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Accounting Policies of Aditya Spinners Ltd. Company

Mar 31, 2015

A. Corporate information:

Adilya Spinners Limited fLThe Company*) was incorporated on i4ih February 1991 as a public limited company, its shares are Irsted on Bombay Stock Exchange. The Company is engager in manufacturing and selling of yam

b. Basis of Preparation

The financial statements have oeen prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the histoncal cost convention or the accrual basis. GAAP comprises accounting standards notified by the Central Government of Fndea under Section 133 of the Companies Act, 2013, other pronouncements of Institute of Chartered Accountants of India, the provisions of Companies Act, 2D13. Accounting policies have been consistently aopEied and managemeni evaluates alt recently issued or neviseo accounting standards or an ongoing basis.

c. Use of Estimates

The preparation of financial statements to conformity with the Indian GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of fhe financial statements, the reporting amounts of revenue and expenses during the reporting period and the disclosures relating to contingent iiab hties as on itie dale of financial statements. Although these estimates are based on the managements best Knowledge of current events and actions, uncertainty about these assumptions and estimates could resutt in outcomes different from the estimates Difference between actua' results and estimates are recognized in the period in which the results are known or nratenaltze

Estimates and underlying assumptions are reviewed on an ongoing basis Any revision to accounting estimate* is recognized prospectively in the current and future periods.

d. Fixed Assets:

Fixed Assets are carried at the cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non - refundable taxes duties, freight and other incidental expenses related to the acquisition and installation of the respective assets Borrowing costs directly attributable to the acquisition or construction of those fixed assets which necessarily take a substantial period of rime to get ready for their intended use are capitalizes

Plani and Machinery was revalued as on 01.tM.20t4 The surplus arising from the revaluation has been transferred to uRevaluation Reserve1 and shown under the head "Reserves & Surplus1. The revaluation of fixed assets has been mode by appraisal method by an external competent valuer.

Depreciation on Tangible Fixed Assets

Depreciation on Fixed Assets have been charged based on the useftF life, fn accordance wrtb Schedule If of the Companies Act. 2313

The Management estimates the usefor rives of the revalued Plant and Machinery as 12 fears.

Depreciation on the revalued assets is adjusted against revaluation reserve without debiting to Statement Profit S Loss.

Scrap @ 5% of original cost an all tangible assets except Revalued Plan! and machinery tias been considered. Sera p @ 5% oF revoi ued amou nt has bee n carsid seed on revalued Plant ana Machinery. Depreciation es calculated on a pro- rata basis from the date or installation I revaluation till the date the assets are sold or disposed. Individual assets costing less than Rs.S.QQQ are depreciated in full in the year oF acquisition. Freehold land is not depreciated

Impairment of Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired IF any su ch indication exists. tti e Company estimates the recoverable amount of the asset, tf such recoverab e amount oF the asset or the recoverabFe amounl of the cash generating unit to which the asset belongs to is less than its carrying amount, impairment provision is created to bring down the carrying value to its recoverable amount. The reduction is treated as an impairment loss and ss recognized in the Statement of Profit and Loss. If at the Balance Sheet dare, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount js reassessed and the impairment provision created earlier is reversed to bring it at the recoverable antount subject to a maximum of depreciated historical cost

e, Expenditure during construction period

Expenditure during construction period is grouped under "Capital Work tn Progress"' and the same is allocated to the respective Fixed Assets on the completion of its construction

f. Revenue Recognition:

Sales are recognized at the point of dispatch i.e., when significant risk is transferred: to customers, except in the case of consignment agents where the revenue is recognized only after the sale is effected by fhe consignment agent Sale value includes Excise Duty and Vat

g Inventory Valuation:

Inventories including wwfc-in-progness are valued at lower of coal and net realizable value. Cost of inventory comprises all cost cf purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition

The cost of Raw Materials. Stores and Spares and Packing Materials is oetemruned by using the Weighted1 Average Cost Method. The cost of Work-imProgress and Finished Goods is determined by weighted average Cost Method and includes appropriate share of production overheads

h. Investments:

Investments are either classified qs current or tong term. Current investments are carried at the lower of cast and market value. Long term investments are carded at coat less any permanent diminution in value, determined separately fbreach individual investmenL The reduction in the carrying amount is reversed when there is a rise in the value of the investment or tf the reasons for the reduction no longer exist

i Employee Benefits

Short term benefits

Short term employee benefits are charged off at the undisco united amount in the year m which the related services are rendered.

Long term benefits

Payments to the defined contribution retirement benefit schemes are changed as an expense as they fall due.

Gratuity

Gratuity liability is a defined benefit obligation and is based on Ehe actuarial valuation All actuarial gains/i osses are immediately charged to the Profit and Loss Account and are not deferred.

Provident fund

The company has a denned contribution plan for Provident Fund under which the company contributes the fond to the Regional Provident Fund Comntissioner

j, Income-Tax expense

Income tax expense comprises current tax and deferred tax charge or credit.

Current tax

The current charge for income taxes is calculated tn accordance with the relevant lax regulations applicable to the company.

Deferred lax

Deferred tax charge of credit reflects the tax effects due to timing differences between accounting income and !axable income for the period. The deferred tax charge or credit and the corresponding deferred lax liabilities or assets are recogn-zed using the tax rates that have been enacted or substantial ly enacted by the balance s heet date Deferred fax assets are recognized only to the extent there is reasonable certainty that assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed ai each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain ;as the case may be) to be realizee

k, Earnings per share

The basic earnings per share (JEPS') is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding dunng the year For the purpose of caicuFating diluted earnings per share, net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of ail dilutive poterrtiaE equity shares

l, Provisions and contingent liabilities

The Company creates a provision where there is a present obfigation as a result of a past event that probably requires an outflow of resources and a reliable estimate can tie made of the amount of obligation. A disclosure for a contingent Aability is made when there is a possible obligation or a present obligation lhat may. but probably w;li not, require an outflow of resources. Where there is possible obligation ora present obligation i n respect of whi ch the likelihood of outflow resources -s remote, oo provision or disclosure is made

m. Borrowing Costs:

Borrowing costs attributable to the qualifying fixed assets during construction, re nova ton and modernization are capitalized. Such borrowing costs are apportioned on the average balance of capital work-in-progress far Hie year Other borrowing costs are recognizee as an expense in the period in which they are incurred.

Boro wing cost consists of interest and other financial costs incurred in connection with: borrowing of funds.

n. Cash flow statement

Casti flows are reported using the indirect method, whereby net profit/ (loss} before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or ac cru ala of past or future cash receipts or payments. The cash flows from regular re ven u e generating, investing and financing activities of the company are segregated


Mar 31, 2014

A. Corporate Information:

Aditya Spinners Limited ("The Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 in India. Its shares are listed on Bombay Stock Exchange. The Company is engaged in manufacturing and selling of yarn.

b. Basis of Preparation

i) Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention.

ii) The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

c. Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

d. Fixed Assets:

Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Depreciation on Tangible Fixed Assets:

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method.

Impairment of Assets:

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, is charged to the statement of Profit & Loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

e. Revenue Recognition:

Sales are recognized at the point of dispatch i.e., when significant risk is transferred to customers, except in the case of consignment agents where the revenue is recognized only after the sale is effected by the consignment agent. Sale value includes Excise Duty and Vat.

f. Inventory Valuation:

i) Raw Materials, Stores & Spares and Packing Materials: At Weighted Average Cost.

ii) Work in Process: At Weighted Average cost or Net Realizable Value, whichever is lower.

iii) Finished Goods: At cost or Net Realizable Value, whichever is lower.

Cost comprises of cost of purchase, cost of conversion & other costs incurred in bringing the inventories to the present location & condition.

g. Investments:

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

h. Borrowing Costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalized as part of the cost of such assets.

i. Taxation:

Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Provision for Income Tax for the current year is not made in view of the relief granted by BIFR during the revival period of 7 years starting from the financial year 2011-12.

j. Contigencies:

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

k. Earnings per Share:

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average no of Equity Shares outstanding during the year.


Mar 31, 2013

A. Corporate Information:

Aditya Spinners Limited (The Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 in India. Its shares are listed on Bombay Stock Exchange. The Company is engaged in manufacturing and selling of yarn.

b. Basis of Preparation

i). Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention.

ii). The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

c. Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

d. Fixed Assets:

Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Depreciation on Tangible Fixed Assets:

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method.

Impairment of Assets:

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, is charged to the statement of Profit & Loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

e. Revenue Recognition:

Sales are recognized at the point of dispatch i.e., when significant risk is transferred to customers, except in the case of consignment agents where the revenue is recognized only after the sale is effected by the consignment agent. Sale value includes Excise Duty and Vat.

f. Inventory Valuation:

i) Raw Materials, Stores & Spares and Packing Materials: At Weighted Average Cost.

ii) Work in Process: At weighted Average cost or Net Realizable Value, which ever is lower.

iii) Finished Goods: At cost or Net Realizable Value, which ever is lower.

Cost comprises of cost of purchase, cost of conversion & other costs incurred in bringing the inventories to the present location & condition.

g. Investments:

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

h. Borrowing Costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalized as part of the cost of such assets.

i. Taxation:

Provision for Income Tax is made for both current and deferred taxes. Provision for Current Income Tax is made at Current Tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

j. Contingencies:

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

k. Earnings per Share:

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average no of Equity Shares outstanding during the year.


Mar 31, 2012

A. Corporate Information:

Aditya Spinners Limited ("The Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act' 1956 in India. Its shares are listed on Bombay Stock Exchange. The Company is engaged in manufacturing and selling of yam.

b. Basis of Preparation

i). Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention.

ii). The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

c. Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues' expenses' assets and liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon management's best knowledge of current events and actions' actual results could differ from these estimates.

d. Fixed Assets:

Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost' net of accumulated depreciation and accumulated impairment losses' if any. The cost comprises purchase price' borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Depreciation on Tangible Fixed Assets:

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act' 1956' on Straight Line Method.

Impairment of Assets:

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss' being the excess carrying value over the recoverable value of the assets' is charged to the statement of Profit & Loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value' upon the reassessment in the subsequent years.

e. Revenue Recognition:

Sales are recognized at the point of dispatch i.e.' when significant risk is transferred to customers' except in the case of consignment agents where the revenue is recognized only after the sale is effected by the consignment agent. Sale value ___includes Excise Dutv and Vat.

f. Inventory Valuation:

i) Raw Materials' Stores & Spares and Packing Materials: At Weighted Average Cost.

ii) Work in Process: At weighted Average cost or Net Realizable Value' which ever is lower.

iii) Finished Goods: At cost or Net Realizable Value' which ever is lower. Cost comprises of cost of purchase' cost of conversion & other costs incurred in bringing the inventories to the present location & condition.

g. Investments:

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

h. Borrowing Costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalized as part of the cost of such assets.

i. Taxation:

Provision for Income Tax is made for both current and deferred taxes. Provision for Current Income Tax is made at Current Tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

j. Contingencies:

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may' but probably will not' require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

k. Earnings per Share:

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average no of Equity Shares outstanding during the year.


Mar 31, 2011

I) ACCOUNTING CONVENTION:

The company follows the mercantile system of accounting. Accounting policies not referred to specifically otherwise, are consistent with generally accepted accounting principles.

Although, the accumulated losses of the company together with the loss for the year ended March 31, 2011 exceeded its Capital & Reserves, since the company, with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

ii) FIXED ASSETS .

Fixed assets are stated at cost, less accumulated depreciation.

iii) DEPRECIATION:

Depreciation on Fixed Assets has been provided on straight line method at the rates and the manner prescribed in schedule XIV of the companies Act, 1956.

v) RETIREMENT BENEFITS:

The contribution to the provident fund is charged against revenue, in respect of gratuity, the provision is made for all eligible employees and this has not been funded. Liability for leave encashment benefit is accounted for based on the assumption that such benefit is payable to all employees at the end of the year.

vi) MISCELLANEOUS EXPENDITURE:

The preliminary and public issue expenses are amortized over a period of ten years.

vii) EXPENDITURE DURING CONSTRUCTION PERIOD:

Expenditure during construction period is capitalised during the year.

viii) FOREIGN EXCHANGE TRANSACTION : NIL

ix) REVENUE RECOGNITION:

Revenue from sale of goods is recognised on dispatch and is inclusive of Sales Tax and Net of Sales Returns, where applicable.

x) RELATED PARTY DISCLOSURE:

Related Party: Sri Chakra Cement Ltd

Related Party Transactions: Loans & Advances amounting to Rs. 25.04 Lakhs Outstanding balance with related party as on March 31, 2011: Rs.12.24 Lakhs

xi) Impairment of Assets:

To provide for impairment loss, if any, to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

Impairment losses recognised in prior years are reversed when there is an indication that the impairment losses recognised no longer exist or have decreased. Such reversals are recognised as an increase in carrying amounts of assets to the extent that it does not exceed the carrying amounts that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in previous


Mar 31, 2010

I) ACCOUNTING CONVENTION:

The company follows the mercantile system of accounting. Accounting policies not referred to specifically otherwise, are consistent with generally accepted accounting principles.

Although, the accumulated losses of the company together with the loss for the year ended March 31,2010 exceeded its Capital &, Reserves, since the company, with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

ii) FIXED ASSETS:

Fixed assets are stated at cost, less accumulated depreciation.

iii) DEPRECIATION:

Depreciation on Fixed Assets has been provided on straight line method at the rates and the manner prescribed in schedule XIV of the companies Act, 1956-

iv) INVENTORIES:

Basis of valuation

Finished Goods : At lower of cost or realizable value

Work in progress : At Cost

Raw Material : At Cost

Stores &. Spares : At Cost

v) RETIREMENT BENEFITS:

The contribution to the provident fund is charged against revenue, in respect of gratuity, the provision is made for all eligible employees and this has not been funded- Liability for leave encashment benefit is accounted for based on the assumption that such benefit is payable to all employees at the end of the year.

vi) MISCELLANEOUS EXPENDITURE;

The preliminary and public issue expenses are amortized over a period of ten years.

vii) EXPENDITURE DURING CONSTRUCTION PERIOD:

Expenditure during construction period is capitalised during the year.

viii) FOREIGN EXCHANGE TRANSACTION : NIL

ix) REVENUE RECOGNITION:

Revenue from sale of goods is recognised on dispatch and is inclusive of Sates Tax and Net of Sales Returns, where applicable.

 
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