Notes forming part of the financial statements for the year ended 31st March 2015

Note 1 : Corporate Information

Valson Industries Limited was incorporated on 2nd June, 1983 with Registrar of Companies, Maharashtra State. It's processing manufacturing Units are located at Vapi in Gujarat and Silvassa in UT. Dadra Nagar & Haveli. It is engaged in Texturising, Twisting of Polyester yarns and Dyeing of Polyester, Cotton and other fancy Yarns.

Note 2 : Significant accounting policies :

2.1 BASIS OF brPARATION OF FINANCIAL STATEMENTS:

The financial statements have been brpared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles and materially comply with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006 and relevant provisions of Companies Act 2013.

2.2 USE OF ESTIMATES:

The brsentation of financial statements is in conformity with the generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the period in which results are known/materialised.

2.3 REVENUE RECOGNITION:

Sales includes sale of waste yarn and excise duty but excludes discount. Sales are accounted on despatch of goods to customers.

2.4 FIXED ASSETS:

Tangible Assets:

The tangible assets are stated at their original cost less accumulated debrciation and impairment loss, if any. In the case of tangible assets acquired for New project, interest cost on borrowings and other related expenses incurred up to the date of completion of project or commencement of commercial production are capitalised. Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress. Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

2.5 IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is greater than the assets net selling price and value in use. During the year there is no impairment of the assets.

2.6 INVESTMENT:

Long Term Investments are stated at cost in accordance with the Accounting Standard on "Accounting for Investments" (AS - 13) notified by the Companies (Accounting Standards) Rules 2006.

2.7 INVENTORIES:

i) Raw Materials are valued at cost determined on First in First out (FIFO) Method.

ii) Finished Goods are valued at cost or net realisable value whichever is lower.

iii) Stores and Spares, Fuel & Packing Materials are valued at cost.

2.8 DEbrCIATION, AMORTISATION

Tangible Assets:

Debrciation on Fixed Assets is provided using Straight Line Method on basis of useful life as specified in Schedule II of the Companies Act, 2013.

Intangible Assets:

Computer Software is amortised over a period of 5 years as per AS 26 "Intengible Assets".

2.9 BORROWING COST:

Borrowing costs consists of interest and other cost that the company incurs in connection with the borrowing of funds. Financing Cost relating to borrowed funds attributable to constructions and acquisition of fixed assets for the period upto the completion of construction or acquisition of fixed assets are included in the cost of the assets to which they relate. 

2.10 EMPLOYEE BENEFITS: Short term employee benefits:

All employee benefits falling due wholly within 12 months of rendering the services are classified as short term employee benefits and are recognised as an expenses in the period in which the employee renders the related services.

Post - Employment benefits:

Defined Contribution Plan

The company's contribution towards the provident fund and the social securities for certain eligible employees are considered to be defined contribution plans as the company does not carry any further obligations apart from the contributions made on a monthly basis.

Defined Benefit Plan

The company's liability for gratuity is determined using the Projected Unit Credit Method with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profit and loss.

The employees of the company are entitled to be compensated absences and leave encashment as per the policy of the company, the liability in respect of which is provided on an accrual basis.

2.11 TAXES ON INCOME:

Provision for taxation has been made in accordance with the applicable income tax laws brvailing for the relevant assessment year.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

2.12 EXCISE DUTY:

The Company is following the method of accounting according to which the excise duty is generally booked as a liability at the time of removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn and paid accordingly.

The Company has opted for optional excise duty of either to take cenvat credit on input and payment of excise duty on removal of goods and accordingly provision for excise duty on closing stock as on 31st March, 2015 of Rs. 0.06 Lacs (Previous year Rs. NIL ) has been made for the same.

2.13 CENVAT:

Cenvat Credit on excise duty paid on inputs and capital assets is accounted for by reducing from the purchase cost of the related inputs or the capital assets, as the case may be as per the option granted under the Excise Act.

2.14 TRANSACTIONS IN FOREIGN CURRENCY:

Revenue transactions made in foreign currency are translated at the applicable brvailing exchange rate. Payments / Receipts made in foreign currency are translated at the applicable rate brvailing on the date of remittance. Any exchange gain / loss arising on settlement of such transactions are accounted for in the statement of profit and loss. Outstanding balance is translated at the exchange rate brvailing at the closing date. Any exchange gain or loss arising out of such restatement is accounted for in the statement of profit and loss.

Premiums or discounts arising at the inception of the forward foreign exchange contracts, other than contracts to hedge a firm commitment or a highly probable forecast transaction, are amortised and recognised in the Statement of Profit and Loss over the period of the contract. Exchange differences are recognised in the Statement of Profit and Loss.

2.15 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:

Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.16 GOVERNMENT GRANTS, SUBSIDIES:

Government grants in the nature of TUF's Interest subsidy on the Rupee Term Loan availed from the Banks under the Technology Upgradation Fund Scheme @5% on the balance outstanding, is reduced from the finance cost of the relevant Term Loan. In view of the uncertainty of the final quantum of subsidy and its receipt the interest subsidy is being accounted on receipt basis.

2.17 SEGMENT REPORTING:

As the Company's business activity falls within a single business segment viz. 'Yarns' and the sales substantially being in the domestic market, the financial statements are reflective of the information required by Accounting Standard 17 "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006.

2.18 EARNINGS PER SHARE:

Basic earnings per share has been calculated by dividing the profit after tax by the weighted average number of equity shares outstanding during the year.

Note 25 Disclosures under Accounting Standards :

Segment information

As the Company’s business activity falls within a single business segment viz. 'Yarns' and the sales substantially being in the domestic market, the financial statements are reflective of the information required by Accounting Standard 17 “Segment Reporting”, notified under the Companies (Accounting Standards) Rules, 2006.

Inter divisional transfer

Inter divisional transfer for Sales/ Processing charges for Texturising, Twisting and Dyeing of 2044.81 Lacs (Previous Year Rs.1836.70 Lacs ) are not considered for sales as well as manufacturing expenses as per Accounting Standard (AS-9) 'Revenue Recognition' issued by The Institute of Chartered Accoutants of India.

Previous year’s figures :

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure

For and on behalf of the Board of Directors

Mr. Suresh N. Mutreja

Chairman & Managing Director

Mumbai

Date: 22nd May, 2015