Home  »  Company  »  Kakatiya Textile  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Kakatiya Textiles Ltd. Company

Mar 31, 2015

1. Basis of preparation of financial statements

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in India on the accrual basis.

1.1 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes that require material adjustments to the carrying amount of the effective asset or liability effected in future periods.

1.2 Revenue Recognition

a. The company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

b. Sale of goods is accounted, when the risk and reward of ownership are passed on to the customers.

c. Domestic sales are inclusive of excise duty, wherever applicable and exclusive of other taxes, if any, and trade discounts. Income from export entitlements is accounted as and when the certainty of entitlement is determined.

d. Revenue from services rendered is recognized to the extent the performance of service is completed based on agreements / arrangements with the concerned parties.

1.3 Inventories

Inventories of Raw materials, Work-in Progress, Finished Goods, Stores and Spares are stated -"at Cost or Net Realizable Value", whichever is lower, in accordance with Accounting Standard 2 issued by The Institute of Chartered Accountants of India(ICAI). The valuation of inventory is done on FIFO basis. Goods in transit are stated at cost. Cost comprises all costs of purchase, cost of conversion and any other cost incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary based on the past experience of the company.

1.4 Provisions and Contingencies

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 recognized but are disclosed in the notes forming part of the financial statements. Contingent assets are neither recognized not disclosed in the financial statements.

1.5 Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation and impairment, if any. Direct cost are capitalized until fixed assets are ready for use. Capital work-in progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost less accumulated amortization and impairment.

1.6 Depreciation

a) Depreciation on Fixed assets other than those referred to in (b) is provided based on the useful life of the assets in the manner prescribed in Schedule II of the Companies Act, 2013.

b) The company considering useful life of the following assets different from Schedule II of the Companies Act, 2013 with support of technical opinion.

Plant and Machinery – 10 years on three shift basis

1.7 Impairment of Assets

At each Balance Sheet date, the carrying values of the tangible and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is normally charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed in subsequent accounting period if the realizable value of the asset is more than the impaired value, it shall be restated subject to maximum of the WDV of the asset.

1.8 Deferred Tax

Deferred tax assets and liabilities are recognized for future tax effect attributable to timing difference between taxable income and accounting income, which is capable of reversing in one or more subsequent periods and are measured at relevant tax rates. At each Balance Sheet date, the company reassesses unrealized deferred tax assets to the extent it becomes virtually certain of realization.

1.9 Retirement benefits to employees

a) Gratuity

In accordance with The Payment of Gratuity Act 1972, the company provides for gratuity, a defined benefit retirement plan (the gratuity plan) covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment with the Company.

Gratuity benefits are managed through the Group Gratuity Scheme of Life Insurance Corporation of India. The provision for gratuity liability is actuarially determined at each year- end and the liability arising on such valuation is charged to the Statement of Profit and Loss accordingly.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided in the Payment of Gratuity Act, 1972. The terms of benefits are common for all the employees of the company.

b) Provident fund and Employees State Insurance contributions are paid as per the rates prescribed by the respective acts and the same is charged to revenue.

1.10 Dues to Micro, Small and Medium Enterprises as defined under MSMED Act 2006

The company has obtained information from suppliers who are covered under the "Micro, Small and Medium Enterprises Development Act 2006". Based on the information and evidence available with the company, there are no dues to Micro, Small and Medium Enterprises outstanding as on 31.03.2015.

1.11 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all the dilutive potential equity shares.

1.12 Cash and Cash Equivalents

Cash and cash equivalents comprise cash and cash deposit with banks. The company considers all highly liquid investments with remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.13 Cash Flow Statement

Cash flow statement is prepared using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.


Mar 31, 2013

1.1 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes that require material adjustments to the carrying amount of the effective asset or liability effected in future periods.

1.2 Revenue Recognition

a. The company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

b. Sale of goods is accounted, when the risk and reward of ownership are passed on to the customers

c. Domestic sales are inclusive of excise duty, wherever applicable and exclusive of other taxes, if any, and trade discounts. Income from Export entitlements is accounted as and when the certainty of entitlement is determined.

d. Revenue from services rendered is recognized to the extent the performance of service is completed based on agreements / arrangements with the concerned parties.

1.3 Inventories

Inventories of Raw Materials, Work-in Progress, Finished Goods, Stores and Spares are stated "at Cost or Net Realizable Value", whichever is lower, in accordance with Accounting Standard 2 issued by The Institute of Chartered Accountants of India(ICAI). The valuation of inventory is done on FIFO basis. Goods in transit are stated at cost. Cost comprises all costs of purchase, cost of conversion and any other cost incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary based on the past experience of the company.

1.4 Provisions and Contingencies

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 recognized but are disclosed in the notes forming part of the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

1.5 Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in progress comprises outstanding advances paid to acquire fixed assets, and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost less accumulated amortization and impairment.

1.6 Depreciation

i) The company is providing depreciation on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956, on a pro-rata basis corresponding to the date of installation / commissioning / retirement.

ii) Assets costing Rs. 5000 or less are fully depreciated in the year of purchase.

1.7 Impairment of Assets

At each Balance Sheet date, the carrying values of the tangible and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is normally charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed in subsequent accounting period if the realizable value of the asset is more than the impaired value, it shall be restated subject to the WDV of the asset.

1.8 Deferred Tax

Deferred tax assets and liabilities are recognized for future tax effect attributable to timing difference between taxable income and accounting income, which is capable of reversing in one or more subsequent periods and are measured at relevant tax rates. At each Balance Sheet date, the company reassesses unrealized deferred tax assets to the extent it becomes virtually certain of realization.

1.9 Retirement benefits to employees

a) Gratuity

In accordance with The Payment of Gratuity Act 1972, the company provides for gratuity, a defined benefit retirement plan(the gratuity plan) covering eligible employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment with the company.

Gratuity benefits are managed through the Group Gratuity Scheme of Life Insurance Corporation of India. The provision for gratuity liability is actuarially determined at each year-end and the liability arising on such valuation is charged to the Statement of Profit and Loss accordingly.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided in The Payment of Gratuity Act, 1972. The terms of benefits are common for all the employees of the company.

b) Provident fund contribution is paid as per the rates prescribed by the Employees'' Provident Funds Act, 1952 and the same is charged to revenue.

1.10 Dues to Micro, Small and Medium Enterprises as defined under MSMED Act, 2006

The company has obtained information from suppliers who are covered under the "Micro, Small and Medium Enterprises Development Act, 2006". Based on the information and evidence available with the company, there are no dues to Micro, Small and Medium Enterprises, outstanding as on 31.03.2013.

1.11 Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year 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 profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all the dilutive potential equity shares.

1.12 Cash and Cash Equivalents

Cash and cash equivalents comprise cash and cash deposit with banks. The company considers all highly liquid investments with remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.13 Cash Flow statement

Cash flow statements are prepared using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.


Mar 31, 2012

1. Corporate information

Kakatiya Textiles limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the manufacturing and selling of cotton yarn.

2. Basis of preparation of financial statements

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2.1 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes that require material adjustments to the carrying amount of the asset or liability affected in future periods.

2.2 Revenue recognition

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties

- Sale of Goods is accounted when the risk and reward of ownership are passed on to the Customers.

- Domestic Sales are inclusive of excise duty, wherever applicable and exclusive of other taxes, if any, and trade discounts. Income from Export entitlements is accounted as and when the certainty of entitlement is determined.

Revenue from Services rendered is recognised to the extent the performance of service is completed based on agreements / arrangements with the concerned parties

2.3 Inventories

Inventories of Raw Materials, Work in Process, Finished Goods, Stores and Spares are stated "at Cost or Net Realisable Value", whichever is lower, in accordance with Accounting Standard 2 issued by The Institute of Chartered Accountants of India (ICAI). The valuation of inventory is done on FIFO basis. Goods in Transit are stated at cost. Cost comprises all costs of purchase, cost of conversion and any other cost incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary based on the past experience of the Company.

2.4 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognised 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 recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

Contingent liabilities: Dividend on 5,00,000 9% cumulative redeemable preference shares of Rs.100 each is in arrears from 01.04.2005. For current year Rs. 45 lakhs and previous years Rs. 270 lakhs. <

2.5 Fixed Assets

Fixed Assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, and the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost less accumulated amortization and impairment.

2.6 Depreciation

i) Depreciation on Fixed Assets: The Company is providing depreciation on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956, on a pro- rata basis corresponding to the date of Installation / Commissioning / retirement.

ii) Assets Costing Rs. 5000 or less are fully depreciated in the year of purchase.

2.7 Impairment of assets

At each Balance Sheet date, the carrying values of the tangible and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is normally charged to the Profit & Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed in current accounting periods if there has been a change in the estimate of the recoverable amount

2.8 Deferred Tax

Deferred tax assets and liabilities are recognised for future tax effect attributable to timing difference between Taxable Income and Accounting Income, which is capable of reversing in one or more subsequent periods and are measured at relevant tax rates. At each Balance Sheet date, the Company reassesses unrealised deferred tax assets to the extent it becomes virtually certain of realisation.

2.9 Retirement benefits to employees

a) Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plan (the gratuity plan) covering eligible employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment with the Company.

Gratuity benefits are managed through the group gratuity scheme of Life Insurance Corporation of India. The provision for gratuity liability is actuarially determined at the year-end and the liability arising on such valuation is charged to the Profit and Loss Account accordingly.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided in the Payment of Gratuity Act, 1972. The terms of benefits are common for all the employees of the Company.

b) Provident fund

Provident Fund Contribution is as per the rates prescribed by the Employees' Provident Funds Act, 1952 and the same is charged to revenue.

2.10 Dues to Micro, Small and Medium Enterprises as defined under MSMED Act, 2006

The Company has obtained information from suppliers who are covered under the "Micro, Small and Medium Enterprises Development Act, 2006". Based on the information and evidence available with the company, there are no dues to Micro, Small and Medium Enterprises, outstanding as on 31.03.2012.

2.11 Earning per share

Basic earnings per share are calculated by dividing the net profit or loss for the year 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 profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the efforts of all dilutive potential equity shares.

2.12 Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks. The Company considers all highly liquid investments with remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

2.13 Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the efforts of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2.14 Related Party Disclosure

1. Related party disclosure as required by Accounting Standard 18

1. Names of related parties and description of relationship

a) Key Managerial Personnel : Sri.Sumanth Ramamurthi

No remuneration is paid to Mr. Sumanth Ramamurthi

b) Other related parties


Mar 31, 2011

(a) Accounting convention: Subject to the notes on accounts, the Financial Statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in India, the applicable Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(b) Inventory accounting: Inventories of Raw Materials, Work in Process, Finished Goods, Stores and Spares are stated "at cost or net realisable value", whichever is lower, in accordance with Accounting Standard 2 issued by The Institute of Chartered Accountants of India (ICAI). The valuation of inventory is done on FIFO basis. Goods in Transit are stated at cost. Cost comprises all cost of purchase, cost of conversion and any other costs incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary based on the past experience of the Company.

(c) Revenue recognition: The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties Sale of Goods is accounted when the risk and reward of ownership are passed on to the Customers. Domestic Sales are inclusive of excise duty, wherever applicable and exclusive of other taxes, if any, and trade discounts. Income from Export entitlements is accounted as and when the certainty of entitlement is determined. o Revenue from Services rendered is recognised to the extent the performance of service is completed based on agreements / arrangements with the concerned parties.

(d) Fixed Assets are stated at historical cost of acquisition net of CENVAT Credits if any, including installation, direct attributable costs, interest and commissioning less accumulated depreciation / amortization and cumulative impairment, if any.

i) Depreciation on Fixed Assets : The company is providing depreciation on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956, on a pro-rata basis corresponding to the month of Installation / Commissioning / retirement.

ii) Assets Costing Rs. 5000 or less are fully depreciated in the year of purchases.

(e) Deferred Tax assets and liabilities are recognised for future tax effect attributable to timing difference between Taxable Income and Accounting Income, which is capable of reversing in onel or more subsequent periods and are measured at relevant tax rates. At each Balance Sheet date, the Company reassesses unrealised deferred tax assets to the extent it becomes virtually certain of realisation as the case may be.

(f) 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 asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is normally charged to the Profit & Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed in current accounting periods if there has been a change in the estimate of the recoverable amount.

(g) Contingencies and Provisions: Provisions involving substantial degree of estimation in measurement are recognised 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 recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

(h) Earnings per Share: Basic Earnings per Share is calculated by dividing the Net profit/loss attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year.


Mar 31, 2010

(a) Accounting convention: Subject to the notes on accounts, the Financial Statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in India, the applicable Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(b) Inventory accounting: Inventories of Raw Materials, Work in Process, Finished Goods, Stores and Spares are stated "at cost or net realisable value", whichever is lower, in accordance with Accounting Standard 2 issued by The Institute of Chartered Accountants of India (ICAI). The valuation of inventory is done on FIFO basis. Goods in Transit are stated at cost . Cost comprises all cost of purchase, cost of conversion and any other costs incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary based on the past experience of the Company.

(c) Revenue recognition: The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties

Sale of Goods is accounted when the risk and reward of ownership are passed on to the

Customers.

Domestic Sales are inclusive of excise duty, wherever applicable and exclusive of other

taxes, if any, and trade discounts. Income from Export entitlements is accounted as and when the certainty of entitlement is determined.

Revenue from Services rendered is recognised to the extent the performance of service is completed based on agreements / arrangements with the concerned parties.

(d) Fixed Assets are stated at historical cost of acquisition net of CENVAT Credits if any, including installation, direct attributable costs, interest and commissioning less accumulated depreciation / amortization and cumulative impairment, if any.

i) Depreciation on Fixed Assets: The company is providing depreciation on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956, on a pro- rata basis corresponding to the month of Installation / Commissioning / retirement.

ii) Assets Costing Rs. 5000 or less are fully depreciated in the year of purchases.

(e) Deferred Tax assets and liabilities are recognised for future tax effect attributable to timing difference between Taxable Income and Accounting Income, which is capable of reversing in one or more subsequent periods and are measured at relevant tax rates. At each Balance Sheet date, the Company reassesses unrealised deferred tax assets to the extent it becomes virtually certain of realisation as the case may be.

(f) 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 asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is normally charged to the Profit & Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed in current accounting periods if there has been a change in the estimate of the recoverable amount.

(g) Contingencies and Provisions: Provisions involving substantial degree of estimation in measurement are recognised 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 recognised nor disclosed in the Financial Statements.

(h) Earnings per Share: Basic Earnings per Share is calculated by dividing the Net profit/loss attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year.

 
Subscribe now to get personal finance updates in your inbox!