NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016 Note 1 COMPANY OVERVIEW Ginni Filaments Ltd is a textile company manufacturing cotton yarn, knitted fabric, non-woven fabric, garments and wipes at its factories located at Kosi Kalan (UP), Panoli (Gujarat), Noida (U.P.) and Haridwar (Uttarakhand) . Note 2 SIGNIFICANT ACCOUNTING POLICIES 2.1 ACCOUNTING CONCEPTS The company follows the mercantile system of accounting and recognizes income and expenses on accrual basis. The accounts are brpared on historical cost basis as a going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles and the provisions of the Companies Act, 2013. The Financial Statements comply with the requirements of the accounting standards notified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. 2.2 USE OF ESTIMATES The brparation 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. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized. 2.3 FIXED ASSETS Fixed Assets are stated at cost less accumulated debrciation / impairment loss, if any. Cost includes freight, duties, taxes, and other incidental expenses. Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective fixed assets. Machinery spares which are specific to a particular item of the fixed assets and if their use is expected to be irregular are capitalized as applicable. Exchange rate gain or loss on foreign currency loans related to acquisition of debrciable assets are being capitalized as per the notification dated 31st March, 2009 as amended from time to time issued by Ministry of Corporate Affairs, New Delhi 2.4 DEbrCIATION/AMORTISATION Debrciation on fixed assets is provided on straight line method at the rate and in the manner brscribed in Schedule II of the Companies Act, 2013, w.e.f. 1st April, 2014 except in case of continuous Process plant.The debrciation on continuous Process Plant has been provided as per useful life technically evaluated by chartered engineer. Cost of leasehold land is amortized over the period of lease. 2.5 IMPAIRMENT OF ASSETS An asset is treated as impaired when the carrying amount of an asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist. 2.6 LEASES Lease payments under an operational lease are recognized as expense in the Statement of Profit and Loss as per terms of lease agreement. 2.7 RESEARCH AND DEVELOPMENT Revenue expenditure is charged as an expense in the year it is incurred. Capital expenditure is taken as fixed assets and debrciation is provided on such assets as per the provisions of the Companies Act, 2013. 2.8 INVENTORIES Raw materials, stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods, stock in trade and stock in transit are valued at lower of cost and net realizable value. The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their brsent location and condition. Waste is valued at net realizable value. The excise duty in respect of closing inventory of finish goods is included as part of finished goods. Cost of inventories is computed on weighted average/FIFO/specific identification, as applicable. 2.9 INVESTMENTS Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such decline is other than temporary. 2.10 GOVERNMENT GRANTS Capital grants relating to fixed assets are reduced from the gross value of fixed assets. Other capital grants are credited to capital reserve. Revenue grants are credited in Statement of Profit and Loss or deducted from related expenses. 2.11 PROVISION AND CONTINGENCIES A provision is recognized when there is a brsent obligation as a result of past event and it is probable that there will be an outflow of resources in respect of which a reliable estimate can be made. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements. 2.12 FOREIGN CURRENCY TRANSACTIONS Export Sales in foreign currency are accounted for at the exchange rate brvailing on the date of negotiation, where such sales are not covered by forward contracts. Outstanding export documents pending negotiation when not covered by foreign exchange forward contracts are accounted for at the brvailing conversion rates at the end of each reporting date and difference if any in actual realization of such documents is accounted for in foreign exchange fluctuation account to be credited/charged to the Statement of Profit and Loss Account in the year of realization. Forward contract are fair valued at each reporting date and resultant gain or loss from these transaction are recognized in the Statement of Profit and Loss. Any income or expense on account of exchange difference either on settlement or on transactions is recognized in the Statement of Profit and Loss except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets. 2.13 REVENUE RECOGNITION Export sales are recognized on the basis of date of bill of lading and other sales on ex-factory dispatch. Export benefits/ incentives are accounted for on accrual basis.Sales include excise duty and are net of claims, rebates and discounts allowed during the year. 2.14 EMPLOYEE BENEFITS (i) The company makes defined contribution to Provident Fund which is recognized in the Statement of Profit and Loss on accrual basis. (ii) The company's liabilities under Payment of Gratuity Act and long term compensated absences (unfunded) are determined on the basis of actuarial valuation made at the end of each financial year using the Projected Unit Credit Method. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the brsent value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation. (iii) Termination benefits are recognized as and when incurred. 2.15 CLAIMS In accordance with the consistent practice, insurance and other claims, to the extent considered recoverable, are accounted for in the year relevant to claim while the balance is accounted for on settlement. 2.16 BORROWING COST Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss. 2.17 INCOME TAXES Current tax rebrsents amount of income tax payable including the tax payable u/s 115JB, if any, in respect of taxable income for the year. Minimum Alternate Tax Credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period. The deferred tax for timing differences between the book profits and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future. 2.18 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS The use of Financial Derivatives Hedging Contracts is governed by Company's policies which provide for the use of such financial derivatives consistent with the Company's risk management strategy. The Company does not use derivative financial instruments for speculative purposes. Keeping in view of the principle of prudence as per Accounting Standard 1 on "Disclosure of Accounting Policies" outstanding derivative contracts at the Balance Sheet date are now marked to market and accordingly, the resulting mark to market losses / gains are recognized in the Statement of Profit and Loss. Note 3 EXCEPTIONAL ITEMS Exceptional Items rebrsent provision of Rs. 119.10 Lacs (brvious year 293.80 Lacs) towards recompense amount in respect of interest cost payable under CDR guidelines NOTE 4 DEbrCIATION Consequent to the enactment of the Companies Act 2013 (the Act) and its applicability for accounting period commencing after 1st April, 2014, the Company has reviewed and revised the estimated useful lives of its fixed assets except continuous process plant in accordance with provisions of the Schedule II of the Act. The management has got technically evaluated the useful life of the continuous process plants as on 1st April, 2014 and has accordingly charged debrciation on it. NOTE 5 LITIGATION The Company is subject to legal proceedings and claims which have arisen in the ordinary course of business. The Company's management does not reasonably expect that these legal actions when ultimately concluded and determined, will have a material and adverse affect on the Company's results of operations or financial condition. NOTE 6 Balance of receivables, creditors and advances are subject to confirmation and /or reconciliation. Note No 1 to 46 referred to above form an integral part of financial statements. As per our report of even date attached. For P. L. GUPTA & CO. Chartered Accountants Firm Kegistration No. - 011575C YUVRAJ SINGH Partner Membership No. - 071846 SHISHIK JAIPUKIA Chairman & Managing Director SUKESH SINGHVI Director Finance & CFO SAKEI JAIPUKIA Executive Director KAJESH IKIPAIHI Company Secretary Place : Noida Dated : 30th April, 2016 |