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Accounting Policies of Suryaamba Spinning Mills Ltd. Company

Mar 31, 2015

1.01 Basis of accounting and preparation off manila 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the his tonal cost convention. The company generally follows mercantile system of accounting and recogm.es significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

1.02 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.03 Fixed assets

Fixed assets are earned at cost less accumulated depreciation. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.04 Depreciation and amortization

Depreciation on fixed Assets is calculated on as trough time basis using the ratesarnved at based on the useful lives estimated by the management or as per the rates prescribed under Schedule II of compares Act 2013 whichever is higher.

1.05 Inventories

Raw materials, Packing Materials, Stores and Spares are valued at cost net of VAT Credits ascertained on FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

1.06 Revenuer cognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following recognition criteria is applied before revenue is recognized:

Annexure Statement of Significant Accounting Policies And Practices

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods. The company collects sales tax and value added tax (VAT) on behalf of the government and therefore, these are not economic benefits flowing to the company hence, they are excluded from revenue during the year.

Interest on bank deposits

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income-m the statement of profit and loss.

1.07 Foreign Currency Transactions

Expenses and Income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities on the date of the balance sheet are restated at the exchange rate prevailing on the balance sheet date. Exchange rate differences arising on settlement of the transaction and on account of restatement of assets and liabilities are dealt with m Statement of Profit and Loss.

1.08 Employee Retirement and other benefits

Employees of the company are entitled to retirement benefits of Provident Fund, Gratuity, and Leave encashment.

a) Defined Contribution Plan:

Company's contribution paid/payable during the year to Provident Fund and Labour Welf are Fundare recognized the Profit and Loss Account.

b) Defined Benefit Plan: i. Gratuity

Gratuity is covered under the schemes of State Bank of India Life Insurance Company and premiums for such schemes are recognized the Profit and Loss Account.

At the reporting date, Company's liability towards gratuity is determined by independent actuarial valuation using the "Projected Unit Credit Method" which considers each pentode service giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gam and losses are recognized immediately the statement of Profit and Loss Account as income or expense.

ii. Leave Encashment

Liability on account of leave encashment has been provided on the basis of actual liability computed sat the year end.

1.09 Taxes on income

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable come and accounting comeat the rates that have been enacted

Annexure

Statement of Significant Accounting Policies And Practices

or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognized only if there 1S a reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

1.10 Provisions and Contingent liabilities

Provision is recognized when the company has legal/constructive obligation for which it is probable that cash outflow may be required and reliable estimate can be made of the amount of the obligation. Contingent Liabilities not provided for are indicated by way of a Note and will be paid/provided on crystallization of the liability.

1.11 Earnings per share(EPS):

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

1.12 Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized m the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.


Mar 31, 2014

1.1 Basis of accounting and 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.3 Fixed assets

Fixed assets are carried at cost less accumulated depreciation. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.4 Depreciation and amortization

Depreciation on fixed assets is provided on straight-line method at the rates specified and in the manner laid down in Schedule XIV to the Companies Act, 1956. Deferred revenue expenses are amortised over a period of five Years.

1.5 Inventories

Raw materials, Packing Materials, Stores and Spares are valued at cost net of VAT Credits ascertained on FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

1.6 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following recognition criteria is applied before revenue is recognized:

Annexure I

Statement of Significant Accounting Policies And Practices Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods. The company collects sales tax and value added tax (VAT) on behalf of the government and therefore, these are not economic benefits flowing to the company hence, they are excluded from revenue during the year.

Interest on bank deposits

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

1.7 Foreign Currency Transactions

Expenses and Income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities on the date of the balance sheet are restated at the exchange rate prevailing on the balance sheet date. Exchange rate differences arising on settlement of the transaction and on account of restatement of assets and liabilities are dealt with in Statement of Profit and Loss.

1.8 Employee Retirement and other benefits

Employees of the company are entitled to retirement benefits of Provident Fund, Gratuity, and Leave encashment.

a) Defined Contribution Plan:

Company''s contribution paid/payable during the year to Provident Fund and Labour Welfare Fund are recognized in the Profit and Loss Account.

b) Defined Benefit Plan:

i. Gratuity

Gratuity is covered under the schemes of State Bank of India Life Insurance Company and premiums for such schemes are recongnized in the Profit and Loss Account.

At the reporting date, Company''s liability towards gratuity is determined by independent actuarial valuation using the "Projected Unit Credit Method" which considers each period of service as giving raise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense.

ii. Leave Encashment

Liability on account of leave encashment has been provided on the basis of actual liability computed as at the year end.

1.9 Taxes on income

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable income and accounting income at the rates that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised only if there is a reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

1.10 Provisions and Contingent liabilities

Provision is recognized when the company has legal/constructive obligation for which it is probable that a cash outflow may be required and reliable estimate can be made of the amount of the obligation. Contingent Liabilities not provided for are indicated by way of a Note and will be paid/provided on crystallization of the liability.

1.11 Earnings per share (EPS):

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

1.12 Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.


Mar 31, 2013

1.1 Basis of accounting and 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.3 Fixed assets

Fixed assets are carried at cost less accumulated depreciation. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.4 Depreciation and amortization

Depreciation on fixed assets is provided on straight-line method at the rates specified and in the manner laid down in Schedule XIV to the Companies Act, 1956. Deferred revenue expenses are amortised over a period of five Years.

1.5 Inventories

Raw materials, Packing Materials, Stores and Spares are valued at cost net of VAT Credits ascertained on FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

1.6 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following recognition criteria is applied before revenue is recognized:

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods. The company collects sales tax and value added tax (VAT) on behalf of the government and therefore, these are not economic benefits flowing to the company hence, they are excluded from revenue during the year.

Interest on bank deposits

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

1.7 Foreign Currency Transactions

Expenses and Income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities on the date of the balance sheet are restated at the exchange rate prevailing on the balance sheet date. Exchange rate differences arising on settlement of the transaction and on account of restatement of assets and liabilities are dealt with in Statement of Profit and Loss.

1.8 Employee Retirement and other benefits

Employees of the company are entitled to retirement benefits of Provident Fund, Gratuity, and Leave encashment.

a) Defined Contribution Plan:

Company''s contribution paid/payable during the year to Provident Fund and Labour Welfare Fund are recognized in the Profit and Loss Account.

b) Defined Benefit Plan:

i. Gratuity

Gratuity is covered under the schemes of State Bank of India Life Insurance Company and premiums for such schemes are recognized in the Profit and Loss Account.

At the reporting date, Company''s liability towards gratuity is determined by independent actuarial valuation using the "Projected Unit Credit Method" which considers each period of service as giving raise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense.

ii. Leave Encashment

Liability on account of leave encashment has been provided on the basis of actual liability computed as at the year end.

1.9 Taxes on income

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable income and accounting income at the rates that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised only if diere is a resonable certainity that they will be realised and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

1.10 Provisions and Contingent liabilities

Provision is recognized when the company has legal/ constructive obligation for which it is probable that a cash outflow may be required and reliable estimate can be made of the amount of the obligation.

Contingent Liabilities not provided for are indicated by way of a Note and will be paid/provided on crystallization of the liability.

1.11 Earnings pet share (EPS):

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

1.12 Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.


Mar 31, 2012

1.1 Basis of accounting and 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

1.2 Change in accounting policy (Presentation and disclosure of financial statements)

During the year ended 31 March 2012, the Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the company for preparation and presentation of its financial statements. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has regrouped/reclassified the previous year figures wherever necessary in accordance with the requirements applicable in the current year.

1.3 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.4 Fixed assets

Fixed assets are carried at cost less accumulated depreciation. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.5 Depreciation and amortization

Depreciation on fixed assets is provided on straight-line method at the rates specified and in the manner laid down in Schedule XIV to the Companies Act, 1956. Deferred revenue expenses are amortized over a period of five Years.

1.6 Inventories

Raw materials, Packing Materials, Stores and Spares are valued at cost net of VAT Credits ascertained on FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

1.7 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following recognition criteria is applied before revenue is recognized:

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of the goods. The company collects sales tax and value added tax (VAT) on behalf of the government and therefore, these are not economic benefits flowing to the company hence, they are excluded from revenue during the year.

Interest on bank deposits

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

1.8 Foreign Currency Transactions

Expenses and Income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities on the date of the balance sheet are restated at the exchange rate prevailing on the balance sheet date. Exchange rate differences arising on settlement of the transaction and on account of restatement of assets and liabilities are dealt with in Statement of Profit and Loss.

1.9 Employee Retirement and other benefits

Employees of the company are entitled to retirement benefits of Provident Fund, Gratuity, and Leave encashment.

a) Defined Contribution Plan:

Company's contribution paid/payable during the year to Provident Fund and Labour Welfare Fund are recognized in the Profit and Loss Account.

b) Defined Benefit Plan:

i. Gratuity

Gratuity is covered under the schemes of State Bank of India Life Insurance Company and premiums for such schemes are recognized in the Profit and Loss Account. At the reporting date, Company's liability towards gratuity is determined by independent actuarial valuation using the "Projected Unit Credit Method" which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense.

ii. Leave Encashment

Liability on account of leave encashment has been provided on the basis of actual liability computed as at the year end.

1.10 Taxes on income

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable income and accounting income at the rates that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognized only if there is a reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

1.11 Provisions and Contingent liabilities

Provision is recognized when the company has legal/constructive obligation for which it is probable that a cash outflow may be required and reliable estimate can be made of the amount of the obligation. Contingent Liabilities not provided for are indicated by way of a Note and will be paid/provided on crystallization of the liability.

1.12 Earnings per share (EPS):

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

1.13 Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.


Mar 31, 2010

ACCOUNTING CONVENTION:

The Financial statements are prepared based on historical cost convention.

FIXED-ASSETS;

Tangible Fixed Assets are stated at cost net of depreciation as provided in the statements. Depreciation is provided on Straight line method as per Section 205 read with Schedule XIV of the Companies Act, 1956, on the basis of continuous process plant.

INYENTORIESi

Inventories are valued at the lower of cost and net realisable value. The Raw Materials and Stores and Spares are computed by using FIFO method.

FOREIGN EXCHANGE TRANSACTIONS:

Foreign currency transactions are recorded at the rates prevailing on the date of the transactions. Monetary assets and liabilites in foreign currency are translated at year end rate or at the rates of exchange fixed under contractual arrangments. Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense.

CONTINGENT LIABILITIES:

No liability is provided in respect of contingent liabilities, but only mentioned by way of note to accounts. SS^Su EN iofto Provident fund determined under the relavent statute and charged to revenue. The gratuity contribution has been made on the basis of acturial valuation under AS15 given by SBI life insurance Company.

The Liability for leave encashment is provided for on the basis of accrued leaves at the close of the year.

ACCOUNTING FOR INCOME TAX :

Current tax represents the amount that otherwise would have been payable under the Income-tax Act, 1961, had the financial year been reckoned as the basis for computation of tax payable under the prevailing tax laws.

DEFERRED INCOME TAX :

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

MISCELLANEOUS EXPENDITURE :

Preliminary expenses are amortised over a period of ten years in equal instalments.

SALES:

Sales represent the amount realised or realisable for goods sold including freight and sales tax thereon.

 
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