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Accounting Policies of Pitti Laminations Ltd. Company

Mar 31, 2014

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at historical cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 REVENUE / EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards/ownership are transferred to the customer.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

Note 1.4 INVESTMENTS

Non-current investments are stated at cost, and provision is made when there is a decline other than temporary in the carrying value of such investments, determined separately in respect of each category of investment.

Note 1.5 INVENTORIES

Inventories are valued as under:

Sl Particulars Basis of Valuation No.

1 Raw Material Weighted average cost or net realizable value whichever is lower

2 Work In Process Weighted average cost or net realizable value whichever is lower

3 Finished Goods Weighted average cost or net realizable value whichever is lower

4 Stores & Spares Weighted average cost or net realizable value whichever is lower

5 Scrap At Realizable value

6 Press Tools & Dies Tools & Dies manufactured in the Company''s in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies. Obsolete tools and tools which have become more than three years old are written off net of salvage value.

The cost of inventories comprises of all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present conditions.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

Note 1.6 RETIREMENT BENEFITS

1.6.1 Defined Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.6.2 Defined Benefit Plan:

a) Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

b) Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.7 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. Exchange difference arising settled foreign currency transactions during the year and translation of assets and liabilities at the yearend are recognized in the statement of profit and loss.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.9 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.10 TAXATION

1.10.1 Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

1.10.2 Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2013

1.1 BASIS OF ACCOUNTING

The fi nancial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognised and expenses accounted on their accrual.

1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalised. Such expenditure

1.4 INVENTORIES:

Inventories are valued as under:

comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortised over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specifi ed in Schedule XIV to the Companies Act, 1956.

1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

1.5 RETIREMENT BENEFITS

1.5.1 Defi ned Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.5.2 Defi ned Benefi t Plan:

Gratuity: In accordance with applicable Indian Laws, the Company provides gratuity, a defi ned benefi t retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.5.3 Defi ned Benefi t Plan:

Leave Encashment: In accordance with applicable Indian Laws, the Company provides Encashment of Leave, a defi ned benefi t plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fi xed assets are capitalised for the eligible period. Other borrowing costs are expensed in the period they occur.

1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The Company recognises gains / losses on foreign exchange rate fl uctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognised as income or expense over the life of the said contract.

1.8 LEASES

Assets acquired by way of fi nance lease are capitalised at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between

fi nance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as fi nance costs in the Statement of Profi t and Loss. Lease rentals paid in respect of operating leases are recognised as an expense in the statement of Profi t and Loss.

1.9 TAXATION

1.9.1 Income Tax

The provision for taxation is based on assessable profi ts of the Company as determined under the Income Tax Act, 1961.

1.9.2 Deferred Tax

The Company is providing and recognising deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2012

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

Note 1.4 RETIREMENT BENEFITS

Note 1.4.1 DEFINED CONTRIBUTION PLAN

Contribution as per Employee's Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Note 1.4.2 DEFINED BENEFIT PLAN

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.4.3 DEFINED BENEFIT PLAN

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.8 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.9 TAXATION Note |1.9.1| INCOME TAX

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

Note 1.9.2 DEFERRED TAX

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

The company had allotted 40,50,000 equity shares of Rs.10/- each at a price of Rs. 39.15 per share (including premium of Rs.29.15 per share) to the promoters and promoters group.

The issue price is determined in accordance with the guidelines stipulated under SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009.

The shares allotted shall rank pari-passu in all respects with the existing equity shares of the company including entitlement to dividend and voting.

Notes:

a. Term loans from scheduled banks viz State Bank of India, Oriental Bank of commerce and Allahabad Bank are secured by equitable mortgage of movable and immovable properties and first charge on the present and future fixed assets of the company situated at Plant I and Plant II Nadigaon, Mahaboobnagar district. A. P. Further these are secured by a second charge on the present and future current assets of the company and collateral security provided by the Chairman and Managing Director/relative of Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

b. The above loan is secured by exclusive charge on the machinery purchased to the extent funded and Personal guarantee provided by the Chairman and Managing Director & Vice Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

c. Secured against lien on FDR from Agroha Co-operative Urban Bank. (Repayable in September'2013)

d. Secured against hypothecation of vehicles. (Refer Note 2.7 (b) for terms of repayment)

e. Unsecured Loans from Shri G.Vijaya Kumar (Director) (Repayable in June'2013)

f. Represents 14 years interest free sales tax deferment loan received from Government of Andhra Pradesh. Repayment commences from January ,2018 based on the deferment availed in the respective years.

g. Inter Corporate Deposit received from M/s. Sri Venkateswara Coir Products Private Limited. (Repayable in June'2013)

Note:

Working capital facilities from State Bank of India, Indian Overseas Bank, Allahabad Bank, Indusind Bank and Kotak Mahindra Bank are secured on a pari passu first charge basis against hypothecation of stocks, Tools & Dies, Spares & consumables, Book debts and all other current assets both present and future. Further these are secured by second charge on fixed assets of the company both present and future, apart from the personal guarantees of the Chairman and Managing Director, Vice Chairman and Managing Director and one of the relatives of the promoter.

Note:

Out of the said amount Rs.186.69 lacs (March 31 2011 Rs.386.97 lacs) pertain to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. The information has been given in respect of such vendors to the extent they could be identified as Micro and Small enterprises on the basis of information available with the company on records.

Note:

a) Terms of repayment are given below:

i) Loan taken from SBI IFB is repayable in quarterly instalments of Rs.99.65 lacs each till March'2013

ii) Loan taken from Allahabad Bank is repayable in quarterly instalments of Rs.85.63 lacs each till March'2013

iii) Loan taken from Oriental Bank of Commerce is repayable in quarterly instalments of Rs.68.75 lacs each till January'2016.

iv) Loan taken from TATA Capital Ltd., is repayable in quarterly instalments of Rs.20.00 lacs each till May'2013

v) Loan taken from L & T Finance Ltd., is repayable in monthly instalments of Rs.7.46 lacs each till June'2016

b) Terms of repayment are given below:

i) Loan taken from ICICI Bank is repayable in monthly instalments of Rs.0.99 lacs each inclusive of interest till June'2013

ii) Loan taken from Kotak Bank is repayable in monthly instalments of Rs.0.40 lacs each inclusive of interest till May'2013

iii) Loan taken from Axis Bank is repayable in monthly instalments of Rs.0.36 lacs each inclusive of interest till November'2014

iv) Loan taken from Tata Capital is repayable in monthly instalments of Rs.2.81 lacs each inclusive of interest till January'2014


Mar 31, 2010

01.1 BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

01.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold land which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

01.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

01.4 BORROWING COSTS

Borrowing costs attributable to the acquisition/construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are charged to Profit and Loss account.

01.5 INVENTORIES: Inventories are valued as under: Particulars Basis of Valuation

Raw Material Weighted average cost or net realizable value which ever is lower

Work In Process Weighted average cost or net realizable value which ever is lower

Finished Goods Weighted average cost or net realizable value which ever is lower

Stores & Spares Weighted average cost or net realizable value which ever is lower

Scrap At Realizable value

Press Tools & Dies Tools & Dies manufactured in the Companys in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies.Obsolete tools and tools which have become more than three years oldare written off net of salvage value.

01.6 RETIREMENT BENEFITS

01.6.1 Defined Contribution Plan:

Contribution as per Employees Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

01.6.2 Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date.

01.6.3 Defined Benefit Plan:

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the balance sheet date..

01.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

01.8 Leases

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the Profit and Loss Account. Lease rentals paid in respect of operating leases are charged to Profit and Loss Account.

01.9 TAXATION

Current year Charge

01.9.1) Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

01.9.2) Wealth Tax

Wealth Tax is provided under the Wealth Tax Rules, 1957.

01.9.3) Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

 
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