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Accounting Policies of Birla Transasia Carpets Ltd. Company

Mar 31, 2015

2.1 Basis of Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention.

All assets and liabilities have been classified as current and non-current as per the operating cycle criteria set out in the Revised Schedule III to the Companies Act, 2013.

2.2 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection and upon the passage of titles to the Customers.

Revenue from Supply and laying of carpets is recognized as and when the laying work is fully complete. Supply and laying of Carpets consist of the execution of Single act.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

2.3 Expenditure

Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

2.4 Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP 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. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

2.5 Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost is inclusive of the purchase price, freight, duties, levies and any indirect attributable cost of bringing the asset in the working condition for intended use.

2.6 Depreciation:

Depreciation on fixed assets is provided to the extent of depreciable amount at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013 over their remaining useful life on Straight line basis and the asset acquired on Lease, the Lease Cost is written off over the Period of Lease on Straight Line basis.

2.7 Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction and the Monetary items denominated in foreign currencies at the year end are restated at year end rates and difference is Charged to Statment of Profit and Loss as Exchange Difference.

2.8 Inventories:

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Inventory is valued as per the Weighted Average Cost as suggested by Accounting Standard - 2. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. By-products are valued at net realisable value.

2.9 Employee Benefits

Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss. Refer Note 6.

NOTES FORMING PART OF THE BALANCE SHEET, STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31st MARCH, 2015

2.10 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under 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 substantively enacted as on the balance sheet date.

Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

In the view of the Management there is no virtual certainty that the Company will generate the Revenue and therefore the Provision for Deferred Tax Assets has not made.

2.11 Segment Reporting

The company is engaged in manufacturing of machine made carpets business which as per Accounting Standard-17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India, is considered the only reportable segment of the company, hence no segment wise reporting is given.

2.12 Cash and Cash Equivalents

Cash and Cash Equivalents include cash in hand, current bank accounts.

'Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.13 Earnings Per Share

Basic earnings per share is calculated by dividing the net loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.14 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 recognized nor disclosed in the financial statements.


Mar 31, 2014

1.1 Basis of Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention.

All assets and liabilities have been classified as current and non-current as per the operating cycle criteria set out in the Revised Schedule VI to the Companies Act, 1956.

2.2 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection and upon the passage of titles to the Customers.

Revenue from Supply and laying of carpets is recognized as and when the laying work is fully -

complete. Supply and laying of Carpets consist of the execution of Single act.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

2.3 Expenditure

Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

2.4 Use of Estimates:

The preparation of financial statements 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. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

2.5 Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost is inclusive of the purchase price, freight, duties, levies and any indirect attributable cost of bringing the asset in the working condition for intended use.

2.6 Depreciation:

Depreciation on fixed assets is provided to the extent of depreciable amount at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life on Straight line basis and the asset acquired on Lease, the Lease Cost is written off over the Period of Lease on Straight Line basis.

2.7 Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction and the Monetary items denominated in foreign currencies at the year end are restated at year end rates and difference is Charged to Statment of Profit and Loss as Exchange Difference.

2.8 Inventories:

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Inventory is valued as per the Weighted Average Cost as suggested by Accounting Standard - 2. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. By-products are valued at net realisable value.

2.9 Employee Benefits

i. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

ii. Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss. Refer Note 6.

2.10 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under 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 substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

In the view of the Management there is no virtual certainty that the Company will generate the Revenue and therefore the Provision for Deferred Tax Assets has not made.

2.11 Segment Reporting

The company is engaged in manufacturing of machine made carpets business which as per Accounting Standard-17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India, is considered the only reportable segment of the company, hence no segment wise reporting is given.

2.12 Cash and Cash Equivalents

Cash and Cash Equivalents include cash in hand, current bank accounts.

''Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.13 Earnings Per Share

Basic earnings per share is calculated by dividing the net loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.14 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 recognized nor disclosed in the financial statements.


Mar 31, 2010

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial Statements of the Company have been prepared on the accrual basis of accounting, under the historical cost convention, except for revaluation of certain Fixed Assets, in accordance with the generally accepted accounting principles in India and comply with the applicable Accounting Standards prescribed under section 211 (3C) of Companies Act 1956, issued by The Institute of Chartered Accountants of India.

B. REVENUE RECOGNITION

Revenues from the sale of goods are recognized upon passage of titles to the customers, which generally coincides with the delivery. Sales are stated at contractual realizable values, net of excise, sales tax ,value added tax and trade discounts.

Revenue from supply and laying of carpets is recognized as and when the laying work is fully complete. Supply and laying of carpets consists of the execution of a single act.

Interest income is recognized on the time basis determined by the amount outstanding and the rate applicable.

C. FIXED ASSETS

Fixed Assets are stated at cost of acquisition except for revaluation of Plant & Machinery and Buildings, less accumulated depreciation. The cost of fixed asset comprises its purchase price, directly attributable costs and other apportioned indirect costs for bringing the asset to working conditions for its intended use.

D. DEPRECIATION/AMORTISATION

Depreciation on fixed assets is provided as per Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation is provided on pro-rata basis with reference to the date of addition/deletion. Assets costing less than Rs.5000/- each are depreciated fully in the year of purchase.

Leasehold Land is being amortized over the period of lease.

E. FOREIGN CURRENCY TRANSACTIONS

Transactions arising in foreign currencies during the year are converted at the rates closely approximating those ruling on the transaction date.

Foreign currencies denominated liabilities are translated at the exchange rates prevailing on the Balance Sheet date. The resultant exchange rate differences are recognized in the Profit & Loss Account for the year.

F. INVENTORIES

Inventories are valued at lower of cost and net realizable value. Cost is computed on weighted average basis. Cost for the purpose of valuation of finished and semi-finished goods is computed by taking into account the cost of material, labour and appropriate portion of overheads. Excise duty is included in the value of finished goods inventory.

G. RETIREMENT BENEFITS

Contributions to Provident and ESI Fund are made on the basis of actual liability at pre-determined rate and charged to the Profit & Loss Account.

Liability for Leave Encashment is calculated at the end of the financial year and charged to the Profit & Loss Account and for Gratuity company have taken the Gratuity Policy from Life Insurance Corporation of India.

H. TAXES ON INCOME

Policy for accounting of taxes is Tax Effective Accounting Method in accordance with the Accounting Standard-22 "Taxes On Income" issued by the Institute of Chartered Accountants of India. Accordingly deferred tax liability alone has been provided for and if net result of deferred tax liability and deferred tax asset is negative (i.e. deferred tax asset is more), recognition of deferred tax asset is ignored.

I. CONTINGENT LIABILITIES

Contingent Liabilities are not provided for and are disclosed by way of notes.

 
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