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Accounting Policies of H P Cotton Textiles Mills Ltd. Company

Mar 31, 2015

1 Basis of Preparation of Financial Statements

The financial statements have been prepared to comply with Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provision of the Companies Act, 2013.The financial statements are prepared on accrual basis under the historical cost convention. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year.

2 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 actual and estimation are recognised in the period in which the result are known/ materialise.

3 Fixed Assets

All fixed assets are valued at cost less depreciation. All costs including borrowing costs relating to the acquisition and installation of fixed assets are capitalised.

4 Depreciation

Depreciation on Fixed Assets is provided to the extent of depreciable amount on the 'Straight Line Method'. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

5 Impairment

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exist the recoverable amount of the asset is estimated to determine the extent of impairment loss and necessary adjustments is made there against Reversal of impairment loss is recognised as income in the profit and loss account.

6 Investment

Current investment are carried at lower of cost and fair value; if any, and Non Current Investments are stated at cost.; if any, Provision for diminution in value on Non Current investments is made only if such a decline is other than temporary.

7 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as 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.

8 Revenue Recognition

Sales: Sales of goods is recognised at the point of despatch of finished goods to the customers and is reported excluding rebates, discounts, sales tax value added tax. Differences arising due to exchange fluctuation in case of Export Sales are included in sales.

9 Borrowing Cost

Borrowing costs are charged to Profit & Loss Account except borrowing costs directly attributable to the acquisition of fixed assets which are capitalised upto the date of the fixed assets is put to commercial use.

10 Employees Benefits

a) Gratuity: Provision for gratuity liability has been made as per actuarial valuation.

b) Leave Encashment: Provision for accumulated leave encashment liability has been made as per actuarial valuation.

11 Foreign Exchange Transactions

Foreign Currency Transactions outstanding at the close of the year are converted into Indian Rupee on the basis of exchange rate of the currency as on the close of the year.

12 Taxation

a) Provision for current tax is made after taking into consideration benefits admissible under The Income Tax Act,1961.

b) Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates and laws that have been enacted or substantively enacted as on the date of the balance sheet. Def- ferried Tax Asset is recognised and carried forward only to the extent that here is reasonable certainty that the assets will be realised in the future.

13 Inventories

Inventories have been valued as under:- - Finished Goods including in transit has been valued at cost or market value whichever is less.

- Loose yarn is valued at cost.

- Stock in Process is valued at Cost.

- Raw Materials are valued at cost.

- Stores & Spare Parts, Colour &Chemicals, Packing Materials and Oil and Fuel are valued at cost.

- Stock of Cotton Waste/Scrap is valued at estimated realisable value.

14 Segment Reporting

The Company has one reportable primary segment of Textiles (Spinning). Hence segment reporting is not applicable.


Mar 31, 2014

1 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant disclosure requirements of Companies Act, 1956/ 2013 as applicable as adopted consistently by the company. The accounting policies have been consistently applied by the company and are consistant with those used in the previous year.

2 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. Diffrence between actual and estimation are recognised in the period in which the result are known/ materialise.

3 Fixed Assets

All fixed assets are valued at cost less depreciation. All costs including borrowing costs relating to the acquisition and installation of fixed assets are capitalised.

4 Depreciation

Depreciation is provided under the ''Straight Line Method'' as per the rates specified in Schedule XIV to the Companies Act, 1956.

5 Impairment

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exist the recoverable amount of the asset is estimated to determine the extent of impairment loss and necessary adjustments is made there against Reversal of impairment loss is recognised as income in the profit and loss account.

6 Investment

Long Term Investments are carried at cost less provision; if any, for dimunation in market value which in the opinion of the Board of Directors is not temporary.

7 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as 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.

8 Revenue Recognition

Sales: Sales of goods is recognised at the point of dispatch of finished goods to the customers and is reported excluding rebates,discounts, sales tax. Differences arising due to exchange fluctuation in case of Export Sales are included in sales.

9. Borrowing Cost

Borrowing costs are charged to Profit & Loss Account except borrowing costs directly attributable to the acquisition of fixed assets which are capitalised upto the date of the fixed assets is put to commercial use.

10. Employees Benefits

a) Gratuity: Provision forgratuity liability has been made as peractuarial valuation.

b) Leave Encashment: Provision for accumulated leave encashment liability has been made as per actuarial valuation.

11 Foreign Exchange Transactions

Foreign Currency Transactions outstanding at the close of the year are converted into Indian Rupee on the basis of exchange rate of the currency as on the close of the year.

12 Taxation

a) Provision for current tax is made after taking into consideration benefits admissible under The Income Tax Act, 1961.

b) Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates and laws that have been enacted or substantively enacted as on the date of the balance sheet. Defferred Tax Asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realised in the future.

13. Inventories

Inventories have been valued as under:- Finished Goods including in transit has been valued at cost or market value whichever is less.

* Loose yarn is valued at cost.

* Stockin Process is valued at Cost.

* Raw Materials are valued at cost.

* Stores & Spare Parts, Colour &Chemicals, Packing Materials and Oil and Fuel are valued at cost.

* Stock of Cotton Waste/Scrap is valued at estimated realisable value.

14. Segment Reporting

The Company has one reportable primary segment of Textiles (Spinning). Hence segment reporting is not applicable.


Mar 31, 2012

1 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant disclosure requirements of Companies Act, 1956 as adopted consistently by the company. The accounting policies have been consistently applied by the company and are consistant with those used in the previous year.

2 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. Diffrence between actual and estimation are recognised in the period in which the result are known/ materialise.

3 Fixed Assets

All fixed assets are valued at cost less depreciation. All costs including borrowing costs relating to the acquisition and installation of fixed assets are capitalised.

4 DepriCiation

Depreciation is provided under the 'Straight Line Method' as per the rates specified in Schedule XIV to the Companies Act, 1956.

5 Impairment

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exist the recoverable amount of the asset is estimated to determine the extent of impairment loss and necessary adjustments is made there against Reversal of impairment loss is recognised as income in the profit and loss account.

6 Investment

Long Term Investments are carried at cost less provision; if any, for dimunation in market value which in the opinion of the Board of Directors is not temporary.

7 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as 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.

8 Revenue Recognition

Sales: Sales of goods is recognised at the point of despatch of finished goods to the customers and is reported excluding rebates,discounts, sales tax. Differences arising due to exchange fluctuation in case of Export Sales are included in sales. .

9 Borrowing Cost

Borrowing costs are charged to Profit & Loss Account except borrowing costs directly attributable to the acquisition of fixed assets which are capitalised upto the date of the fixed assets is put to commercial use. .

10 Employees Benefits

a) Gratuity: Provision for gratuity liability has been made as per actuarial valuation.

b) Leave Encashment: Provision for accumulated leave encashment liability has been made as per actuarial valuation.

SIGNIFICANT ACCOUNTING POLICIES 11 Foreign Exchange Transactions

Foreign Currency Transactions outstanding at the close of the year are converted into Indian Rupee on the basis of exchange rate of the currency as on the close of the year.

12 Taxation

a) Provision for current tax is made after taking into consideration benefits admissible under The In- come Tax Act,1961.

b) Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates and laws that have been enacted as on the date of the balance sheet. Deferred Tax Asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realised in the future.

13 Inventories ,

Inventories have been valued as under:-

-Finished Goods including in transit has been valued at cost or market value whichever is less. -Loose yarn is valued at cost.

-Stock in Process is valued at Cost.

-Raw Materials are valued at cost.

-Stores & Spare Parts, Colour &Chemicals, Packing Materials and Oil and Fuel are valued at cost. -Stock of Cotton Waste/Scrap is valued at estimated realisable value.

14 Segment Reporting

The Company has one reportable primary segment of Textiles (Spinning). Hence segment reporting is not applicable.


Mar 31, 2010

The financial statements have been prepared under the historical cost conversion and in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant disclosure requirements of Companies Act, 1956 as adopted consistently by the Company. The accounting policies have been consistently applied by the Company and are consistant with those used in the previous year.

a. All revenues, costs, assets and liabilities are accounted for on accrual basis.

b. FIXED ASSETS : All fixed assets are valued at cost less depreciation. All costs relating to the acquisition and installation of fixed assets are capitalised.

c. DEPRECIATION : Depreciation is provided under the Straight Line Method1 as per the rates specified in Schedule XIV to the Companies Act, 1956.

d. IMPAIRMENT - At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that these assets suffered an impairment loss. If any such indication exist the recoverable amount of the asset is estimated to determine the extent of impairment loss and necessary adjustment is made there against. Reversal of impairment loss is recognised as income in the profit and loss account.

e. Investment: Long Term Investments are carried at cost less provision, if any for permanent dimunation in value.

f. INVENTORIES : Inventories have been valued as under:-

- Finished Goods including in transit has been valued at cost or market value whichever is less.

- Loose yarn is valued at cost proportionate to the respective stage of production.

- Stock in Process is valued at Raw Material Cost.

- Raw Materials are valued at cost.

- Stores & Spare Parts, Colour &Chemicals, Packing Materials and Oil and Fuel are valued at cost.

- Stock of Cotton Waste/Scrap is valued at estimated realisable value.

g. SALES : Sales of goods is recognised at the point of despatch of finished goods to the customers and is reported excluding rebates,discounts, sales tax. Differences arising due to exchange fluctuation in case of Export Sales are included in sales.

h. GRATUITY : Provision for gratuity liability has been made as per actuarial valuation.

i. LEAVE ENCASHMENT : Provision for accumulated leave encashment liability has been made as per actuarial valuation.

j. Borrowing costs are charged to Profit & Loss Account except borrowing costs directly attributable to the acquisition of fixed assets which are capitalised upto the date of the fixed assets is put to commercial use.

k. FOREIGN CURRENCY TRANSACTIONS : Foreign Currency Transactions outstanding at the close of the year are converted into Indian Rupee on the basis of exchange rate of the currency as on the close of the year.

l. Taxes on income : Provision for current tax is made after taking into consideration benefits admissible under The Income Tax Act,1961.

Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using taxrates and laws that have been enacted as on the date of the balance sheet. Defferred Tax Asset is recognised and carried forward only to the the extent that there is reasonable certainty that the assets will be realised in the future.

m. Segment Reporting: The Company has one reportable primary segment of Textiles (Spinning). Hence segment reporting is not applicable.

 
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