: Nil 31 March, 2018 (2 No. of contracts 31 March, 2017 , 4 No. of contracts as at 31 March, 2016).

5. Financial risk management

The Company''s financial liabilities comprise mainly of borrowing, trade payables and other payables. The Company''s financial assets comprise mainly of cash and cash equivalent, other balance with banks, loans, trade receivable and other receivable. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

(A) Market risk

The Company is exposed to market risks on account of changes in interest rates, foreign exchange rates, liquidity and other market changes. These risks affect income and expenses of the Company. The objective of the Management of the Company is to maintain this risk within the acceptable parameters, while optimising returns.

(i) Interest rate risk

The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings. The Company monitors fluctuations in interest rate continuously and has laid policies and guidelines including to minimise impact of interest rate risk.

Interest rate sensitivity

A change in 50 bps in interest rates would have following impact on profit before tax

(ii) Foreign currency risk

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas and purchased from overseas suppliers in various foreign currencies.

Exposure on foreign currency sales and purchases are managed through the Company''s hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

(B) Credit risk

Credit risk is the risk of financial loss to the company if customers or counter party to a financial instruments fails to meet its contractual obligations and arises principally from the company''s receivables from customers.

All trade receivables are subject to credit risk exposure. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.

For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognized from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and relevant information that is available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.

(C) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity. The Company closely monitors its liquidity position and deploys a robust cash management system.

6. Capital Management

The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure with a view to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

7. Government Grant

Export Promotion Capital Goods (EPCG): This scheme allows import of certain capital goods including spares at zero duty subject to an export obligation for the duty saved on such capital goods. The duty saved on capital goods imported under EPCG scheme being Government Grant, is accounted as a Capital Grant as stated in the Accounting policy on Government Grant.

The Government Grant above represents unamortised amount of the subsidy referred to below, with the corresponding adjustment to the carrying amount of property, plant and equipment.

8. Disclosures under the MSMED Act, 2006

In the absence of any information from vendors regarding the status of their registration under the "Micro Small and Medium Enterprise Development Act 2006" the company is unable to comply with the disclosures required to be made under the said Act.

9. During the year, the gross amount to be spent by the Company for Corporate Social Responsibility expenditure is Rs. 16.33 Lakh and amount spent is Rs. NIL (As at 31.03.2017 Rs. 17.10 Lakh and amount spent is Rs. NIL).

10. First-time adoption of Ind AS

The Company has adopted Ind AS from 1st April, 2017 and the date of transition to Ind AS is 1st April, 2016. These being the first financial statements in compliance with Ind AS, the impact of transition has been accounted for in opening reserves and comparable periods have been restated in accordance with Ind AS 101 -"First-time Adoption of Indian Accounting Standards". The Company has presented a reconciliation of its equity under Previous GAAP to its equity under Ind AS as at 1st April, 2016 and 31st March, 2017 and of the total comprehensive income for the year ended 31st March, 2017 as required by Ind AS 101 in the financial statements.

Following are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

(a) Deemed cost for property, plant and equipment

The Company has elected to continue with the carrying value of all of its plant and equipment, investment property, and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

(b) Classification and measurements of financial assets

The classification of financial assets to be measured at amortised cost or fair value through other comprehensive income is made on the basis of the facts and circumstances that existed on the date of transition to Ind AS.

(c) Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

(d) Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

Reconciliation between previous GAAP and Ind AS

Ind As 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following reconciliations provides the explanations and quantification of the differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:-

Note: 1 Deferred Tax Adjustment

Deferred Tax have been recognised on the adjustments made on transition to Ind AS.

Note: 2 Amortisation of Loan Processing Fees

Under previous GAAP, the loan processing charges were normally recognised as expense as and when incurred. Under Ind AS, borrowings have been measured at amortised cost using effective interest rate. This has resulted into amortisation of loan processing charges over the period of borrowings.

Note: 3 Remeasurement of Post employment benefits obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2017 decreased by Rs. 57.45 lakhs . There is no impact on the total equity as at March 31, 2017.

11. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the company''s Ind AS financial statements are disclosed below. The company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs("MCA") has issued certain amendments to Ind AS through (Indian Accounting Standards) Amendment Rules, 2018. These amendments maintain convergence with IFRS by incorporating amendments issued by International Accounting Standards Board(IASB) into Ind AS and has amended the following standards:

i. Ind AS 115-Revenue from Contract with Customers

ii. Ind AS 21-The effect of changes in foreign exchanges rates

iii. Ind AS 12-Income Taxes

These amendments are effective for annual periods beginning on or after April 01, 2018. Application of these amendments will not have any recognition and measurement impact. However, it will require additional disclosure in the Ind AS financial statements.

The company is assessing the potential effect of the amendments on its Ind AS financial statements. The company will adopt these amendments, if applicable, from their applicability date.

12. Previous Year figures have been regrouped/ rearranged wherever considered necessary.

13. The financial statements were approved for issue by the board of directors on 24th May, 2018.


Mar 31, 2016

b. Terms/rights attached to equity shares

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

During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to equity shareholders was Rs.NIL (31st March 2015: Rs.NIL).

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

Nature of Securities:

1. Secured by mortgage of all fixed assets of Unit- I (Narol), Unit- II (Sari), Unit- III (Vijay Farm) and first charge by way of hypothecation of fixed assets and second charge on the current assets of Unit- I (Narol), Unit- II (Sari), Unit- III (Vijay Farm) & Unit- IV (Sari).

2. Secured by way of hypothecation of respective motor vehicles purchased.

3. Specific charge on assets purchased from the proceeds of Loan.

Nature of Securities:

1. Loans are Secured by hypothecation of all current assets of Unit -I (Narol), Unit- II (Sari), Unit-III (Vijay Farm), Unit- IV (Sari) and second charge on the fixed assets of Unit -I (Narol),Unit- II (Sari), Unit- III (Vijay Farm), Unit- IV (Sari) and hypothecation of 2 Windmills located at Lamba and 1 Windmill located at Kutch.

Notes :

4. The Company has adopted the provisions of para 46 / 46A of AS 11 - The Effects of Changes in Foreign Exchange Rates. Accordingly, exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. As a result - (a) Addition of an amount of Rs.355.46 Lacs (Previous Year Rs.277.36 Lacs) have been made to Gross Block of fixed assets, being the exchange difference on long term monetary items related to the acquisition of a depreciable capital asset and (b) Depreciation provided during the year includes Depreciation of ? 186.61 Lacs ( Previous Year Rs.154.27 Lacs) due to addition, being the exchange difference on long term monetary items related to the acquisition of a depreciable capital asset.

5. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in respect of certain assets as disclosed in Accounting Policy on Depreciation/Amortization. Accordingly the unamortized carrying value is being depreciated / amortized over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted by an amount of Rs.Nil [P.Y. Rs.239.01 lacs (net of tax Rs.114.79 lacs)] against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

6. Fixed Assets of Rs.420.33 lacs (Previous year Rs.163.83 lacs) damaged due to fire is already included in deduction of Gross Block of Fixed Assets and cumulative depreciation on the same is Rs.50.87 lacs (Previous Year Rs.35.36 lacs). (Refer note 32)

7. Addition to Fixed Assets includes capitalization of Borrowing Cost of Rs.15.14 lacs (Previous Year Rs. Nil).

(b) Defined Benefit Plan

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India who invests the funds as per IRDA guidelines, is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Compensated Absences is recognized in the same manner as gratuity.

f. Contributions expected to be paid to the plan during the next financial year Rs.42.17 Lacs (Previous Year Rs.79.72 Lacs).

The estimates or rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factor including supply and demand in the employment market. The above information is certified by the actuary.

8. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.887.02 lacs (Previous Year Rs. 1059.53 Lacs)

Note : In the opinion of the Company, the possibility relating to net outflow on the above accounts are remote.

9. There are no dues to Micro and Small enterprises as at 31st March, 2016. Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.

10. Exceptional Item

During the year the company has sold out it''s Power Plant and recognized the loss of Rs.473.20 lacs in the books of account and the same is reflected as exceptional item.

11. Claim on Fire

(a) On March 1, 2015, there was a fire in the packing department of Vijay Farm Unit of the Company resulting into a loss of finished goods, Work in Progress, Plant & Machinery, Factory Building, Furniture & Fixtures and other Miscellaneous items. The Company has the insurance policies of all the affected assets, so the Company has lodged claims with the insurance companies which claims include claim towards loss of the above stated assets and the Management believes that the amount of the claim has been ascertained as per the terms of the insurance policies and is certain about recovery of the claim based on its understanding of the terms of the insurance policies and related discussions with the representatives of the insurance companies at the time of putting up the claim. The carrying value of the assets destroyed in fire is estimated by the management at Rs.1,732.21 lacs. The loss has been accounted for in the books of the Company and the amount of the insurance claims of Rs.1,477.64 lacs has been recognized as revenue in the Statement of Profit & Loss during the year 2014-15. On the basis of loss assessment report of Surveyor, the company has written off Rs. 212.56 lacs and charged to Statement of Profit and Loss for the current financial year.

(b) On October 23, 2015, there was a fire in the spinning department of Matoda Unit of the Company resulting into partial loss of Plant & Machinery and other Miscellaneous items. The Company has the insurance policy of all the affected machineries, so the Company has lodged claims with the insurance company and the Management believes that the amount of the claim has been ascertained as per the terms of the insurance policy and is certain about recovery of the claim based on its understanding of the terms of the insurance policies and related discussions with the representatives of the insurance companies at the time of putting up the claim. The carrying value of the machineries destroyed in fire is estimated by the management at Rs. 369.46 lacs. The claim has been accounted for in the books of the Company as insurance claim receivable as at 31st March, 2016.

12. Segment information

(a) The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

(b) Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

13. Derivative transactions:

I. The Company has entered into the following derivative instruments;

(a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to outstanding receivables, certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy which provides principles on use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The information on outstanding Forward Exchange Contracts entered into by the Company on accounts of receivables:

(b) Interest rate swaps to hedge against fluctuations in interest rate changes: No. of contracts: 4 (4 No. of contracts as at 31 March, 2015) and Currency swaps (other than forward exchange contracts stated above) to hedge against fluctuations in changes in exchange rate. No. of contracts: NIL (1 No. of contract as at 31 March, 2015).

14. Previous Year figures have been regrouped/ rearranged wherever considered necessary.


Mar 31, 2015

1. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1059.53 lacs (Previous Year NIL).

2. There are no dues to Micro and Small enterprises as at 31st March, 2015. Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.

3. There is no amount due and outstanding as on 31st March, 2015 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs.1.86 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.

4. Claim on Fire

On March 1, 2015, there was a fire in the packing department of Vijay Farm Unit of the Company resulting into a loss of finished goods, Work in Progress, Plant & Machinery, Factory Building, Furniture & Fixtures and other Miscellaneous items. The Company has the insurance policies of all the effected assets, so the company has lodged claims with the insurance companies which claims include claim towards loss of the above stated assets. The carrying value of the assets destroyed in fire is estimated by the management at Rs.1732.21 lacs. The loss has been accounted for in the books of the Company and the amount of the insurance claims of Rs. 1477.64 lacs has been recognised as revenue in the Statement of Profit & Loss.

5. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6. Previous Year figures have been regrouped/ rearranged wherever considered necessary.


Mar 31, 2014

1. Terms/rights attached to equity shares

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

During the year ended 31st March 2014, the amount of per share dividend recognized as distributions to equity shareholders was Rs. NIL (31st March 2013: Rs. 0.50).

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

The Company has opted for accounting the exchange differences arising on reporting of Long term foreign currency monetary items in Line with Companies (Accounting Standards) Amendment Rules 2009 relating to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009. Accordingly, exchange differences on all Long term monetary items, with retrospective effect from April 01, 2007 are: (a) To the extent such items are used for the acquisition of a depreciable asset, added to / deducted from the cost of the asset and depreciated over the balance Life of the asset. As a resut addition of an amount of Rs. 784.26 Lacs have been made (Previous Year Rs. 414.21 Lacs) to Gross BLock of fixed assets, being the exchange difference on Long term monetary items reLated to the acquisition of a depreciabLe capitaL asset. (b) Depreciation provided during the year includes Depreciation of Rs. 86.11 Lacs ( Previous Year Rs. 23.06 Lacs) due to addition being the exchange difference on Long term monetary items reLated to the acquisition of a depreciabLe capital

2. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. NIL (Previous Year 761.28 Lacs)

3. Contingent Liabilities in respect of: (Rs. in Lacs) Particulars March 31,2014 March 31,2013

a. Service Tax Matters disputed in appeal 55.44 56.93

b. Custom duty payable on pending export obligations 359.63 326.57

c. Guarantees given by banks on behalf of the Company 815.85 459.36

4. There is no Micro and small Enterprises As at 31st March, 2014 as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.There are no dues to Micro and small Enterprises As at 31st March, 2014.

5. There is no amount due and outstanding as on 31st March, 2014 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs. 3.77 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.


Mar 31, 2013

Corporate Information

"AARVEE DENIMS AND EXPORTS LIMITED (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of denim and non denim Fabrics, Garments. The company caters to both domestic and international markets."

Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

1. Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 761.29 (Previous Year Rs. 249.83)

2. Contingent Liabilities in respect of:

(Rs.in lacs) Particulars 31st March, 2013 31st March, 2012

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 326.57 2,343.65

c. Letter of Credit 1,809.70 2,602.17

d. Guarantees given by banks on behalf of the Company 459.36 318.32

3. There are no dues to Micro and small Enterprises as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

4. There is no amount due and outstanding as on 31st March, 2013 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs. 10.27 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001.

5. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6. Derivative transactions :

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to outstanding receivables,certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy which provides principles on use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

7. Previous Year figures have been regrouped/ rearranged wherever considered necessary.


Mar 31, 2012

Corporate Information

AARVEE DENIMS AND EXPORTS LIMITED (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of denim and non denim Fabrics, Garments. The company caters to both domestic and international markets.

Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a. Terms/rights attached to equity shares

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

During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. Nil (31st March 2011: Rs..0.50).

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

b. Terms of conversion/redemption of FCCB

The Company issued Zero Coupon Foreign Currency Convertible Bonds ("FCCBs") of face value of US$ 20 Million on April 10, 2007.The FCCBs have been listed on the Singapore Exchange Securities Trading Limited and are convertible, by holders of the FCCBs, at any time on or after May 10, 2008 and up to the close of business on March 28, 2012 into fully paid equity shares of face value of Rs..10 each, to be newly issued by the Company at agreed upon initial Conversion Price (as defined in the "terms and Conditions of the Bonds") of Rs..148.93 per equity share. As per the terms of the FCCBs, the conversion price was reset at Rs..126.59 and Rs. 113.93 per share on 10th April 2008 and 10th April 2010 respectively. In case the holders of FCCBs do not opt for the conversion, the FCCBs will be redeemed in US dollars on April 11, 2012 at a premium of 48.02 per cent of their principal amount. Such Premium on redemption of FCCBs is being adjusted by the Company against the balance of Securities Premium Account on time period basis over the life of the FCCBs. FCCB outstanding as on 31.03.2012 is US$ 4.00 Million.

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India who invests the funds as per IRDA guidelines, is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

c. Contributions expected to be paid to the plan during the next financial year Rs. 52.11 Lacs (Previous Year Rs. 29.59 Lacs)

The estimates or rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factor including supply and demand in the employment market. The above information is certified by the actuary.

1 Capital Commitments

The estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 249.83 lacs (Previous Year Rs. 3977.84 lacs)

2 Contingent Liabilities in respect of: (Rs. in lacs)

Particulars March 31, 2012 March 31, 2011

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 2,343.65 2,515.05

c. Letter of Credit 2,602.17 3,665.21

d. Guarantees given by banks on behalf of the Company 318.32 78.00

3 There are no dues to Micro and small Enterprises as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

4 There is no amount due and outstanding as on 31st March, 2012 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs..7.46 lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001

5 SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

6 Derivative transactions:

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company's strategy which provides principles on use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The information on outstanding Forward Exchange Contracts entered into by the Company on accounts of receivables:

7 The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of the revision to the Schedule VI as per a notification issued during the year by the Central Government, the financial statements for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year figures have been accordingly regrouped/reclassified to confirm to the current year's classification.


Mar 31, 2011

1) The estimated amount of contracts remaining to be executed on capital accounts and not provided forRs. 3977.84 Lacs (Previous Year 687.08 Lacs)

2) Contingent Liabilities in respect of: (Rs. in Lacs)

Particulars March 31,2011 March 31,2010

a. Service Tax Matters disputed in appeal 56.93 56.93

b. Custom duty payable on pending export obligations 2515.05 1336.00

c. Letter of Credit 3665.21 1750.61

d. Guarantees given by banks on behalf of the Company 78.00 21.00

3) Interest and Finance Charges are net of interest subsidy received under TUFS scheme amounting to Rs.73.41 Lacs (Previous Year Rs. 124.03 Lacs).

4) The Company issued Zero Coupon Foreign Currency Convertible Bonds (" FCCBs") of face value of US$ 20 Million on April 10, 2007.The FCCBs have been listed on the Singapore Exchange Securities Trading Limited and are convertible, by holders of the FCCBs, at any time on or after May 10,2008 and up to the close of business on March 28,2012 into fully paid equity shares of face value of Rs.10 each, to be newly issued by the company at agreed upon initial Conversion Price (as defined in the "Terms and Conditions of the Bonds") of Rs.148.93 per equity share. As per the terms of the FCCBs, the conversion price was reset at Rs.126.59 and Rs. 113.93 per share on 10th April 2008 and 10th April 2010 respectively. In case the holders of FCCBs do not opt for the conversion, the FCCBs will be redeemed in US dollars on April 11, 2012 at a premium of 48.02 per cent of their principal amount. Such Premium on redemption of FCCBs is being adjusted by the Company against the balance of Securities Premium Account on time period basis over the life of the FCCBs.

In June 2010, as per approval of the Reserve Bank of India, the Company has further bought back and cancelled FCCBs of the Face Value of US$ 5 Million (Previous Year US$ 7.5 Million), at a discount of US$ 0.172 Million (Previous Year US$1.875 Million) to the face Value. This has resulted in a net gain of Rs.75.30 Lacs (Previous Year 772.96 Lacs) which has been credited to Profit and Loss Account for the year and has been disclosed in schedule 12,Other Income. Consequent upon such buyback and cancellation the FCCBs, corresponding provision of Rs. 598.78 Lacs (Previous Year Rs. 649.07 Lacs) made for premium on redemption of the FCCBs, has been reversed and adjusted to the Securities Premium Account. FCCB outstanding as on 31.03.2011 is US$ 7.5 Million.

5) There are no dues to Micro and small Enterprises as at 31 th March, 2011 .This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

6) There is no amount due and outstanding as on 31 st March, 2011 to be credited to Investor Education and Protection Fund. During the year the Company has credited Rs.4.44 Lacs, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act,1956 read with the Investor Education and Protection Fund(Awareness and Protection of Investors) Rules, 2001

7) Derivative transactions:

i. The Company has entered into the following derivative instruments;

a) The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company's strategy which provides principles on use of such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.

8. SEGMENT INFORMATION:

a. The Company has identified two reportable segments viz. Textile and Power Generation Unit. Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure and the internal financial reporting systems.

b. Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as" Un allocable".

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India who invests the funds as per IRDA guidelines, is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

9) RELATED PARTY DISCLOSURES:

(As identified by Management)

Name of the party and relationships

a) Companies and firms in which Directors/Directors' Relatives exercise control / significant influence: Companies Firms

New Ahmedabad Synthetics Pvt. Ltd. B. Kalpeshkumar & Co.

Vee Bee Textile Pvt. Ltd. Parmanand Rajeshkumar

Rentex Weavers Ltd. Virendrabhai Bhogilal & Co.

Twenty First Century Marketing Ltd. Arora Agencies

EnnbeeTextiles Pvt. Ltd. Parmanand Vinodkumar

V.B. Investment Pvt. Ltd. Pari Bhogilal Laxmichand

Pee Vee Synthetics Pvt. Ltd. Parmanand Arora & Sons, HUF

Shipa Fabrics Pvt. Ltd. T.P. Vinodkumar, HUF

Kashvi Holding Pvt. Ltd. T.P. Rajeshkumar, HUF

Kashvi Investments Pvt. Ltd. K.V. Enterprise

Bhansali Tradelink Pvt. Ltd. A.V. Enterprise

Maverlin International Pvt. Ltd. A Star Fibres

b) Key management personnel

Vinodkumar P.Arora RajeshP.Arora

Parmanand T. Arora AshishVShah

KalpeshV.Shah

c) Relatives of key management personnel

NipunV.Arora RenuArora

PankajV. Arora Rita Arora

HeenaKhanna Kasturanrani Arora

Chinmaya P.Arora BhriguN. Arora

JahanviN. Arora Parul K. Shah

BelaA.Shah PankilK.Shah

PreetiN. Arora Shikha Arora

SomniChawla SarthakP Arora

10) QUANTITATIVE INFORMATION:

a) Class of Goods Manufactured

i) Denim Fabric

ii) Non Denim Cotton Fabric

iii) Electrical Energy

iv) Readymade Garment

11) Previous Year's figures have been regrouped / rearranged wherever necessary so as to make them comparable with the figures of the current year.

12) Schedule 1 to 19 form integral part of Balance Sheet and Profit and Loss Account and are duly authenticated.

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