Home  »  Company  »  Shri Lakshmi Cotsyn  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Shri Lakshmi Cotsyn Ltd. Company

Mar 31, 2015

A. Corporate Information

Shri Lakshmi Cotsyn Limited ("The Company") is a public limited company, domiciled in India and incorporated under the provisions of the Companies Act, 1956. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE), National Stock Exchange (NSE). It is primarily engaged in the business of textile manufacturing integrated backward & forward to include spinning and readymade garments.

1. Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure relating to contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialise.

3. Revenue Recognition

Revenue from sale of goods is recognised when all significant contractual obligations have been satisfied, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained by the Company. Revenue from sale of goods is recognised gross of taxes, and net of rebates and normal discounts. Exportturnover excludes related export benefits.

4. Fixed Assets :

i) Tangible Assets:

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation and impairment losses. Costs of acquisition comprise all costs incurred to bring the assets to their location and working condition up to the date the assets are ready for use. Costs of construction are composed of those costs that relate directly to specific assets and those that are attributable to the construction activity in general and can be allocated to specific assets up to the date the assets are ready for use.

ii) Intangible Assets:

Intangible assets are recognised only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Intangible assets are stated at cost less accumulated amortisation and impairment losses.

5. Investments:

Investments classified as Long Term Investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of investments. Current investments are carried at cost or fair value, whichever is lower.

6. Depreciation / Amortisation:

Depreciation is provided based on useful life of assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on Fixed Assets is provided on Straight Line Value (SLM).

The carrying amount of the asset as at the opening of the year has been either depreciated over the remaining useful life of the asset as per schedule II or where the remaining useful life of an asset is nil, after retaining the residual value, has been charged in the opening balanceof retained earnings. The amount charged to the opening reserves during the financial year is Rs. 1.42 Cr.

7. Inventories:

Items of Inventories are valued on the basis given below:

i. Raw Materials, Packing Materials, Stores and Spares: At cost determined on First-In-First-Out (FIFO) basis or net realisable value, whichever is lower.

ii. Process stock and finished goods: At cost or net realisable values whichever is lower. Cost comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition.

8. Employees Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related services are rendered. Post-employment and other long-term benefits are recognized as an expense in the statement of profit and loss of the year in which the employee has rendered services in compliance with AS-15 "Employee Benefits".

9. Government Grants:

Grants, in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFs), are accounted for as per claims filed by the banks to MOT. However amount are considered in leftout case due to late filing of claims by bank and some claim in respect of denim/sheeting expansion and technical textile is under dispute due to some technical reasons. Decision of Textile commissioner Mumbai on the said aspect is awaited.

10. Foreign exchange transaction:

In compliance with Accounting Standard -11 "The Effect of Change in Foreign Exchange Rate", transactions in foreign currency are accounted at the exchange rate prevailing on the date of such transactions. Current monetary assets and liabilities are translated at the exchange rate prevailing at the reporting date. Non-monetary items are carried at cost.

11. Provisions, contingent liabilities and contingent assets:

a. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events. A provision is made when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision is not discounted and is determined based on best estimate required to settle the obligation at the year-end date.

b. Contingent Assets are not recognized or disclosed in the financial statements.

12. Earnings Per Share:

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except when the results would be anti-dilutive.

13. Segment Reporting:

The Company is engaged in manufacturing of textiles which in the context of Accounting Standard -17 " Segment Reporting" as notified under the Companies Accounting Standards Rules, 2006, is considered as the only business segment.

14. Principles of Consolidation

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Ltd. (the Company) and its subsidiary companies viz. SLCL Overseas (FZC), Shri Lakshmi Defence Solutions Ltd. and Synergy Global Home Inc., U.S.A. The Consolidated Financial Statements have been prepared on the following basis:

i) The Financial Statements of the company and its subsidiary companies have been combined on a line-by- line basis adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group & Intra group transactions resulting in unrealized profit & losses as per Accounting Standard 21- "The Consolidated Financial Statements" notified by the companies Accounting Standards Rules, 2006.

ii) The Financial Statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the company i.e., 31st March 2015.

iii) The Consolidated Financial Statements have been prepared in accordance with AS-21.

iv) The difference between the cost of investment in the subsidiaries, and the Company's share of net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital reserves as the case may be.

v) Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the consolidated Balance Sheet separately from liabilities and equity of the company's shareholders.

Minority interest in the net assets of consolidated subsidiaries consists of:

- The amount of equity attributable to minority at the date on which the investment in subsidiary is made; and

- The minority share of movements in equity since the date the parent subsidiary relationship came into existence.

vi) Minority's share of net profit for the year of consolidated subsidiaries is identified and adjusted against the Profit after Tax of the Group.

vii) Accounting for Investments in Associate in Consolidated Financial Statements as per Accounting Standard - 23 "Accounting for Investment in Associates in Consolidated Financial Statements" notified by the companies (Accounting Standards) Rules, 2006.

Other Notes:

15. Personal Accounts Balance:

Balances of certain debtors, creditors and advances are subject to confirmation/reconciliation, if any.Certain debtors are raising counter claims due to supply of inferior quality of cloth or there was delay in supplying the material and could not be sold due to expiry of season. However company is not accepting the same and try to realize maximum amount.The amount of claims to be paid at the time of settlement is not reasonably ascertainable.

All the inventories are valued at lower of cost or net realisable value except waste which is being valued at net realisable value.

17. Interest Cost

The bank account company had become NPA. Certain bankers are charging interest on the balance amount of loan outstanding while some others are not, as per the policy adopted by each bank. In order to reconcile the loans outstanding amount with the bankers, the interest cost has been considered as charged by banks. Gross interest cost charged to profit & loss during the current year is Rs. 18,570.75 lacs.,and Interest TUFS subsidy amounting to Rs 1582.18lac received during year has been credited to interest charged account. Accordingly interest costs net of TUFS subsidy charged during the year amounts to Rs. 16,988.57 lac.

18. Promoter Contribution under CDR

As per the CDR Package approved by the CDR EG on 28th June 2013 a sum of Rs. 93.80 crores was stipulated to be inducted as promoter's contribution. In compliance with the same the company raised Rs. 93.90 Crore as Unsecured Loans from business associates to be converted into equity subject to approval of BSE/NSE, at a rate as mutually agreed between investor and the company. However, due to continuous sale of shares which were pledged to one institution, the approval for issuance of shares against such promoter's contribution could not be received.

19. Debtors & Provision for Bad & doubtful debts

Provisioning of Bad & Doubtful debts has been created to the tune of Rs. 45.43Cr. against debts which have been outstanding for a period of exceeding 1 Yearhave been reflected as short term provision.The management is still pursuing the recovery of the same through constant follow up, negotiations, allowance for discounts, legal notices etc. The management may take recourse to filling suit against such non-recovery however, the current stringent financial position of the company deters the company to involve itself in legal recourse which is a costly and a lengthy process.

20. Status at BIFR

The Accumulated losses of the company as at 31.03.2015 have amounted to 1350.74 Crore. The company is already registered under BIFR vide case no. 45/2014 as per the provisions Sick Industrial Companies (Special Provisions) Act, 1985. The first hearing was held on 06-07-2015 wherein the bankers have been required to file their objections and company to file rejoinder. The next hearing has been scheduled to be held on 01-10-2015.

21. Accumulated Losses

The company has incurred a loss of Rs. 934 .30Cr. during the period under consideration. Out of the above, loss of Rs. 430.22 Cr. has been incurred on account of loss on sale of obsolete/slow moving stock and loss on sale of stacked raw material. The company has made provision for bad/doubtful debts amounting to Rs. 45.43 Cr. and also booked bad debts of Rs. 18.60 Cr. Loss has also been incurred by the company to the tune of Rs. 20.88 Cr. for compensation to various parties on account loss on sale of shares of the company held by them and pledged to IFCI as security against loan to company which were sold by IFCI at a very low price as compare to the cost of acquisition of these shares.

22. Opportunity for OTS

The company is seeking strategic investors who may do one time settlement with the banks and also infuse working capital to increase the capacity utilization of the plants and to induct funds for capex to make their technical textile unit, yarn dyed shirting and spinning plant operational.

23. CDR Package Status

The company is under operating under CDR package. However, due to non-receipt of quantum of TUFS subsidy and non-release of total priority loans (as approved under CDR) the company has not been able to increase the capacity utilization as anticipated and hence has not been able to discharge its financial obligations under CDR and all bank accounts of the company have become NPA.


Mar 31, 2014

1) BASIS OF ACCOUNITNG:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles, Accounting Standards notified under clause 2 of Section 2 of the Companies Act, 2013 and the relevant provision thereof.

2) VALUATION OF INVENTORIES:

Inventory of Raw Material, Stores, Spares and Consumables are valued at cost. Cost is arrived at weighted Average method. Finished Goods and Semi Finished Goods are valued at cost of Raw Material at the respective units and conversion of these includes the cost incurred in the normal course of the business, in bringing the goods upto the present condition or net realizable value which is lower as accordance with the Accounting Standard-2 " Valuation of Inventories" issued by ICAI.

3) DEPRECIATION:

In respect of all the fixed assets, depreciation is provided on straight line basis applying the rates specified in Schedule II of the Companies Act, 2013. Further, depreciation on an asset, whose actual cost does not exceed Rs. 5000/- has been provided at the rate of 100%.

4) REVENUE RECOGNITION:

In accordance with the provision of Section 128(1) of the Companies Act, 2013 and in accordance with Accounting Standard -9 "Revenue Recognition", the Company follows accrual basis of accounting except in respect of interest on security deposit which is accounted for on Cash basis. Sales are invoiced on dispatch of goods to the customer.

5) TANGIBLE ASSETS:

As per Accounting Standard -10" Accounting for Fixed Assets", Tangible assets are valued at cost less accumulated depreciation.

6) INTANGIBLE ASSETS:

Intangible assets are valued at cost

7) FOREIGN EXCHANGE TRANSACTION:

As per Accounting Standard -11 "The Effect of Change in Foreign Exchange Rate", current assets and current liabilities relating to foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. Foreign currency contracts, outstanding at the close of the year have been accounted for at the exchange rate prevailing at the time of contract.

8) EMPLOYEES RETIREMENT BENEFIT:

Company''s contribution to Employees Provident Fund is charged to the Statement of Profit & Loss for the relevant financial year. Provision for leave Encashment & Gratuity has been made in accounts in Compliance with Accounting Standard -15 "Employee Benefits."

9) INVESTMENTS:

All investments are valued at cost prices. Income from these investments is credited to revenue on accrual basis.

10) RESEARCH AND DEVELOPMENT EXPENDITURE:

As per Accounting Standard – 26 " Intangible Assets" all revenue expenses pertaining to research and development are charged to the Statement of Profit and Loss in the year in which these are incurred and expenditure of capital nature is capitalized as fixed assets.

11) SEGMENT REPORTING:

The Company is engaged in manufacturing of textiles which in the context of Accounting Standard -17 " Segment Reporting" as notified under the Companies Accounting Standards Rules, 2006, is considered as the only business segment.

12) EARNING PER SHARE (EPS):

Calculation of earnings per share (EPS) in accordance with Accounting Standrard-20 " Earning Per Share" issued by Institute of Chartered Accountants of India".


Jun 30, 2013

1) Basis of Accounitng:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provision thereof.

2) Valuation of Inventories:

Inventory of Raw Material, Stores, Spares and Consumables are valued at cost. Cost is arrived at weighted Average method. Finished Goods and Semi Finished Goods are valued at cost of Raw Material at the respective units and conversion of these includes the cost incurred in the normal course of the business, in bringing the goods upto the present condition or net realizable value which is lower as accordance with the Accounting Standard-2 " Valuation of Inventories" issued by ICAI.

3) Depreciation:

In respect , of all the assets depreciation is provided on straight line basis applying the rates specified in Schedule XIV of the Companies Act, 1956. Further, depreciation on an asset, whose actual cost does not exceed Rs. 5000/- has been provided at the rate of 100%.

4) Revenue Recognition:

In accordance with the provision of Section 209(3) of the Companies Act, 1956 and in accordance with Accounting Standard -9 "Revenue Recognition", the Company follows accrual basis of accounting except in respect of interest on security deposit which is accounted for on Cash basis. Sales are invoiced on dispatch of goods to the customer.

5) Tangible Assets:

As per Accounting Standard -10" Accounting for Fixed Assets", Tangible assets are valued at cost less accumulated depre- ciation.

6) Intangible Assets:

Intangible assets are valued at cost

7) Foreign Exchange Transaction:

As per Accounting Standard -11 "The Effect of Change in Foreign Exchange Rate", current assets and current liabilities relat- ing to foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. Foreign currency contracts, outstanding at the close of the year has been accounted for at the exchange rate prevailing at the time of contract.

8) Employees Retirement Benefit:

Company''s contribution to Employees Provident Fund is charged to Profit & Loss account. Provision for leave Encashment & Gratuity has been provided for in accounts in Compliance with Accounting Standard -15 " Employee Benefits."

9) Investments:

All investments are valued at cost prices. Income from these investments is credited to revenue on accrual basis.

10) Research and Development Expenditure:

As per Accounting Standard – 26 " Intangible Assets" all revenue expenses pertaining to research and development are charged to the Profit and Loss Account in the year in which these are incurred and expenditure of capital nature is capitalized as fixed assets.

11) Segment Reporting:

The Company is engaged in manufacturing of textiles which in the context of Accounting Standard -17 " Segment Reporting" as notified under the Companies Accounting Standards Rules, 2006, is considered as the only business segment.


Jun 30, 2010

PRINCIPLES OF CONSOLIDAtION

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Limited (the Company) and its subsidiary companies viz. SLCL Overseas (FZC) and Shri Lakshmi Defence Solutions Limited. The Consolidated Financial Statements have been prepared on the following basis:

a) The Financial Statements of the Company and its subsidiary companies have been combined on a line-by- line basis adding together the book values of like items of assets, liabilities, income and expenses as per AS-21. The Consolidated Financial Statements as notifed under the companies Accounting Standards Rules, 2006.

b) The Financial Statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the Company i.e., 30th June, 2010.

c) The Consolidated Financial Statements have been prepared in accordance with AS-21. Accounting for Investments in Associate in Consolidated Financial Statements as per AS- 23 as notifed under the companies Accounting Standards Rules, 2006.

SIGNIFICANT ACCOUNTING POLICIES

The accounts are prepared under the historical cost convention and in accordance with the applicable accounting standards as notifed under the Companies (Accounting Standards) Rules, 2006, issued by The Institute of Chartered Accountants of India. The significant accounting policies are as follows:

1) FIXED ASSETS

Fixed assets are valued at cost.

2) DEPRECIATION

Depreciation has been provided on straight line method on all the fxed assets as per Schedule XIV of the Companies Act, 1956. Further, depreciation on an asset, whose actual cost does not exceed Rs. 5000/- has been provided at the rate of 100%.

3) VALUATION OF INVENTORIES

Inventory of Raw Material, Stores, Spares and Consumables are valued at cost. Cost is arrived at weighted Average method. Finished Goods and Semi Finished Goods are valued at cost of Raw Material at the respective units and conversion of these includes the cost incurred in the normal course of the business, in bringing the goods upto the present condition or net realizable value which is lower.

4) REVENUE RECOGNITION

In accordance with the provision of Section 209(3) of the Companies Act, 1956 and in accordance with AS-9, the Company follows accrual basis of accounting except in respect of interest on security deposit which is accounted for on receipt basis, Sales are invoiced on dispatch of goods to the customer.

5) FOREIGN EXCHANGE FLUCTUATION

As per AS-11, current assets and current liabilities relating to foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. Foreign currency contracts, outstanding at the close of the year has been accounted for at the exchange rate prevailing at the time of contract.

6) EMPLOYEES RETIREMENT BENEFIT

Companys contribution to Employees Provident Fund is charged to profit & Loss account. Provision for leave Encashment & Gratuity has been provided for in accounts in Compliance with AS-15.

7) CONTINGENT LIABILITIES

Contingent liabilities as shown in the notes to the accounts, may affect the future profitability to the extent they materialize for payment.

8) INVESTMENTS

All investments are valued at cost prices.


Jun 30, 2009

Not Available

 
Subscribe now to get personal finance updates in your inbox!