Mar 31, 2014
A. Accounting Conventions
The company''s financial statements have been prepared in accordance
with the historical cost convention on accrual basis of accounting , as
applicable to going concern, in accordance with Generally Accepted
Accounting Principles (GAAP) in India, mandatory Accounting Standards
prescribed in The Companies (Accounting Standards) Rules 2006, issued
by Central Government, in consultation with the provisions of Companies
Act, 1956 to the extent applicable. The financial statements are
presented in Indian Rupees.
All assets and liabilities have been classified as current or non
current, as per company''s normal operating cycle and other criteria set
out in the Revised Schedule VI of Companies Act, 1956.
B. Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported balances of assets
and liabilities and disclosures relating to the contingent liabilities
as at the date of the financial statements and reported amounts of
income and expenses during the year. Example of such estimates include
provision for doubtful debts, employees benefits, provision for income
tax, the useful lives of depreciable fixed assets and provision for
impairment.
C. Revenue Recognition
1 Sales :-
Sales Revenue is recognised on dispatch of goods net of trade discount
and sales tax when :
(i) All the significant risks and rewards of ownership have been
transferred to the buyer and the company retains no effective control
of the goods transferred to a degree usually associated with ownership.
(ii) No significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
2 Export Benefits :-
The Revenue in respect of Export benefits is recognised on post export
basis at the rate, at which the entitlement accrues. Such amount is
included under the head sales
3 Interest is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
D. Fixed Assets
- Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes & incidental expenses related to acquisition,
net of depreciation to date except Land at Jugiana which was acquired
before 01-04-1987 and has been stated at revalued amount.
- Capital work in progress includes, cost of assets at site and
pre-operative expenditure, pending allocation to fixed assets.
E Inventory Valuation
Inventories are valued at cost or net realizable value whichever is
lower except scrap at net realisable value. The cost formula used for
valuation of inventories are:-
1 In respect of raw material on specific identification method i.e.
specific costs are attributed to identified items of inventory.
2 In case of stores and spares at FIFO basis plus direct expenses.
3 In respect of work in process at raw material cost plus conversion
cost depending on stage of completion.
4 Finished goods are valued at weighted average of raw material cost
plus conversion cost, packing cost and other overheads incurred to
bring the inventory to their present condition and location.
F. Depreciation
(i) Depreciation has been provided in accordance with Schedule XIV of
the Companies Act, 1956. The Depreciation has been provided on SLM.
(ii) Depreciation on addition to assets costing Rs. 5000/- or below has
been charged on 100% basis.
G. Taxes on Income
The accounting treatment followed for taxes on income is to provide for
current tax and deferred tax. Current tax is the amount of tax payable
in respect of taxable income for a period. Deferred tax is the effect
of timing differences being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal on one or more subsquent periods. Deferred Tax Assets on
unabsorbed depreciation or carry forward of losses under tax laws are
not recognised, unless there is virtual certainty supported by
convincing evidence that sufficiant future taxable income will be
available against which such deferred tax assets can be realised. In
other cases deferred tax assets is recognised and carried forward to
the extent there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
H. Retirement Benefits
i) Short Term Employee Benefits :
Short Term Employee benefits are recognised on an undiscounted basis in
the Profit & Loss Statement of the year in which the related service is
rendered.
ii) Post Employment Benefits :
a) Provident Fund
Benefits to employees are provided for by contribution to Provident and
other funds in accordance with provisions of Employee Provident Fund
and Miscellaneous Provisions Act, 1952 , the payment of which are
accounted for on accrual basis.
b) Gratuity
Provision for gratuity liability to employees is made on the basis of
actuarial valuation as at the end of the period.
c) Leave With Wages
Provision for leave with wages is made on the basis of actuarial
valuation as at the end of the period.
I. Foreign Currency Transactions
(I) All foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Assets & Liabilities related to
Foreign Currency transactions remaining unsettled during the period are
converted into rupees at exchange rates prevailing on the balance sheet
date, except those covered by the forward contracts. Gain or Losses on
transaction of current assets and current liabilities is adjusted in
the profit and loss statement for the year.
(ii) Exchange difference on Forward exchange contract is recognised in
the Statement of Profit & Loss in the reporting period in which the
exchange rate changes. Profit or Loss arising on cancellation or
renewal of such contract is recognised as income or expense in the
period in which such Profit or Loss arises.
J. Impairment of Assets
At each balance sheet date an assessment is made whether any indication
exists that an asset has been impaired. If anysuch indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
K. Contingent Liabilities
Contingent liability is disclosed in case of:
a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
b) a possible obligation, unless the probability of outflow in
settlement is remote.
L. Investments
Long term investments are considered "at Cost" on individual
investment basis, unless there is a decline, other than temporary, in
value thereof, in which case adequate provision is made against such
diminution in the value of investments.
M. Borrowing Costs
Borrowing costs that are directly attributable to acquisition or
construction of qualifying assets, are treated as part of cost of
capital assets. Other borrowing costs are treated as expenses for the
period, in which they are incurred.
N. Earning Per Share
Basic earning per share is calculated by dividing the net profit or
loss for the period, attributable to equity shareholders, by the
weighted average number of equity shares outstanding during the period.
O. Operating Lease
Assets acquired on leases wherein a significant portion of the risks
and rewards of ownership are retained by the lesser are classified as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
(f) Rights, preferences and restrictions attached to shares
Equity Shares: The company has one class of equity shares having a par
value of Re.1 per share. Each shareholder is eligible for one vote per
share held. In the event of liquidation, the equity shareholders are
eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their
shareholding.
0.1% Cumulative Redeemable preference shares: 171,031,450, 0.1%
Cumulative Redeemable preference shares of Re.1 each were issued in
November 2007, redeemable in five equal installments starting from 11th
year from date of allotment i.e 12.11.2007. However, the company has
the option to redeem them earlier at their Net Present Value.
Dec 31, 2011
A. ACCOUNTING CONVENTIONS
The Accompanying Financial Statements have been prepared on accrual
basis in accordance with the historical cost convention and in
accordance with the accounting standards referred to in section 211
(3C) of the Companies Act, 1956
B. REVENUE RECOGNITION
(i) Sales
Sales Revenue is recognized on dispatch of goods net of trade discount,
cash discount and sales tax when
i. all the significant risks and rewards of ownership have been
transferred to the buyer and the company retains no effective control
of the goods transferred to a degree usually associated with ownership.
ii. No significant uncertainly exists regarding the amount of the
consideration that will be derived from the sale of the goods
(ii) Export Benefits
The Revenue in respect of Export benefits is recognized on post export
basis at the rate, at which the entitlement accrues. Such amount is
included under the head sales.
(iii) Interest
Interest is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
C. INVENTORY VALUATION
Inventories are valued at cost or net realisable value, whichever is
lower. The cost in respect of following items is computed as under: -
a) In case of Raw Material on specific identification method i.e
specific costs are attributed to identified items of inventory.
b) In case of stores and spares at FIFO plus direct expenses.
c) In case of Work-in-Process at raw material cost plus conversion cost
depending on the stage of completion.
In case of Finished Goods, at weighted average of raw material cost
plus conversion cost, packing cost 1 and other overheads incurred to
bring the inventory to their present condition and location.
D. FIXED ASSETS
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties and taxes & incidental expenses related to acquisition
except Land at Jugiana which was acquired before 01-04-1987, has been
stated at revalued amount. In respect of project involving
construction, related pre-operational expenses form part of the value
of Assets capitalised.
E. DEPRECIATION
a) Depreciation has been provided in accordance with Schedule XIV of
the Companies Act, 1956. The Depreciation has been provided on SLM
basis except for Vanaspati unit where it is on WDV basis.
Besides relying upon expert opinion obtained by the management,
depreciation on specified items of plant & machinery has been provided
at the rates prescribed for continuous process plant.
b) Depreciation on addition to assets costing Rs. 5000/- or below has
been charged on 100% basis.
F. INVESTMENT
Investments are valued at cost less any diminution in their value,
which is of permanent nature.
G. RETIREMENT BENEFITS
a) Short Term Employee Benefits
Short Term Employee benefits are recognized on an undiscounted basis in
the Profit & Loss Account of the year in which the related service is
rendered.
b) Post Employment Benefits
(i) Provident Fund
Benefits to employees are provided for by contribution to Provident and
other funds in accordance with provisions of Employee Provident Fund
and Miscellaneous Provisions Act, 1952 , the payment of which are
accounted for on accrual basis.
(ii) Gratuity
Provision for gratuity liability to employees is made on basis of
actuarial valuation as at the year end.
(iii) Leave With Wages
Provision for Leave with wages is on basis of actuarial valuation as at
the year end.
H. BORROWING COST
Borrowing costs that are directly attributable to acquisition or
construction of qualifying assets are treated as part of cost of
capital asset Other borrowing cost is treated as expenses for the
period in which they are incurred.
I. FOREIGN CURRENCY TRANSACTIONS
All foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Assets & Liabilities related to
Foreign Currency transactions remaining unsettled during the period are
converted into rupees at exchange rates prevailing on the balance sheet
date, except those covered by forward contracts. Gain or losses on
transaction of current assets and current liabilities is adjusted in
the Profit & Loss Account for the year.
J. TAXES ON INCOME
The accounting treatment followed for taxes on income is to provide for
current tax and deferred tax. Current tax is the amount of tax payable
in respect of taxable income for a period. Deferred tax is the effect
of timing differences being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal on one or more subsequent periods. Deferred tax assets are not
recognized, unless there is virtual certainty that sufficient future
taxable income will be available against which, such deferred tax
assets can be realised
K. IMPAIRMENT OF ASSETS
Fixed Assets subject to amortization/depreciation, are reviewed at each
balance sheet date for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount, by which the assets
carrying amount exceeds its recoverable amount viz the higher of the
assets fair value less costs to sell and value in use.
L. CONTINGENT LIABILITIES
Contingent liability is disclosed in case of
a) a present obligation arising from a past event when it is not
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation or
b) a possible ordination, unless the property of out now in settlement
is remote.
Sep 30, 2010
A. ACCOUNTING CONVENTIONS:
The accompanying financial statements have been prepared on accrual
basis in accordance with the historical cost conventions.
B. REVENUE RECOGNITION
(i) Sales Revenue is recognized on dispatch of goods net of trade
discount, cash discount and sales tax.
(ii) The Revenue in respect of Export benefits, is recognized on post
export basis at the rate, at which the entitlement accrues. Such amount
is included under the head sales.
C. INVENTORY VALUATION
Inventories are valued at cost or net realisable value whichever is
lower. The cost in respect of following items is computed as under:
(i) In case of Raw Material and Stores & Spares on FIFO basis plus
direct expenses, except in case of Oswal Cotton Spinning Mills on
specific identification method.
(ii) In case of Work-in-Process at raw material cost plus conversion
cost depending on the stage of completion.
(iii) In case of Finished Goods, at weighted average of raw material
cost plus conversion cost, packing cost and other overheads incurred to
bring the inventory to their present condition and location.
D. FIXED ASSETS
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties and taxes & incidental expenses related to acquisition
except Land at Jugiana which was acquired before 01-04-1987, has been
stated at revalued amount. In respect of project involving
construction, related pre-operational expenses form part of the value
of Assets capitalised
E DEPRECIATION
i) Depreciation has been provided in accordance with Schedule XIV of
the Companies Act, 1956. The Depreciation has been provided on SLM
basis except for Vanaspati unit where it is on WDV basis. Besides
relying upon expert opinion obtained by the management, depreciation on
specified items of plant & machinery has been provided at the rates
prescribed for continuous process plant.
ii) Depreciation on addition to assets costing below Rs. 5000/- has
been charged on 100% basis.
F INVESTMENTS
Investments are valued at cost less any diminution in their value,
which is of permanent nature.
G RETIREMENT BENEFITS:
A) SHORT TERM EMPLOYEE BENEFITS:
Short Term Employee benefits are recognized on an undiscounted basis in
the Profit & Loss Account of the year in which the related service is
rendered.
B) POST EMPLOYMENT BENEFITS:
(i) PROVIDENT FUND
Benefits to employees are provided for by contribution to Provident and
other funds, the payment of which are accounted for on accrual basis.
(ii) GRATUITY
Provision for gratuity liability to employees is made on basis of
actuarial valuation as at the year end.
(iii) LEAVE WITH WAGES
Provision for Leave with wages is on basis of actuarial valuation as at
the year end.
H. BORROWING COST:
Borrowing costs that are directly attributable to acquisition or
construction of qualifying assets are treated as part of cost of
capital asset. Other borrowing cost is treated as expenses for the
period in which they are incurred.
I. FOREIGN CURRENCY TRANSACTIONS:
All foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Assets & Liabilities related to
Foreign Currency transactions remaining unsettled during the period are
converted into rupees at exchange rates prevailing on the balance sheet
date, except those covered by forward contracts. Gain or losses on
transaction of current assets and current liabilities is adjusted in
the profit & loss account for the year.
J. TAXES ON INCOME
(i) The accounting treatment followed for taxes on income is to provide
for current tax and deferred tax. Current tax is the amount of tax
payable in respect of taxable income for a period. Deferred tax is the
effect of timing differences being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal on one or more subsequent periods. Deferred tax
assets are not recognized, unless there is virtual certainty that
sufficient future taxable income will be available against which, such
deferred tax assets can be realised.
K. IMPAIRMENT OF ASSETS
1. Fixed Assets subject to amortization, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the
amount, by which the assets carrying amount exceeds its recoverable
amount viz the higher of the assets fair value less costs to sell and
value in use.
2) Cumulative Redeemable Preference Shares are redeemable in five equal
annual installments starting from 11th year from date of allotment i.e.
12.11.2007. However, the company has option to redeem these Cumulative
Redeemable Preference Shares earlier at their Net Present Value.