1. SIGNIFICANT ACCOUNTING POLICIES i) Basis of Preparation of financial Statements The inancial statements of the Company have been brpared 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"), as applicable. The financial statements have been brpared as a going concern on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. ii) Use of estimates In brparing the Company's financial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods. iii) Fixed Assets Fixed Assets are stated at cost of acquisition less accumulated debrciation. All costs including financial costs till commencement of commercial production are capitalized to the cost of qualifying assets. CENVAT credit, Grants, Foreign Exchange Fluctuation claims SHISH Licenses and EPCG claims on capital goods are accounted for by reducing the cost of capital goods. When assets are retired from active use, the same are valued at lower of Net Book Value and Net realisable Value. When assets are disposed, their cost is removed from the financial statements. The gain or loss arising on the disposal of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss for the relevant financial year. iv) Intangible Assets Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All costs, including financing costs in respect of qualifying assets till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized. Intangible assets are amortised on a straight - line basis over their estimated useful lives. A rebuttable brsumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management. When assets are retired from active use, the same are valued at lower of Net Book Value and Net realisable Value. The gain or loss arising on the disposal of an intangible asset is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognised as income or expenses in the Statement of Profit and Loss in the year or disposal. v) Debrciation Debrciation on fixed assets (excluding intangible assets) of the company is provided on straight-line method on the basis of useful life of assets as specified under Schedule II of the Companies Act, 2013 except debrciation on incremental cost arising on account of translation of foreign currency liabilities incurred for the purpose of acquiring ixed assets, which is amortized over the residual life of the respective asset. Intangible assets are amortised on a straight - line basis over their estimated useful lives. A rebuttable brsumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management. When assets are disposed or retired, their cost is removed from the financial statements. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year. vi) Impairment of Assets The Management Periodically assesses using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes an impairment loss as the excess of the carrying amount of the asset over the recoverable amount. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amounts. vii) Investments Non-Current Investments are stated at cost. Provision is only made to recognize a decline other than temporary, in the value of investments. viii) Inventories (a) Inventories are valued at the Lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make sale. Cost in respect of raw materials and Stock in Trade are determined on FIFO basis. Costs in respect of all other Inventories are computed on weighted average basis method. Finished goods and process stock include cost of conversion and other costs incurred in acquiring the inventory and bringing them to their brsent location and condition. (b) Waste is valued at estimated net realizable value. ix) Excise duty In view of the excise duty exemption route adopted by the Company from 13.07.2004 vide notification no. 30/2004 -dated 09.07.2004 of Central Excise Act, 1944 "Exemption to specified goods of public interest", the Company does not have obligation for payment of excise duty from that date. x) Revenue Recognition (a) Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of the products are transferred to the customers net of rate difference and discount given. (b) Dividend on Investment is recognized when the right to receive the payment is established. (c) Exports entitlement under the Duty Entitlement Pass Book (DEPB)/FMS scheme are recognized in the Statement of Profit and Loss Account when the right to receive credit as per the terms of scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds. (d) Subsidy under Textiles Upgradation Fund Scheme (TUFS) is recognized when there is reasonable certainty regarding the realization of the same. xi) Government Grants & Other Claims Revenue grant including subsidy / rebates, claims etc., are deducted from the related expenses. Grants relating to fixed assets are adjusted in the cost of such assets as and when the ultimate realizability of such grant etc., are established / realized. xii) Borrowing costs Borrowing costs, which are attributable to acquisition or construction of qualifying assets, are capitalized as part of cost of such assets till such assets are ready for its intended use. A qualifying asset is one, which necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. Capitalization of borrowing cost is suspended when active development is interrupted or completed. xiii) Leases Where the Company is the lessee Leases, wherein the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term. xiv) Employee beneits (a) The employee and Company make monthly fixed Contribution to Government of India Employee's Provident fund equal to a specified percentage of the covered employee's salary, Provision for the same is made in the year in which service are rendered by the employees. (b) The Liability for Gratuity to employee, which is a defined benefit plan, is determined on the basis of actuarial Valuation based on Projected Unit Credit method. Actuarial gain/Loss in respect of the same is charged to the profit and loss account. (c) Short Term benefits are recognised as an expense at the undiscounted amounts in the Statement of Profit and Loss of the year in which the related service is rendered. xv) Foreign Currency Transactions / Exchange Fluctuation (a) Monetary Transactions related to foreign currency are accounted for at the equivalent rupee converted at the rates brvailing at the time of respective transactions and outstanding in respect thereof are translated at period end rates. Exchange difference is charged to the revenue account except arising on account of conversion related to the purchase of fixed asset is adjusted therewith if initial period of buyers credit arrangements is in excess of 360 days. (b) Non-monetary foreign currency items are carried at cost. xvi) Provision for Current Tax & Deferred Tax Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or subsequently enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realized in future. xvii) Provisions and Contingencies A provision is recognized when there is a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible or brsent obligation that may, but probably will not require an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statement. xviii) Earning per Share Basic earning per share is calculated by dividing net profit after tax for the year attributable to Equity Shareholders of the company by the weighted average number of Equity Shares issued during the year. Diluted earning per share is calculated by dividing net profit attributable to equity Shareholders (after adjustment for diluted earnings) by average number of weighted equity shares outstanding during the year. The company has only One class of shares referred to as Equity shares having face value of Rs.10/-. Each Holder of One share is entitled to One vote per share. During the year ended on 31st March 2015, the company has recommended Dividend of Rs. 1/- (PY. Rs. 0.60/-) per share as distributable to its Equity Share holders. An interim dividend of Rs. 0.60/- (PY. Rs. 0.60/-) per share was declared at the meeting of the Board of Directors held on 03rd February, 2015 and the same has been paid. The Company declares and pays dividends in Indian Rupees. The Dividend recommended by the Board of Directors is subject to the approval of shareholders at the ensuing Annual General Meeting. No Shares has been reserved for issue under options or contracts/commitments for the shares/disinvestment. The figures of the brvious year have been regrouped and rearranged wherever considered necessary. Note: Previous year's figures have been shown in brackets. For, J.T. Shah & Company Chartered Accountants [FRN: 109616W] For and on Behalf of the Board Vedprakash D. Chiripal Brijmohan D. Chiripal [Chairman] [Managing Director] [DIN:00290454] [DIN:00290426] J.T. Shah Partner [M.No. 3983] Sanjay J. Agrawal [Chief Financial Officer] Purvee D. Roy [Company Secretary] Place : Ahmedabad Date: 29/05/2015 |