Mar 31, 2017
1. Basis of preparation of standalone financial statements - The standalone financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (âthe 2013 Actâ)/Companies Act, 1956 (âthe 1956 Actâ), as applicable. The standalone financial statements have been prepared on accrual basis under the historical cost convention except in so far as they relate to revaluation of net assets. The accounting policies adopted in the preparation of the standalone financial statements are consistent with those followed in the previous year.
All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in the revised schedule II to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
2. Use of estimates - The preparation of the standalone financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the standalone financial statements, disclosure of contingent liabilities and reported amounts of revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt with in the period in which the results are known/materialize.
3. Revenue recognition - Revenue from sale of products is recognized on dispatch of goods to customers in accordance with the terms of sales. Revenue from services is recognized in accordance with the specific terms of contract on performance. Other operating revenues comprise of income from ancillary activities incidental to the operations of the company and is recognized when the right to receive the income is established as per the terms of the contract.
4. Other Income - Interest income is accounted on accrual basis. Dividend income is accounted when the right to receive is established.
5. Foreign currency transactions - Foreign currency transactions (including booking/cancellation of forward contracts) are recorded at the rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currency, other than those covered by forward exchange contracts, are translated at year end foreign exchange rates. Exchange differences arising on settlements are recognized in the Statement of Profit and Loss. In case of forward exchange contracts which are entered into hedge the foreign currency risk of a receivable/payable recognized in these standalone financial statements, premium or discount on such contracts are amortized over the life of the contract and exchange differences arising thereon in the reporting period are recognized in the Statement of Profit and loss. Forward exchange contracts which are arranged to hedge the foreign currency risk of a firm commitment is marked to market at the year end and the resulting losses, if any, are charged to the Statement of Profit and loss.
6. Employee benefits - (i) Short term employee benefit obligations are estimated and provided for; (ii) Post employment benefits and other long term employee benefits - (1) Company''s contribution to provident fund, labour welfare fund, employees state insurance corporation and other funds are determined under the relevant schemes and /or statute and charged to revenue; (2) Company''s liability towards gratuity and compensated absences are actuarially determined at each balance sheet date using the projected unit credit method. Actuarial gains and losses are recognized in revenue.
Statement on Significant Accounting Policies forming part of the Standalone Financial Statements for the year ended March 31, 2017 (contd.)
7. Fixed Assets - Tangible fixed assets - All costs relating to acquisition of fixed assets net of value added tax and terminal excise duty refund under Export Promotion Capital Goods Scheme, subject to the economic life and the cost being in excess of certain limits, are capitalized. Expenditure directly related and incidental to construction are capitalized up to the date of attainment of commercial production. Interest and other related costs, including amortized cost of borrowings attributable only to major projects are capitalized as part of the cost of the respective assets. In the case of Wind energy converters, cost of land on which the converters have been erected is capitalized as cost of the said converters. Cost of structures on leasehold land, where the estimated useful life is more than ten years, is capitalized. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
8. Depreciation/amortization - Tangible fixed assets - Depreciation on fixed assets is provided on straight line basis. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used:
9. Impairment of assets - The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized in the Statement of Profit and Loss wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. Provision for impairment will be reviewed periodically and amended depending on changes in circumstances.
10. Investments - Non-current investments are stated at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investment, if any. Current investments are valued at lower of cost and fair value.
11. Inventories - The governing principle of valuation of Inventories (other than process waste) is the lower of cost and net realizable value. The cost for the said purpose (i) in the case of stores and spare parts, is the weighted average cost (net of Cenvat credit/value added tax, if any), (ii) in the case of cotton in process and manufactured yarn, is the cost adopting the absorption costing method, and
(iii) is without deduction of the adjustment made for power generated through Wind energy converters and adjusted against the cost of power purchased from state electricity board. Process waste is valued at net realizable value. Provision is made for obsolete, slow moving and damaged items of inventory, if any.
12. Government grants - Capital grants from government relating to depreciable assets are treated as deferred income and disclosed as a capital reserve and amortized over the useful life of the concerned asset. Cenvat credit relating to capital assets acquired is treated as capital reserve and amortized over the useful life of the concerned assets by transfer profit and loss account and considered under depreciation. Grants/incentives other than those mentioned above are reckoned in the profit and loss account in the year of eligibility.
13. Borrowing costs - Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Profit and Loss Statement in the period in which they are incurred.
14. Research and development - Revenue expenditure on research and development is charged to the profit and loss account as incurred. Capital expenditure on research and development, where the same represents cost of plant, machinery, equipment and other tangible assets, if any, is given the same accounting treatment as applicable to other capital expenditure.
15. Deferred tax - Deferred income tax charge reflects the impact of the current period timing differences between taxable income and accounting income, other than differences capable of getting reversed during the ''tax holiday'' period, subject to consideration of prudence. Where there are unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only to the extent there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the period and available case laws to reassess realization/liabilities.
16. Provisions and contingencies - To recognize a provision when (i) the company has a present obligation as a result of a past event; (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. A disclosure of a contingent liability is made when there is a possible obligation that may, but probably will not, require outflow of resources. Where there is possible obligation or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
17. Cash flow statement - Cash flow statements are reported using the indirect method, whereby profit/(loss) before extra-ordinary items/exceptional items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipt or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information including taxes paid relating to these activities.
Mar 31, 2015
1. Basis of preparation of financial statements - The financial
statements of the Company have been prepared in accordance with the
generally accepted accounting principles in India (Indian GaAp) to
comply with the Accounting standards specified under section 133 of the
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
2014 and the relevant provisions of the Companies Act, 2013 ("the 2013
Act")/Companies Act, 1956 ("the 1956 Act"), as applicable. The
financial statements have been prepared on accrual basis under the
historical cost convention except in so far as they relate to
revaluation of net assets. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
All assets and liabilities have been classified as current or
non-current as per the company's normal operating cycle and other
criteria set out in the revised schedule II to the Companies Act, 2013.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has determined its operating cycle as twelve
months for the purpose of current and non- current classification of
assets and liabilities.
2. Use of estimates - The preparation of the financial statements in
conformity with the generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities on the date of the financial
statements, disclosure of contingent liabilities and reported amounts
of revenues and expenses for the year. Estimates are based on
historical experience, where applicable and other assumptions that
management believes are reasonable under the circumstances. Actual
results could vary from these estimates and any such differences are
dealt with in the period in which the results are known/materialise.
3. Revenue recognition - Revenue from sale of products is recognized
on despatch of goods to customers in accordance with the terms of
sales. Revenue from services is recognized in accordance with the
specific terms of contract on performance. Other operating revenues
comprise of income from ancillary activities incidental to the
operations of the company and is recognized when the right to receive
the income is established as per the terms of the contract.
4. Other Income - Interest income is accounted on accrual basis.
Dividend income is accounted when the right to receive is established.
5. Foreign currency transactions - Foreign currency transactions
(including booking/cancellation of forward contracts) are recorded at
the rates prevailing on the date of the transaction. Monetary assets
and liabilities in foreign currency, other than those covered by
forward exchange contracts, are translated at year end foreign exchange
rates. Exchange differences arising on settlements are recognized in
the Statement of Profit and Loss. In case of forward exchange
contracts which are entered into hedge the foreign currency risk of a
receivable/payable recognized in these financial statements, premium or
discount on such contracts are amortised over the life of the contract
and exchange differences arising thereon in the reporting period are
recognised in the Statement of Profit and loss. Forward exchange
contracts which are arranged to hedge the foreign currency risk of a
firm commitment is marked to market at the year end and the resulting
losses, if any, are charged to the Statement of Profit and loss.
6. Employee benefits - (i) Short term employee benefit obligations are
estimated and provided for; (ii) Post employment benefits and other
long term employee benefits - (1) Company's contribution to provident
fund, labour welfare fund, employees state insurance corporation and
other funds are determined under the relevant schemes and /or statute
and charged to revenue; (2) Company's liability towards gratuity and
compensated absences are actuarially determined at each balance sheet
date using the projected unit credit method. Actuarial gains and losses
are recognised in revenue.
7. Fixed Assets - Tangible fixed assets - All costs relating to
acquisition of fixed assets net of value added tax and terminal excise
duty refund under Export Promotion Capital Goods Scheme, subject to the
economic life and the cost being in excess of certain limits, are
capitalised. Expenditure directly related and incidental to
construction are capitalized upto the date of attainment of commercial
production. Interest and other related costs, including amortised cost
of borrowings attributable only to major projects are capitalized as
part of the cost of the respective assets. In the case of Wind energy
converters, cost of land on which the converters have been erected is
capitalised as cost of the said converters. Cost of structures on
leasehold land, where the estimated useful life is more than ten years,
is capitalized. Subsequent expenditure relating to fixed assets is
capitalised only if such expenditure results in an increase in the
future benefits from such asset beyond its previously assessed standard
of performance.
8. Depreciation/amortization - Tangible fixed assets - Depreciation on
fixed assets is provided on straight line basis. Depreciation is
provided based on useful life of the assets as prescribed in Schedule
II to the Companies Act, 2013 except in respect of the following
assets, where useful life is different than those prescribed in
Schedule II are used:
Particulars Depreciation
Plant and machinery (Continuous Over its useful life of 18 years
process Plant) as Technically assessed
Wind energy convertors Over its useful life of 17 years
as Technically assessed
9. Impairment of assets - The carrying amount of assets are reviewed
at each balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss will be
recognised in the Statement of Profit and Loss wherever the carrying
amount of an asset exceeds its estimated recoverable amount. The
recoverable amount is the greater of the asset's net selling price and
value in use. Provision for impairment will be reviewed periodically
and amended depending on changes in circumstances.
10. Investments - Non-current investments are stated at cost. However,
provision for diminution is made to recognize a decline, other than
temporary, in the value of the investment, if any. Current investments
are valued at lower of cost and fair value.
11. Inventories - The governing principle of valuation of Inventories
(other than process waste) is the lower of cost and net realisable
value. The cost for the said purpose (i) in the case of stores and
spare parts, is the weighted average cost (net of Cenvat credit/value
added tax, if any), (ii) in the case of cotton in process and
manufactured yarn, is the cost adopting the absorption costing method,
and (iii) is without deduction of the adjustment made for power
generated through Wind energy converters and adjusted against the cost
of power purchased from state electricity board. Process waste is
valued at net realizable value. Provision is made for obsolete, slow
moving and damaged items of inventory, if any.
12. Government grants - Capital grants from government relating to
depreciable assets are treated as deferred income and disclosed as a
capital reserve and amortised over the useful life of the concerned
asset. Cenvat credit relating to capital assets acquired is treated as
capital reserve and amortised over the useful life of the concerned
assets by transfer profit and loss account and considered under
depreciation. Grants/incentives other than those mentioned above are
reckoned in the profit and loss account in the year of eligibility.
13. Borrowing costs - Borrowing costs include exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost. Borrowing costs that
are attributable to the acquisition or construction of qualifying
assets are capitalised as part of the cost of such assets. A qualifying
asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Profit and Loss Statement in the period in which they are incurred.
14. Research and development - Revenue expenditure on research and
development is charged to the profit and loss account as incurred.
Capital expenditure on research and development, where the same
represents cost of plant, machinery, equipment and other tangible
assets, if any, is given the same accounting treatment as applicable to
other capital expenditure.
15. Deferred tax - Deferred income tax charge reflects the impact of
the current period timing differences between taxable income and
accounting income, other than differences capable of getting reversed
during the 'tax holiday' period, subject to consideration of prudence.
Where there are unabsorbed depreciation or carry forward losses,
deferred tax assets are recognised only to the extent there is virtual
certainty of realisation of such assets. Other deferred tax assets are
recognised only to the extent there is reasonable certainty of
realisation in future. Deferred tax assets/liabilities are reviewed as
at each balance sheet date based on developments during the period and
available case laws to reassess realisation/liabilities.
16. Provisions and contingencies - To recognise a provision when (i)
the company has a present obligation as a result of a past event; (ii)
it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (iii) a reliable
estimate can be made of the amount of the obligation. A disclosure of a
contingent liability is made when there is a possible obligation that
may, but probably will not, require outflow of resources. Where there
is possible obligation or a present obligation where the likelihood of
outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2013
1. Basis of preparation of financial statements - The financial
statements are prepared in accordance with the generally accepted
accounting standards referred to in Section 211(3C) of the Companies
Act, 1956, under historical cost convention except in so far as they
relate to revaluation of net assets.
All assets and liabilities have been classified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in the revised schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has determined its operating cycle as twelve
months for the purpose of current and non-current classification of
assets and liabilities.
2. Use of estimates - The preparation of the financial statements in
conformity with the generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities on the date of the financial
statements, disclosure of contingent liabilities and reported amounts
of revenues and expenses for the year. Estimates are based on
historical experience, where applicable and other assumptions that
management believes are reasonable under the circumstances. Actual
results could vary from these estimates and any such differences are
dealt with in the period in which the results are known/materialise.
3. Revenue recognition - Revenue from sale of products is recognized
on despatch of goods to customers in accordance with the terms of
sales. Revenue from services is recognized in accordance with the
specific terms of contract on performance. Other operating revenues
comprise of income from ancillary activities incidental to the
operations of the company and is recognized when the right to receive
the income is established as per the terms of the contract.
4. Foreign currency transactions - Foreign currency transactions
(including booking/cancellation of forward contracts) are recorded at
the rates prevailing on the date of the transaction. Monetary assets
and liabilities in foreign currency, other than those covered by
forward exchange contracts, are translated at year end foreign exchange
rates. Exchange differences arising on settlements are recognized in
the Profit and Loss account. In case of forward exchange contracts
which are entered into hedge the foreign currency risk of a
receivable/payable recognized in these financial statements, premium or
discount on such contracts are amortised over the life of the contract
and exchange differences arising thereon in the reporting period are
recognised in the Profit and loss account. Forward exchange contracts
which are arranged to hedge the foreign currency rick of a firm
commitment is marked to market at the year end and the resulting
losses, if any, are charged to the Profit and loss account.
5. Employee benefits - (i) Short term employee benefit obligations are
estimated and provided for; (ii) Post employment benefits and other
long term employee benefits - (1) Company''s contribution to provident
fund, labour welfare fund, employees state insurance corporation and
other funds are determined under the relevant schemes and /or statute
and charged to revenue; (2) Company''s liability towards gratuity and
compensated absences are actuarially determined at each balance sheet
date using the projected unit credit method. Actuarial gains and losses
are recognised in revenue.
6. Fixed Assets -All costs relating to acquisition of fixed assets net
of value added tax and terminal excise duty refund under Export
Promotion Capital Goods Scheme, subject to the economic life and the
cost being in excess of certain limits, are capitalised. Expenditure
directly related and incidental to construction are capitalized upto
the date of attainment of commercial production. Interest and other
related costs, including amortised cost of borrowings attributable only
to major projects are capitalized as part of the cost of the respective
assets. In the case of Wind energy converters, cost of land on which
the converters have been erected is capitalised as cost of the said
converters. Cost of structures on leasehold land, where the estimated
useful life is more than ten years, is capitalized.
7. Depreciation/amortization - Fixed assets are depreciated/amortised
(i) over their estimated useful lives or lives derived from the rates
specified in Schedule XIV to the Companies Act, 1956, whichever is
lower; (ii) depreciation/amortization is provided forthe period the
asset is put to use, (iii) Cost of land pertaining to the Wind energy
converters is amortised in the same manner as the cost of the said
converters are depreciated. No depreciation is reckoned in the year of
disposal.
8. Impairment of assets - The carrying amount of assets are reviewed
at each balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss will be
recognised wherever the carrying amount of an asset exceeds its
estimated recoverable amount. The recoverable amount is the greater of
the asset''s net selling price and value in use. Provision for
impairment will be reviewed periodically and amended depending on
changes in circumstances.
9. Investments - Non-current investments are stated at cost. However,
provision for diminution is made to recognize a decline, other than
temporary, in the value of the investment, if any. Current investments
are valued at lower of cost and fair value.
10. Inventories - The governing principle of valuation of Inventories
(other than process waste) is the lower of cost and net realisable
value. The cost for the said purpose (i) in the case of stores and
spare parts, is the weighted average cost (net of Cenvat credit/value
added tax, if any), (ii) in the case of cotton in process and
manufactured yar n, is the cost adopting the absorption costing method,
and (iii) is without deduction of the adjustment made for power
generated through Wind energy converters and adjusted against the cost
of power purchased from state electricity board. Process waste is
valued at net realizable value. Provision is made for obsolete, slow
moving and damaged items of inventory, if any.
11. Government grants - Capital grants from government relating to
depreciable assets are treated as deferred income and disclosed as a
capital reserve and amortised over the useful life of the concerned
asset. Cenvat credit relating to capital assets acquired is treated as
capital reserve and amortised over the useful life of the concerned
assets by transfer profit and loss account and considered under
depreciation. Grants/incentives other than those mentioned above are
reckoned in the profit and loss account in the year of eligibility.
12. Amortisation of loan raising expenditure - Major revenue
expenditure incurred by way of/in connection with raising of borrowing
is amortised overthe period of the borrowings.
13. Research and development - Revenue expenditure on research and
development is charged to the profit and loss account as incurred.
Capital expenditure on research and development, where the same
represents cost of plant, machinery, equipment and other tangible
assets, if any, is given the same accounting treatment as applicable to
other capital expenditure.
14. Deferred tax - Deferred income tax charge reflects the impact of
the current period timing differences between taxable income and
accounting income, other than differences capable of getting reversed
during the ''tax holiday'' period, subject to consideration of prudence.
Where there are unabsorbed depreciation or carry forward losses,
deferred tax assets are recognised only to the extent there is virtual
certainty of realisation of such assets. Other deferred tax assets are
recognised only to the extent there is reasonable certainty of
realisation in future. Deferred tax assets/liabilities are reviewed as
at each balance sheet date based on developments during the period and
available case laws to reassess realisation/liabilities.
15. Provisions and contingencies - To recognise a provision when (i)
the company has a present obligation as a result of a past event; (ii)
it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (iii) a reliable
estimate can be made of the amount of the obligation. A disclosure of a
contingent liability is made when there is a possible obligation that
may, but probably will not, require outflow of resources. Where there
is possible obligation or a present obligation where the likelihood of
outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2012
1. Basis of preparation of financial statements - The financial
statements are prepared in accordance with the generally accepted
accounting principles including accounting standards in India under
historical cost convention except in so far as they relate to
revaluation of net assets.
All assets and liabilities have been classified as current or
non-current as per the company's normal operating cycle and other
criteria set out in the revised schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has determined its operating cycle as twelve
months for the purpose .of current and non-current classification of
assets and liabilities.
2. Use of estimates - The preparation of the financial statements in
conformity with the generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities on the date of the financial
statements, disclosure of contingent liabilities and reported amounts
of revenues and expenses for the year. Estimates are based on
historical experience, where applicable, and other assumptions that
management believes are reasonable under the circumstances. Actual
results could vary from these estimates and any such differences are
dealt with in the period in which the results are known/ materialise.
3. Revenue recognition - Revenue from sale of products is recognized
on despatch of goods to customers in accordance with the terms of
sales. Revenue from services is recognized in accordance with the
specific terms of contract on performance. Other operating revenues
comprise of income from ancillary activities incidental to the
operations of the company and is recognized when the right to receive
the income is established as per the terms of the contract.
4. Foreign currency transactions - Foreign currency transactions
(including booking/cancellation of forward contracts) are recorded at
the rates prevailing on the date of the transaction. Monetary assets
and liabilities in foreign currency, other than those covered by
forward exchange contracts, are translated at year end foreign exchange
rates. Exchange differences arising on settlements are recognized in
the Profit and Loss account. In case of forward exchange contracts
which are entered into hedge the foreign currency risk of a
receivable/payable recognized in these financial statements, premium or
discount on such contracts are amortised over the life of the contract
and exchange differences arising thereon in the reporting period are
recognised in the Profit and loss account. Forward exchange contracts
which are arranged to hedge the foreign currency risk of a firm
commitment is marked to market at the year end and the resulting
losses, if any, are charged to the Profit and loss account. *
5. Employee benefits - (i) Short term employee benefit obligations are
estimated and provided for; (ii) Post employment benefits and other
long term employee benefits - (1) Company's contribution to provident
fund, labour welfare fund, employees state insurance corporation and
other funds are determined under the relevant schemes and /or statute
and charged to revenue; (2) Company's liability towards gratuity and
compensated absences are actuariaily determined at each balance sheet
date using the projected unit credit method. Actuarial gains and losses
are recognised in revenue.
6. Fixed Assets - All costs relating to acquisition of fixed assets
net of value added tax and terminal excise duty refund under Export
Promotion Capital Goods Scheme, subject to the economic life and the
cost being in excess of certain limits, are capitalised. Expenditure
directly related and incidental to construction are capitalized upto
the date of attainment of commercial production. Interest and other
related costs, including amortised cost of borrowings attributable only
to major projects are capitalized as part of the cost of the respective
assets. In the case of Wind energy converters, cost of land on which
the converters have been erected is capitalised as cost of the said
converters. Cost of structures on leasehold land, where the estimated
useful life is more than ten years, is capitalized.
7. Depreciation/amortization - Fixed assets are depreciated/amortised
(i) over their estimated usefuliives or lives derived from the rates
specified in Schedule XIV to the Companies Act, 1956, whichever is
lower; (ii) depreciation/amortization is provided for the period the
asset is put to use,
(iii) Cost of land pertaining to the Wind energy converters is
amortised in the same manner as the cost of the said converters are
depreciated. No depreciation is reckoned in the year of disposal.
8. Impairment of assets - The carrying amount of assets are reviewed
at each balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss will be
recognised wherever the carrying amount of an asset exceeds its
estimated recoverable amount. The recoverable amount is the greater of
the asset's net selling price and value in use. Provision for
impairment will be reviewed periodically and amended depending on
changes in circumstances.
9. Investments - Non-current investments are stated at cost. However,
provision for diminution is made to recognize a decline, other than
temporary, in the value of the investment, if any. Current investments
are valued at lower of cost and fair value. '
10. Inventories - The governing principle of valuation of Inventories
(other than process waste) is the lower of cost and net realisable
value. The cost for the said purpose (i) in the case of stores and.
spare parts, is the weighted average cost (net of Cenvat credit/value
added tax, if any), (ii) in the case of cotton in process and
manufactured yarn, is the cost adopting the absorption costing method,
and (iii) is without deduction of the adjustment made for power
generated through Wind energy converters and adjusted against the cost
of power purchased from state electricity board. Process waste is
valued at net realizable value. Provision is made for obsolete, slow
moving and damaged items of inventory, if any. .
11. Government grants - Capital grants from government relating to
depreciable assets are treated as deferred income and disclosed as a
capital reserve and amortised over the useful life of the concerned
asset. Cenvat credit relating to capital assets acquired is treated as
capital reserve and amortised over the useful life of the concerned
assets by transfer profit and loss account and considered under
depreciation. Grants/incentives other than those mentioned above are
reckoned in the profit and loss account in the year of eligibility. .
12. Amortisation of loan raising expenditure - Major revenue
expenditure incurred by way of/in connection with raising of borrowing
is amortised over the period of the borrowings.
13. Research and development - Revenue expenditure on research and
development is charged to the profit and loss account as incurred.
Capital expenditure on research and development, where the same
represents cost of plant, machinery, equipment and other tangible
assets, if any, is given the same accounting treatment as applicable to
other capital expenditure.
14. Deferred tax - Deferred income tax charge reflects the impact of
the current period timing differences between taxable income and
accounting income, other than differences capable of getting reversed
during the 'tax holiday' period, subject to consideration of
prudence. Where there are unabsorbed depreciation or carry forward
losses, deferred tax assets are recognised only to the extent there is
virtual certainty of realisation of such assets. Other deferred tax
assets are recognised only to the extent there is reasonable certainty
of realisation in future. Deferred tax assets/ liabilities are reviewed
as at each balance sheet date based on developments during the period
and available case laws to reassess realisation/liabilities.
15. Provisions and contingencies - To recognise a provision when (i)
the company has a present obligation as a result of a past event; (ii)
it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (iii) a reliable
estimate can be made of the amount of the obligation. A disclosure of a
contingent liability is made when there is a possible obligation that
may, but probably will not, require outflow of resources. Where there
is possible obligation or a present obligation where the likelihood of
outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2011
1. Basis of preparation of financial statements - The financial
statements are prepared in accordance with the generally accepted
accounting principles including accounting standards in India under
historical cost convention except insofar as they relate to revaluation
of land and buildings.
2. Use of estimates - The preparation of financial statements in
conformity with the generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities on the date of the financial
statements, disclosure of contingent liabilities and reported amounts
of revenues and expenses for the year. Estimates are based on
historical experience, where applicable, and other assumptions that
management believes are reasonable under the circumstances. Actual
results could vary from these estimates and any such differences are
dealt with in the period in which the results are known/materialise.
3. Revenue recognition - Sales are recognized on dispatch to customers
and include recovery towards sales tax, textile committee cess and
export incentives. Revenue by way of, consideration receivable for sale
of goods, rendering of services or, from the use by others of
enterprise resources, and other benefits are recognised only when they
are measurable and it would not be unreasonable to expect ultimate
collection.
4. Foreign currency transactions - Foreign currency transactions
(including booking/cancellation of forward contracts) are recorded at
the rates prevailing on the date of the transaction. Monetary assets
and liabilities in foreign currency, other than those covered by
forward exchange contracts, are translated at year end foreign exchange
rates. Exchange differences arising on settlements are recognized in
the Profit and Loss account. In case of forward exchange contracts
which are entered into hedge the foreign currency risk of a
receivable/payable recognized in these financial statements, premium or
discount on such contracts are amortised over the life of the contract
and exchange differences arising thereon in the reporting period are
recognised in the Profit and loss account. Forward exchange contracts
which are arranged to hedge the foreign currency risk of a firm
commitment is marked to market at the year end and the resulting
losses, if any, are charged to the Profit and loss account.
5. Employee benefits - (i) Short term employee benefit obligations are
estimated and provided for; (ii) Post employment benefits and other
long term employee benefits - (1) Company's contribution to provident
fund, labour welfare fund, employees state insurance corporation and
other funds are determined under the relevant schemes and /or statute
and charged to revenue; (2) Company's liability towards gratuity and
compensated absences are actuarially determined at each balance sheet
date using the projected unit credit method. Actuarial gains and losses
are recognised in revenue.
6. Fixed Assets - All costs relating to acquisition of fixed assets net
of value added tax and terminal excise duty refund under Export
Promotion Capital Goods Scheme, subject to the economic life and the
cost being in excess of certain limits, are capitalised. Expenditure
directly related and incidental to construction are capitalized up to
the date of attainment of commercial production. Interest and other
related costs, including amortised cost of borrowings attributable only
to major projects are capitalized as part of the cost of the respective
assets. In the case of Wind energy converters, cost of land on which
the converters have been erected is capitalised as cost of the said
converters.
7. Depreciation/amortisation - (i) Fixed assets are depreciated over
their estimated useful lives or lives derived from the rates specified
in Schedule XIV to the Companies Act, 1956, whichever is lower; (ii)
depreciation/amortization is provided for the period the asset is put
to use, (iii) Cost of land pertaining to the Wind energy converters is
amortised in the same manner as the cost of the said converters are
depreciated. No depreciation is reckoned in the year of disposal.
8. Impairment of assets - The carrying amount of assets are reviewed at
each balance sheet date if there is any indication of impairment based
on internal/external factors. An impairment loss will be recognised
wherever the carrying amount of an asset exceeds its estimated
recoverable amount. The recoverable amount is the greater of the
asset's net selling price and value in use. Provision for impairment
will be reviewed periodically and amended depending on changes in
circumstances.
9. Investments - These are carried at cost of acquisition and related
expenses less provision for diminution other than temporary, if any.
10. Inventories - The governing principle of valuation of Inventories
(other than process waste) is the lower of cost and net realisable
value. Cost for the said purpose (i) in the case of stores and spare
parts, is the weighted average cost (net of Cenvat credit/value added
tax, if any), (ii) in the case of cotton in process and manufactured
yarn, is the cost adopting the absorption costing method, and (iii) is
without deduction of the adjustment made for power generated through
Wind energy converters and adjusted against the cost of power purchased
from state electricity board. Process waste is valued at net realizable
value. Provision is made for obsolete, slow moving and damaged items of
inventory, if any.
11. Government grants - Capital grants from government relating to
depreciable assets are treated as deferred income and disclosed as a
capital reserve and amortised over the useful life of the asset
concerned. Cenvat credit relating to capital assets acquired is treated
as capital reserve and amortised over the useful life of the assets
concerned by transfer to profit and loss account and considered under
depreciation. Grants/incentives other than those mentioned above are
reckoned in the profit and loss account in the year of eligibility.
12. Deferred revenue expenditure - Major revenue expenditure incurred by
way of/in connection with (i) planned replacement of worn out parts of
plant and equipments, and (ii) raising of borrowing, is amortised over
the estimated period the benefit from such expenditure is expected to
enure in the case of (i) and over the period of the borrowings in the
case of (ii) above.
13. Research and development - Revenue expenditure on research and
development is charged to the profit and loss account as incurred.
Capital expenditure on research and development, where the same
represents cost of plant, machinery, equipment and other tangible
assets, if any, is given the same accounting treatment as applicable to
other capital expenditure.
14. Taxation - Income tax expense comprises of current tax, deferred tax
charge or credit and fringe benefit tax. Provision for current tax is
made with reference to taxable income for the current accounting year
by applying the applicable tax rate. Deferred income tax charge
reflects the impact of the current period timing differences between
taxable income and accounting income, other than differences capable of
getting reversed during the tax holiday' period, subject to
consideration of prudence. The deferred tax charge or credit is
recognised using prevailing tax rates. Where there are unabsorbed
depreciation or carry forward losses, deferred tax assets are
recognised only to the extent there is virtual certainty of realisation
of such assets. Other deferred tax assets are recognised only to the
extent there is reasonable certainty of realisation in future.
Deferred tax assets/liabilities are reviewed as at each balance sheet
date based on developments during the period and available case laws to
reassess realisation/liabilities.
15. Provisions and contingencies - To recognise a provision when (i) the
Company has a present obligation as a result of a past event; (ii) it
is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (iii) a reliable
estimate can be made of the amount of the obligation. Disclosure of a
contingent liability is made when there is a possible obligation that
may, but probably will not, require outflow of resources. Where there
is a possible obligation or a present obligation where the likelihood
of outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2010
1 Basis of preparation of financial statements - The Financial
statements are prepared in accordance with the generally accepted
accounting principles including accounting standards in India under
historical cost convention except in.so far as they relate to
revaluation of land and buildings.
2 Use of estimates - The preparation of financial statements in
conformity with the generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities on the date of the financial
statements, disclosure of contingent liabilities and reported amounts
of revenues and expenses for the year. Estimates are based on
historical experience, where applicable, and other assumptions that
management believes are reasonable under the circumstances. Actual
results couid vary from these estimates and any such differences are
dealt with in the period in which the results are known/materialise.
3 Revenue recognition - Sales are recognized on dispatch to customers
and include recovery towards sales tax, textile committee cess and
export incentives. Revenue by way of, consideration receivable for the
sale of goods, the rendering of services or, from the use by others of
enterprise resources, and other benefits are recognised only when they
are measurable and it would not be unreasonable to expect ultimate
collection.
4 Foreign currency transactions - Foreign currency
transactions-(including booking/cancellation of forward contracts) are
recorded at the rates prevailing on the date of the transaction.
Monetary assets and liabilities in foreign currency, other than those
covered by forward exchange contracts, are translated at year end
foreign exchange rates. Exchange differences arising on settlements are
recognized in the profit and Loss account. In case of forward exchange
contracts which are entered into hedge the foreign currency risk of a
receivable/payable recognized in these financial statements, premium or
discount on such contracts are amortised over the life of the contract
and exchange differences arising thereon in the reporting period are
recognised in the Profit and loss account. Forward exchange contracts
which are arranged to hedge the foreign currency risk of a firm
commitment is marked to market at the year end and the resulting
losses, if any, are charged to the Profit and loss account.
5 Employee benefits - (!) Short term employee benefit obligations are
estimated and provided for; (ii) Post employment benefits and other
long term employee benefits - (1) Companys contribution to provident
fund, labour welfare fund, Employees State. Insurance Corporation and
other funds are determined under the relevant schemes and /or statute
and charged to revenue; (2) Companys liability towards gratuity and
compensated absences are actuarially^ determined at each balance sheet
date using the projected unit credit method. Actuarial gains and losses
are recognised in revenue.
6 Fixed Assets - All costs relating to acquisition of fixed assets net
of value added tax and terminal excise duty refund under Export
Promotion Capital Goods Scheme, subject, to the economic life and the
cost being in excess of certain limits, are capitalised. Expenditure
directly related and incidental to construction are capitalized upto
the date of attainment of commercial production. Interest and other
related costs, including amortised cost of borrowings attributable only
to major projects are capitalized as part of the cost of the respective
asset. In the case of Wind Energy Converters, cost of land on which the
Converters have been erected is capitalised as cost of the said
Converters.
7 Depreciation/amortisation - (i) Fixed assets are depreciated over
their estimated useful lives or lives derived from the rates specified
in Schedule XIV to the Companies Act, 1956, whichever is lower; {if}
depredation/amortization is provided for the period the asset is put to
use, (iii) Cost of land pertaining to the Wind Energy Converters is
amortised in the same manner as the cost of the said Converters are
depreciated. No depreciation is reckoned in the year of disposal.
8 Impairment of assets - The carrying amount of assets are reviewed at
each balance sheet date if there is any indication of impairment based
on internal/external factors. An impairment loss will be recognised
wherever the carrying amount of an asset exceeds its estimated
recoverable amount. The recoverable amount is the greater of the
assets net selling price and value in use. Provision for impairment
will be reviewed periodically and amended depending on changes in
circumstances.
9 Investments - These are carried at cost of acquisition and related
expenses less provision for diminution other than temporary, if any.
10 Inventories - The governing principle of valuation of Inventories
(other than process waste) is the lower of cost and net realisable
value. The cost for the said purpose (i) in the case of stores and
spare parts, is the weighted average cost (net of Cenvat credit/value
added tax, if any), (ii) in the case of cotton in process and
manufactured yam, is the cost adopting the absorption costing method,
and (iii) is without deduction of the adjustment made for power
generated through Wind Energy Converters and adjusted against the cost
of power purchased from state electricity board. Process waste is
valued at net realizable value. Provision is made for obsolete, slow
moving and damaged items of inventory, if any.
11 Government grants - Capital grants from government relating to
depreciable assets are treated as deferred income and disclosed as a
capital reserve and amortised over the useful life of the concerned
asset. Cenvat credit relating to capital assets acquired is treated as
capital reserve and amortised over the useful life of the concerned
asset by transfer to profit and loss account and considered under
depreciation. Grants/incentives other than those mentioned above are
reckoned in the profit and loss account in the year of eligibility.
12 Deferred revenue expenditure - Major revenue expenditure incurred by
way of/in connection with (i) planned replacement of worn out parts of
plant and equipments, and (ii) raising of borrowing, is amortised over
the estimated period the benefit from such expenditure is expected to
enure in the case of (i) and over the period of the borrowings in the
case of (ii) above.
13 Research and development - Revenue expenditure on research and
development is charged to the profit and loss account as incurred.
Capital expenditure on research and development, where the same
represents cost of plant, machinery, equipment and other tangible
assets, if any, is given the same accounting treatment as applicable to
other capital expenditure.
14 Taxation - Income tax expense comprises current tax, deferred tax
charge or credit and fringe benefit tax. Provision for current tax is
made with reference to taxable income for the current accounting year
by applying the applicable tax rate. Deferred income tax charge
reflects the impact of the current period timing differences between
taxable income and accounting income, other than differences capable of
getting reversed during the "tax holiday period, subject to
consideration of prudence. The deferred tax charge or credit is
recognised using prevailing tax rates. Where there are unabsorbed
depreciation or carry forward losses, deferred tax assets are
recognised only to the extent there is virtual certainty of realisation
of such assets. Other deferred tax assets are recognised only to the
extent there is reasonable certainty of realisation in future. Deferred
tax assets/liabilities are reviewed as at each balance sheet date based
on developments during the period and available case laws to reassess
realisation/liabilities,
15 Provisions and contingencies - To recognise a provision-when (i) the
Company has a present obligation as a result of a past event; (ii) it
is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (iii) a reliable
estimate can be made of the amount of the obligation. Disclosure of a
contingent liability is made when there is a possible obligation that
may, but probably will not, require outflow of resources. Where there
is possible obligation or a present obligation where the likelihood of
outflow of resources is remote, no provision or disclosure is made.