Mar 31, 2016
A. BASIS OF ACCOUNTING
These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, including the accounting standards notified under the relevant provisions of the Companies Act, 2013.
B. RECOGNITION OF INCOME AND EXPENDITURE:
(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.
(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.
D. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes.
b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.
d. Intangible Assets are stated at cost of acquisition less accumulated amortization.
E. DEPRECIATION
Tangible Assets
a. Depreciation on fixed Assets is charged as follows :
i) Depreciation on Fixed assets is provided base on useful life of assets as prescribed by schedule II to the companies Act 2013 or reassessed based on management evaluation . In case of following assets useful life is different than those prescribed in schedule II to The Companies Act,2013.
The useful life of those assets are as follows
b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
F. INVESTMENT
Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.
G. INVENTORIES
a. Finished goods are valued at cost or net realizable whichever is lower.
b. Work in progress valued at cost. Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.
c. Raw materials for weaving, shirting and fabric division is valued at cost following FIFO Method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realizable value.
d. Sample fabric purchases, are charged to profit and loss account in the year of purchase.
H. FOREIGN CURRENCY TRANSACTION
a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.
c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Profit or loss on cancellations/renewals of forward contracts is recognized during the year.
I. EMPLOYEE BENEFITS:
a. Defined Contribution Plan:
Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognized fund.
b. Defined Benefit Plan:
Company''s Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in Profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other pension plans/ schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.
J. BORROWING COST:
Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.
K. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.
L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Contingent Liabilities are not recognized, but disclosed in the case of,
a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.
b) A possible obligation, when the probability of outflow of resources is reasonably certain.
Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.
M. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.
b. Deferred Tax: Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.
N. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in previous periods.
Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit''s selling price and the value in use.
(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)
Mar 31, 2015
A. BASIS OF ACCOUNTING
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, including
the accounting standards notified under the relevant provisions of the
Companies Act, 2013.
B. RECOGNITION OF INCOME AND EXPENDITURE:
(i) Revenues/Income and costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
(ii) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognized in the period in which the results
are known / materialized.
D. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes.
b. Incidental expenditure including interest on loans during
construction period is capitalized up to the date of attainment of
commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/debited respectively to profit and
loss account.
d. Intangible Assets are stated at cost of acquisition less
accumulated amortization.
E. DEPRECIATION
Tangible Assets
a. Depreciation on fixed Assets is charged as follows :
i) Depreciation on Fixed assets is provided base on useful life of
assets as prescribed by schedule II to the companies Act 2013 or
reassessed based on management evaluation . In case of following assets
useful life is different than those prescribed in schedule II to The
Companies Act,2013.
The useful life of those assets are as follows
F. INVESTMENT
Investments are classified into Current and Long-term Investments.
Current Investments are stated at lower of cost and fair value.
Long-term Investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary in the value of
Long-term Investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline, other than temporary.
G. INVENTORIES
a. Finished goods are valued at cost or net realizable whichever is
lower.
b. Work in progress valued at cost. Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following FIFO Method. The stock of auxiliary material for
process division is valued at landed cost on FIFO basis. The stock of
Raw materials and auxiliary material for export division is valued at
standard cost with appropriate application of variances to the stock of
raw materials. The damaged, unserviceable and inert raw materials are
valued at net realizable value.
d. Sample fabric purchases, are charged to profit and loss account in
the year of purchase.
H. FOREIGN CURRENCY TRANSACTION
a. All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the profit & loss account.
c. In respect of Forward Exchange contracts entered into to hedge
foreign currency risks, the difference between the forward rate and
exchange rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
differences arising on such contracts are recognized as income or
expenses along with the exchange differences on the underlying
assets/liabilities on the reporting date. Profit or loss on
cancellations/renewals of forward contracts is recognized during the
year.
I. EMPLOYEE BENEFITS:
a. Defined Contribution Plan:
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognized fund.
b. Defined Benefit Plan:
Company's Liabilities towards defined benefit scheme is determined
using the project unit credit method. Actuarial valuation under
projected unit credit method is carried out at balance sheet date.
Actuarial gains/losses are recognized in Profit & Loss Account in the
period of occurrence of such gains & losses. Gratuity scheme for
certain class of employees is administered through trust and the trust
funds are managed under the employee gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes. All the unused leaves outstanding as on 31st
March gets lapsed and does not get accumulated.
J. BORROWING COST:
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
K. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit &
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalized to respective projects.
L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Contingent Liabilities are not recognized, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognized, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
M. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax
payable method based on the liability as computed after taking credit
for allowances and exemptions. Current Tax provided for the year is
also net of MAT Credit available under the I.T Act.
b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting
for Taxes on Income becoming mandatory effective from 1st April,2002,
the differences that result between the profit offered for income tax
and the profit as per financial statements are identified and
thereafter a deferred tax asset or deferred tax liability is recorded
for timing differences, namely the differences that originate in one
accounting period and reverse in another, based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accumulated timing differences at the end of an accounting period,
based on prevailing enacted regulations.
N. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in
previous periods. Impairment loss is recognized when the carrying
amount of an asset exceeds its recoverable amount. Recoverable amount
is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating unit's selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its deposal at
the end of its useful life).
Mar 31, 2014
A. BASIS OF ACCOUNTING
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standards notified under section 211 (3C) and the
other relevant provisions of the Companies Act, 1956.
All the 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 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 equivalent the Company has
ascertained its operating cycle to be less than 12 month.
B. RECOGNITION OF INCOME AND EXPENDITURE:
(i) Revenues/Income and costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
(ii) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognized in the period in which the results
are known/materialised.
D. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10 % capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalized up to the date of attainment of
commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/debited respectively to profit and
loss account.
d. Intangible Assets are stated at cost of acquisition less
accumulated amortization.
E. DEPRECIATION
a. Depreciation on fixed Assets is charged as follows :
i) Premium on leasehold land is amortised in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortised at the
depreciation rate applicable to factory building under the Companies
Act, 1956.
iii) Depreciation on Factory Buildings, Plant and Machinery, Electrical
Installations, Vehicles, Computers, Furniture & Fixture and Equipment
is provided on the straight Line method (S.L.M.) in accordance with the
provisions of Section 205 (2)(b) of the Companies Act, 1956.
iv) Computer Software is amortised over a period of five years.
Amortisation is done on straight line basis.
b. On additions to the fixed assets made during the year, depreciation
is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
F. INVESTMENT
Investments are classified into Current and Long-term Investments.
Current Investments are stated at lower of cost and fair value.
Long-term Investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary in the value of
Long-term Investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline, other than temporary.
G. INVENTORIES
a. Finished goods are valued at cost or net realisable whichever is
lower. The cost of finished goods is arrived after deducting estimated
margin from the selling price of the goods.
b. Work in progress valued at cost. Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following specific identification method. The stock of
auxiliary material for process division is valued at landed cost on
FIFO basis. The stock of Raw materials and auxiliary material for
export division is valued at standard cost with appropriate application
of variances to the stock of raw materials. The damaged, unserviceable
and inert raw materials are valued at net realisable value.
d. Stores and Spares and sample fabric purchases, are charged to
profit and loss account in the year of purchase.
H. FOREIGN CURRENCY TRANSACTION
a. All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the profit & loss account.
c. In respect of Forward Exchange contracts entered into to hedge
foreign currency risks, the difference between the forward rate and
exchange rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
differences arising on such contracts are recognized as income or
expenses along with the exchange differences on the underlying
assets/liabilities on the reporting date. Further, in case of other
contracts with committed exchange rates, the underlying is accounted at
the rate so committed. Profit or loss on cancellations/renewals of
forward contracts is recognized during the year.
I. EMPLOYEE BENEFITS:
a. Defined Contribution Plan:
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognised fund.
b. Defined Benefit Plan:
Company''s Liabilities towards defined benefit scheme is determined
using the project unit credit method. Actuarial valuation under
projected unit credit method is carried out at balance sheet date.
Actuarial gains/losses are recognized in Profit & Loss Account in the
period of occurrence of such gains & losses. Gratuity scheme for
certain class of employees is administered through trust and the trust
funds are managed under the Employee Gratuity Scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes. All the unused leaves outstanding as on 31st
March gets lapsed and does not get accumulated.
J. BORROWING COST:
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
K. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit &
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalized to respective projects.
L. GOVERNMENT GRANTS:
Grants in the nature of interest subsidy under the Technology
Upgradation Fund Scheme (TUFS) and capital subsidy on processing and
garmenting machinery are accounted for when it is reasonably certain
that ultimate collection will be made.
M. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Contingent Liabilities are not recognized, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognised, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance Sheet date.
N. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax
payable method based on the liability as computed after taking credit
for allowances and exemptions. Current Tax provided for the year is
also net of MAT Credit available under the IT Act.
b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting
for Taxes on Income becoming mandatory effective from 1st April,2002,
the differences that result between the profit offered for income tax
and the profit as per financial statements are identified and
thereafter a deferred tax asset or deferred tax liability is recorded
for timing differences, namely the differences that originate in one
accounting period and reverse in another, based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accumulated timing differences at the end of an accounting period,
based on prevailing enacted regulations.
0. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating unit''s selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its deposal at
the end of its useful life)
Mar 31, 2013
A. BASIS OF ACCOUNTING
These fnancial statements have been prepared on an accrual basis and
under historical cost convention and in compliance'' in all material
aspects'' with the applicable accounting principles in India'' the
applicable accounting standards notifed under section 211 (3C) and the
other relevant provisions of the Companies Act'' 1956.
All the assets and liabilities have been classifed as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in 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 realisation in cash equivalent the Company has
ascertained its operating cycle to be less than 12 month.
B. RECOGNITION OF INCOME AND EXPENDITURE:
(i) Revenues/Income and costs/Expenditure are generally accounted on
accrual'' as they are earned or incurred.
(ii) Sale of Goods is recognised on transfer of signifcant risks and
rewards of ownership which is generally on the dispatch of goods.
C. USE OF ESTIMATES:
The preparation of fnancial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the fnancial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialised.
D. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost'' which includes
duties and other identifable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10% capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalised up to the date of attainment of
commercial production.
c. Proft/ Loss on the sale of fxed assets is accounted for in the
Proft and Loss Account and credited/debited respectively to proft and
loss account.
d. Intangible Assets are stated at cost of acquisition less
accumulated amortisation.
E. DEPRECIATION
a. Depreciation on fxed Assets is charged as follows
i) Premium on leasehold land is amortised in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortised at the
depreciation rate applicable to factory building under the Companies
Act'' 1956.
iii) Depreciation on Factory Buildings'' Plant and Machinery'' Electrical
Installations'' Vehicles'' Computers'' Furniture & Fixture and Equipment
is provided on the straight Line method (S.L.M.) in accordance with the
provisions of Section 205 (2)(b) of the Companies Act'' 1956.
iv) Computer Software is amortised over a period of fve years.
Amortisation is done on straight line basis.
b. On additions to the fxed assets made during the year'' depreciation
is provided on pro-rata basis'' with reference to the date of addition.
c. On deletion or sale of assets'' no depreciation is provided.
F. INVESTMENT
Investments are classifed into Current and Long-term Investments.
Current Investments are stated at lower of cost and fair value.
Long-term Investments are stated at cost. A provision for diminution is
made to recognise a decline'' other than temporary in the value of
Long-term Investments. However'' fxed income long term securities are
stated at cost'' less amortisation of premium/discount and provision for
diminution to recognise a decline'' other than temporary.
G. INVENTORIES
a. Finished goods are valued at cost or net realisable whichever is
lower. The cost of fnished goods is arrived after deducting estimated
margin from the selling price of the goods.
b. Work in progress valued at cost .Cost comprises all cost of
materials'' cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving'' shirting and fabric division is valued
at cost following specifc identifcation method. The stock of auxiliary
material for process division is valued at landed cost on FIFO basis.
The stock of Raw materials and auxiliary material for export division
is valued at standard cost with appropriate application of variances to
the stock of raw materials. The damaged'' unserviceable and inert raw
materials are valued at net realisable value.
d. Stores and Spares and sample fabric purchases'' are charged to proft
and loss account in the year of purchase.
e. Stock of unsold fats is valued at cost.
H. FOREIGN CURRENCY TRANSACTION
a. All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the proft & loss account.
c. In respect of Forward Exchange contracts entered into to hedge
foreign currency risks'' the difference between the forward rate and
exchange rate at the inception of the contract is recognised as income
or expense over the life of the contract. Further'' the exchange
differences arising on such contracts are recognised as income or
expenses along with the exchange differences on the underlying
assets/liabilities on the reporting date. Further'' in case of other
contracts with committed exchange rates'' the underlying is accounted at
the rate so committed. Proft or loss on cancellations/renewals of
forward contracts is recognised during the year.
I. EMPLOYEE BENEFITS:
a. Defned Contribution Plan:
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognised fund.
b. Defned Beneft Plan:
Company''s Liabilities towards defned beneft scheme is determined using
the project unit credit method. Actuarial valuation under projected
unit credit method is carried out at balance sheet date. Actuarial
gains/losses are recognised in proft & Loss Account in the period of
occurrence of such gains & losses. Gratuity scheme for certain class of
employees is administered through trust and the trust funds are managed
under the employee gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes. All the unused leaves outstanding as on 31st
March gets lapsed and does not get accumulated.
J. BORROWING COST:
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fxed assets are capitalised upto the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
K. OPERATIONAL LEASE:
Operational lease payments are recognised as an expense in Proft & Loss
accounts on accrual basis. Lease payments relating to project under
development are capitalised to respective projects.
L. GOVERNMENT GRANTS:
Grants in the nature of interest subsidy under the Technology
Upgradation Fund Scheme (TUFS) and capital subsidy on processing and
garmenting machinery are accounted for when it is reasonably certain
that ultimate collection will be made.
M. PROVISION'' CONTINGENT LIABILITIES AND CONTINGENT ASSETS: Contingent
Liabilities are not recognised'' but disclosed in the case of''
a) A present obligation arising from a past event'' when it is not
probable that an outfow of resources will be required to settle the
obligation.
b) A possible obligation'' when the probability of outfow of resources
is reasonably certain.
Contingent Assets are neither recognised'' nor disclosed. Provisions''
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
N. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax
payable method based on the liability as computed after taking credit
for allowances and exemptions. Current Tax provided for the year is
also net of MAT Credit available under the I.T Act.
b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting
for Taxes on Income becoming mandatory effective from 1st April'' 2002''
the differences that result between the proft offered for income tax
and the proft as per fnancial statements are identifed and thereafter a
deferred tax asset or deferred tax liability is recorded for timing
differences'' namely the differences that originate in one accounting
period and reverse in another'' based on the tax effect of the aggregate
amount being considered. The tax effect is calculated on the
accumulated timing differences at the end of an accounting period''
based on prevailing enacted regulations.
O. IMPAIRMENT OF ASSETS
As at each Balance Sheet date'' the carrying amount of assets is tested
for impairment so as to determine''
a) The provision for impairment loss'' if any required or''
b) The reversal'' if any'' required of impairment loss recognised in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is determined''
a) In the case of an individual asset'' at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit'' (a group of assets that
generates identifed independent cash fows)'' at the higher of the cash
generating unit''s selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash fows from the continuing use of an asset and from its deposal at
the end of its useful life)
Mar 31, 2012
A. BASIS OF ACCOUNTING
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standards notified under section 211 (3C) and the
other relevant provisions of the Companies Act, 1956.
All the 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 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 equivalent the Company has
ascertained its operating cycle to be less than 12 month.
B. RECOGNITION OF INCOME AND EXPENDITURE:
(i) Revenues/Income and costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
(ii) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognized in the period in which the results
are known/materialized.
D. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10 % capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalized up to the date of attainment of
commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/ debited respectively to profit
and loss account.
d. Intangible Assets are stated at cost of acquisition less
accumulated amortization.
E. DEPRECIATION
a. Depreciation on fixed Assets is charged as follows :
i) Premium on leasehold land is amortized in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortized at the
depreciation rate applicable to factory building under the Companies
Act, 1956.
iii) Depreciation on Factory Buildings, Plant and Machinery, Electrical
Installations, Vehicles, Computers, Furniture & Fixture and Equipment
is provided on the straight Line method (S.L.M.) in accordance with the
provisions of Section 205 (2)(b) of the Companies Act, 1956.
iv) Computer Software is amortized over a period of five years.
Amortization is done on straight line basis.
b. On additions to the fixed assets made during the year, depreciation
is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
F. INVESTMENT
Investments are classified into Current and Long-term Investments.
Current Investments are stated at lower of cost and fair value.
Long-term Investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary in the value of
Long-term Investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline, other than temporary.
G. INVENTORIES
a. Finished goods are valued at cost or net realizable whichever is
lower. The cost of finished goods is arrived after deducting estimated
margin from the selling price of the goods.
b. Work in progress valued at cost .Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following specific identification method. The stock of
auxiliary material for process division is valued at landed cost on
FIFO basis.
The stock of Raw materials and auxiliary material for export division
is valued at standard cost with appropriate application of variances to
the stock of raw materials. The damaged, unserviceable and inert raw
materials are valued at net realizable value.
d. Stores and Spares and sample fabric purchases, are charged to
profit and loss account in the year of purchase.
e. Stock of unsold flats is valued at cost.
H. FOREIGN CURRENCY TRANSACTION
a. All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the profit & loss account.
c. In respect of Forward Exchange contracts entered into to hedge
foreign currency risks, the difference between the forward rate and
exchange rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
differences arising on such contracts are recognized as income or
expenses along with the exchange differences on the underlying assets/
liabilities on the reporting date. Further, in case of other contracts
with committed exchange rates, the underlying is accounted at the rate
so committed. Profit or loss on cancellations/renewals of forward
contracts is recognized during the year.
I. EMPLOYEE BENEFITS:
a. Defined Contribution Plan:
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognized fund.
b. Defined Benefit Plan:
Company's Liabilities towards defined benefit scheme is determined
using the project unit credit method. Actuarial valuation under
projected unit credit method is carried out at balance sheet date.
Actuarial gains/losses are recognized in profit & Loss Account in the
period of occurrence of such gains & losses. Gratuity scheme for
certain class of employees is administered through trust and the trust
funds are managed under the employee gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes. All the unused leaves outstanding as on 31st
March gets lapsed and does not get accumulated.
J. BORROWING COST:
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
K. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit &
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalized to respective projects.
L. GOVERNMENT GRANTS:
Grants in the nature of interest subsidy under the Technology
Up gradation Fund Scheme (TUFS) and capital subsidy on processing and
garmenting machinery are accounted for when it is reasonably certain
that ultimate collection will be made.
M. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Contingent Liabilities are not recognized, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognized, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
N. INCOME TAX
a. Current Tax: Provision is made for Income tax under the tax payable
method based on the liability as computed after taking credit for
allowances and exemptions. Current Tax provided for the year is also
net of MAT Credit available under the I.T Act.
b. Deferred Tax: Consequent to the Accounting Standard 22- Accounting
for Taxes on Income becoming mandatory effective from 1st April, 2002,
the differences that result between the profit offered for income tax
and the profit as per financial statements are identified and
thereafter a deferred tax asset or deferred tax liability is recorded
for timing differences, namely the differences that originate in one
accounting period and reverse in another, based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accumulated timing differences at the end of an accounting period,
based on prevailing enacted regulations.
O. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in
previous periods.
Impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating unit's selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its deposal at
the end of its useful life)
Mar 31, 2011
A. Basis Of Accounting
The financial statements are prepared as a going concern under
historical cost convention on an accrual basis except, those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles, reasonable estimates and
assumptions and prudent commercial practices.
B. Fixed Assets
a. The Gross Block of Fixed asset is recorded at cost, which includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10% capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalised up to the date of attainment of
commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/debited respectively to Profit and
Loss Account.
C. INTANGIBLE ASSETS
a. Intangible Assets are stated at cost of acquisition less
accumulated amortization. Computer
Software is amortised over a period of five years. Amortisation is done
on straight line basis.
D. DEPRECIATION
a. Depreciation on Fixed Assets is charged as follows :
i) Premium on leasehold land is amortised in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortised at the
depreciation rate applicable to factory building under the Companies
Act, 1956.
ii) Dyeing, Weaving, Shirting, Garment & Export Divisions-on Straight
Line Method.
iii) Fabric Division - on Written Down value Method.
b. On additions to the fixed assets made during the year, depreciation
is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
E. BORROWING COST
Interest and other cost in connection with the borrowing of funds to
the extent related/attributed to the acquisition /construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
F. INVESTMENTS
Long term investments are valued at cost. Any decline other than
temporary, in the value of long term investments is adjusted in the
carrying value of such investments.
Current Investment are carried at Cost or Fair Market Value whichever
is lower.
G. INVENTORIES
a. Finished goods are valued at cost or market value whichever is
lower. The cost of finished goods is arrived after deducting estimated
margin from the selling price of the goods.
b. Work in progress valued at cost .Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following specific identification method. The stock of
auxiliary material for process division is valued at landed cost on
FIFO basis. The stock of Raw materials and auxiliary material for
export division is valued at standard cost with appropriate application
of variances to the stock of raw materials. The damaged, unserviceable
and inert raw materials are valued at net realisable value.
d. Stores and Spares and sample fabric purchases, are charged to
Profit and Profit account in the year of purchase.
e. Stock of unsold flats is valued at cost.
H. SALES AND PURCHASES
a. Sales include sale of raw materials, semi-finished goods and
finished goods. Sales also include Processing charges, Garment
Stitching charges, Sample charges, Duty Drawback received and Export
entitlement received.
b. Value Added Tax (VAT) collected is shown as liability and netted
off against VAT refund.
c. Sales and purchases are accounted net of cash discount, returns,
rebate, etc.
d. Purchases also include custom duty paid on raw material imports.
e. Export sales are accounted on CIF value or FOB value basis
depending on the terms of sale.
f. Export sales of samples are accounted on realisation basis.
g. Export Incentives like DEPB license or Duty Drawback available on
exports are recognised on accrual basis in the year of exports.
I. EXPENSES
All material known liabilities are provided for on the basis of
available information/estimates.
J. FOREIGN CURRENCY TRANSACTION
a. Export sales are recorded at the exchange rate prevailing on the
date of the transaction. Purchases & other expenditure in foreign
currencies is accounted at the exchange rate prevailing on the date the
transactions are recorded in the books of the Company.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the Profit and Loss account.
c. Premium receivable / payable on forward contracts is shown as
Current Assets / Liabilities. Premium income / expense is amortised
over the period of contract and the unamortised premium is shown under
Current Liabilities / Assets.
d. Paris office transactions are accounted at the exchange rate
prevailing at the time of payment.
K. CAPITAL ISSUE EXPENSES
'Miscellaneous Expenditure' representing share issue expenses amounting
to Rs. 8,20,77,682/- adjusted against the Securities Premium Account.
(Previous Year Rs. 2,67,99,077/-)
L EMPLOYEE BENEFITS
a. Defined Contribution Plan
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognised fund.
b. Defined Benefit Plan
Company's Liabilities towards defined benefit scheme is determined
using the project unit credit method. Actuarial valuation under
projected unit credit method is carried out at balance sheet date.
Actuarial gains/losses are recognised in Profit and Loss Account in the
period of occurrence of such gains & losses. Gratuity scheme for
certain class of employees is administered through trust and the trust
funds are managed under the employee gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes.
All the unused leaves outstanding as on 31st March gets lapsed and does
not get accumulated.
M. OPERATIONAL LEASE:
Operational lease payments are recognised as an expense in Profit and
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalised to respective projects.
N. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax
payable method based on the liability as computed after taking credit
for allowances and exemptions. Current Tax provided for the year is
also net of MAT Credit available under the IT Act.
b. Deferred Tax : Consequent to the Accounting Standard 22-Accounting
for Taxes on Income becoming mandatory effective from 1st April, 2002,
the differences that result between the profit offered for income tax
and the profit as per financial statements are identified and
thereafter
a deferred tax asset or deferred tax liability is recorded for timing
differences, namely the differences that originate in one accounting
period and reverse in another, based on the tax effect of the aggregate
amount being considered. The tax effect is calculated on the
accumulated timing differences at the end of an accounting period,
based on prevailing enacted regulations.
O. GOVERNMENT GRANTS
Grants in the nature of interest subsidy under the Technology
Upgradation Fund Scheme (TUFS) and capital subsidy on processing and
garmenting machinery are accounted for when it is reasonably certain
that ultimate collection will be made.
P. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognised in
previous periods. Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating unit's selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its deposal at
the end of its useful life)
Q. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities are not recognised, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognised, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
Mar 31, 2010
A. BASIS OF ACCOUNTING
The financial statements are prepared as a going concern under
historical cost convention on an accrual basis except, those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles, reasonable estimates and
assumptions and prudent commercial practices.
B. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10 % capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalized up to the date of attainment of
commercial production.
c. Profit/ Loss on the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/debited respectively to profit and
loss account.
C. INTANGIBLE ASSETS
a. Intangible Assets are stated at cost of acquisition less accumulated
amortization. Computer Software is amortised over a period of five
years. Amortisation is done on straight line basis.
D. DEPRECIATION
a. Depreciation on fixed Assets is charged as follows :
i) Premium on leasehold land is amortised in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortised at the
depreciation rate applicable to factory building under the Companies
Act, 1956.
ii) Dyeing, Weaving, Shirting, Garment & Export Divisions - on Straight
Line Method.
iii) Fabric Division - on Written Down value Method.
b. On additions to the fixed assets made during the year, depreciation
is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
E. BORROWING COST
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for its intended use and all other borrowings cost are
charged to revenue.
F. INVESTMENTS
Long term investments are valued at cost. Any decline other than
temporary, in the value of long term investments is adjusted in the
carrying value of such investments.
G. INVENTORIES
a. Finished goods (other than finished fabrics) are valued at cost or
market value which ever is lower. The cost of finished fabrics is
arrived after deducting estimated margin from the selling price of the
goods.
b. Work in progress valued at cost .Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following specific identification method. The stock of
auxiliary material for process division is valued at landed cost on
FIFO basis. The stock of Raw materials and auxiliary material for
export division is valued at standard cost with appropriate application
of variances to the stock of raw materials. The damaged, unserviceable
and inert raw materials are valued at net realisable value.
d. Stores and Spares and sample fabric purchases, are charged to
profit and loss account in the year of purchase.
e. Stock of unsold flats is valued at cost. H. SALES AND PURCHASES
a. Sales include sale of raw materials, semi-finished goods and
finished goods. Sales also include Processing charges, Garment
Stitching charges, Sample charges and Duty Drawback received.
b. Value Added Tax (VAT) collected is shown as liability and netted
off against VAT refund.
c. Sales and purchases are accounted net of cash discount, returns,
rebate, etc.
d. Purchases also include custom duty paid on raw material imports.
e. Export sales are accounted on CIF value or FOB value basis
depending on the terms of sale.
f. Export sales of samples are accounted on realisation basis.
g. Export Incentives like DEPB license or Duty Drawback available on
exports are recognised on accrual basis in the year of exports.
I. EXPENSES
All material known liabilities are provided for on the basis of
available information/ estimates.
J. FOREIGN CURRENCY TRANSACTION
a. Export soles are recorded at the exchange rate prevailing on the
date of the transaction. Purchases & other expenditure in foreign
currencies is accounted at the exchange rate prevailing on the date the
transactions are recorded in the books of the company.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the profit & loss account.
c. Premium receivable / payable on forward contracts is shown as
Current Assets / Liabilities. Premium income / expense is amortised
over the period of contract and the unamortised premium is shown under
Current Liabilities / Assets.
d. Paris office transactions are accounted at the exchange rate
prevailing at the time of payment.
K. CAPITAL ISSUE EXPENSES
Miscellaneous Expenditure representing share issue expenses amounting
to Rs. 2,67,99,077/- adjusted against the Securities Premium Account.
L. EMPLOYEE BENEFITS:
a. Defined Contribution Plan
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognised fund.
b. Defined Benefit Plan
The Company has Defined Benefit Plan for gratuity for all the
employees, the liability for which is determined on the basis of
an actuarial valuation at the year end and incremental liability, if
any, is provided for in the books. Gratuity scheme is administered
through trust and the trust funds are managed under the employee
gratuity scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes.
M. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit &
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalized to respective projects.
N. INCOME TAX
a. Current Tax: Provision is made for Income tax under the tax payable
method based on the liability as computed after taking credit for
allowances and exemptions. Current Tax provided for the year is also
net of MAT Credit available under the I.T Act.
b. Deferred Tax æ. Consequent to the Accounting Standard 22-
Accounting for Taxes on Income becoming mandatory effective from 1st
April,2002, the differences that result between the profit offered for
income tax and the profit as per financial statements are identified
and thereafter a deferred tax asset or deferred tax liability is
recorded for timing differences, namely the differences that originate
in one accounting period and reverse in another, based on the tax
effect of the aggregate amount being considered. The tax effect is
calculated on the accumulated timing differences at the end of an
accounting period, based on prevailing enacted regulations.
0. GOVERNMENT GRANTS
Grants in the nature of interest subsidy under the Technology
Upgradation Fund Scheme (TUFS) and capital subsidy on processing
machinery are accounted for when it is reasonably certain that ultimate
collection will be made.
R IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount.
Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating units selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its deposal at
the end of its useful life)
Q. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities are not recognized, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognised, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
Mar 31, 2009
A. BASIS OF ACCOUNTING
The financial statements are prepared as a going concern under
historical cost convention on an accrual basis except, those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles, reasonable estimates and
assumptions and prudent commercial practices.
B. FIXED ASSETS
a. The Gross Block of Fixed asset is recorded at cost, which, includes
duties and other identifiable direct expenses up to the date of
commissioning of the assets and wherever applicable is net of credits
available under CENVAT and VAT schemes and 10 % capital subsidy granted
by the Central Government on processing and garmenting machinery.
b. Incidental expenditure including interest on loans during
construction period is capitalized up to the date of attainment of
commercial production.
c. Profit/Loss On the sale of fixed assets is accounted for in the
Profit and Loss Account and credited/debited respectively to profit and
loss account.
C. INTANGIBLE ASSETS
a. Intangible Assets are stated at cost of acquisition less accumulated
amortization. Computer Software is amortised over a period of five
years. Amortisation is done on straight line basis.
D. DEPRECIATION
a. Depreciation on fixed Assets is charged as follows :
i) Premium on leasehold land is amortised in equal installments over
the period of the lease.
ii) Capital expenditure on rented premises is amortised at the
depreciation rate applicable to factory building under the Companies
Act, 1956.
ii) Dyeing, Weaving, Shirting, Garment & Export Divisions - on Straight
Line Method.
iii) Fabric Division - on Written Down value Method.
b. On additions to the fixed assets made during the year, depreciation
is provided on pro-rata basis, with reference to the date of addition.
c. On deletion or sale of assets, no depreciation is provided.
E. BORROWING COST
Interest and other cost in connection with the borrowing of funds to
the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for its intended use and all other borrowings cost are to
revenue.
F. INVESTMENTS
Long term investments are valued at cost. Any decline other than
temporary, in the value of long term investments is adjusted in the
carrying value of such investments.
G. INVENTORIES
a. Finished goods (other than finished fabrics) are valued at cost or
market value which ever is lower. The cost of finished fabrics is
arrived after deducting estimated margin from the selling price of the
goods.
b. Work in progress valued at cost .Cost comprises all cost of
materials, cost of conversion and any other cost incurred in the
production process.
c. Raw materials for weaving, shirting and fabric division is valued
at cost following specific identification method. The stock of
auxiliary material for process division is valued at landed cost on
FIFO basis. The stock of Raw materials and auxiliary material for
export division is valued at standard cost with appropriate application
of variances to the stock of raw materials. The damaged, unserviceable
and inert raw materials are valued at net realisable value.
d. Stores and Spares and sample fabric purchases, are charged to
profit and loss account in. the year of purchase.
m Stoolt of unsold flats is valued at cost_
H. SALES AND PURCHASES
a. Sales include sale of raw materials, semi-finished goods and
finished goods. Sales also include Processing charges, Garment
Stitching charges, Sample charges and Duty Drawback received.
b. Value Added Tax (VAT) collected is shown as liability and netted
off against VAT refund.
c. Sales and purchases are accounted net of cash discount, returns,
rebate, etc.
d. Purchases also include custom duty paid on raw material imports.
e. Export sales are accounted on CIF value or FOB value basis
depending on the terms of sale.
f. Export sales of samples are accounted on realisation basis.
g. Export Incentives like DEPB license or Duty Drawback available on
exports are recognised on accrual basis in the year of exports.
I. EXPENSES
All material known liabilities are provided for on the basis of
available information/ estimates.
J. FOREIGN CURRENCY TRANSACTION
a. Export sales are recorded at the exchange rate.prevailing on the
date of the transaction. Purchases & other expenditure in foreign
currencies is accounted at the exchange rate prevailing on the date the
transactions are recorded in the books of the company.
b. Monetary items denominated in foreign currency are restated at the
exchange rate prevailing at the year-end and the overall net gain /
loss is adjusted to the profit & loss account.
c. Premium receivable / payable on forward contracts is shown as
Current Assets / Liabilities. Premium income / expense is amortised
over the period of contract and the unamortised premium is shown under
Current Liabilities / Assets.
d. Paris office transactions are accounted at the exchange rate
prevailing at the time of payment.
K. EMPLOYEE BENEFITS:
a. Defined Contribution Plan
Contribution to provident fund is accounted on accrual basis with
corresponding contribution to recognised fund.
b. Defined Benefit Plan
The Company has Defined Benefit Plan for gratuity for all the
employees, the liability for which is determined on the basis of an
actuarial valuation at the year end and incremental liability, if any,
is provided for in the books. Gratuity scheme is administered through
trust and the trust funds are managed under the employee gratuity
scheme of LIC.
c. Company does not have any policy for Leave Encashment or any other
pension plans/schemes.
L. OPERATIONAL LEASE:
Operational lease payments are recognized as an expense in Profit &
Loss accounts on accrual basis. Lease payments relating to project
under development are capitalized to respective projects. .
M. INCOME TAX
a. Current Tax : Provision is made for Income tax under the tax
payable method based on the liability as computed after taking credit
for allowances and exemptions. Current Tax provided, for the year is
also net of MAT Credit available under the I.T Act.
b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting
for Taxes on Income becoming mandatory effective from 1st April,2002,
the differences that result between the profit offered for income tax
and the profit as per financial statements are identified and
thereafter a deferred tax asset or deferred tax liability is recorded
for timing differences, namely the differences that originate in one
accounting period and reverse in another, based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accumulated timing differences at the end of an accounting period,
based on prevailing enacted regulations.
N. GOVERNMENT GRANTS
Grants in the nature of interest subsidy under the Technology
Upgradation Fund Scheme (TUFS) and capital subsidy on processing
machinery are accounted for when it is reasonably certain that ultimate
collection will be made.
0. IMPAIRMENT OF ASSETS
As at each Balance Sheet date, the carrying amount of assets is tested
for impairment so as to determine,
a) The provision for impairment loss, if any required or,
b) The reversal, if any, required of impairment loss recognized in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount.
Recoverable amount is determined,
a) In the case of an individual asset, at the higher of the net selling
price and the value in use.
b) In the case of a cash-generating unit, (a group of assets that
generates identified independent cash flows), at the higher of the cash
generating units selling price and the value in use. (Value in use is
determined as the present value of estimated future cash the continuing
use of an asset and from its deposal at the end of its useful life)
P. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities are not recognized, but disclosed in the case
of,
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, when the probability of outflow of resources
is reasonably certain.
Contingent Assets are neither recognised, nor disclosed. Provisions,
Contingent Liabilities and Contingent Assets are reviewed at each
Balance sheet date.
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