Home  »  Company  »  Suryajyoti Spg.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Suryajyoti Spinning Mills Ltd. Company

Mar 31, 2015

2.1 Basis of Preparation of Financial Statements

The Financial Statements have been prepared to comply in all material aspects with the Accounting Standards Specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014, and the relevant provisions of the Companies Act, 2013. The Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles in India under historical cost convention, accrual basis and on going concern concept.

2.2 Use of estimate

The preparation of financial statements in conformity with generally accepted accounting principles in India requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reported period. 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.

2.3 Fixed Assets and Depreciation

Tangible Assets are stated at original cost less accumulated depreciation. Cost of acquisition is inclusive of all costs incidental to acquisition, installation, commissioning and related pre-operative expenses and excluding recoverable taxes including interest paid on funds borrowed during construction period until the assets is put to commercial use.

The cost of the tangible asset will be adjusted after acquisition of such asset in accordance with increase or reduction in the liability of the company as expressed in Indian Currency for making payment towards the whole or a part of the cost of the asset or for repayment of the whole or part of monies borrowed by the company from any person directly or indirectly in any foreign currency specifically for the purpose of acquiring the asset (being in either case the liability existing immediately before the date on which the change in rate of exchange takes effect), the amount by which the liability is increased or reduced during the year shall be added to or as the case may be deducted from the cost, and the amount arrived at after such addition / deduction shall be taken to be the cost of the tangible asset.

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalised. Intangible assets are amortised over the useful life of the underlying assets.

Depreciation on Fixed Assets is provided on Straight Line Method (SLM) over the useful life of assets prescribed under Schedule II of Companies Act, 2013 except in case of weaving mill Plant and Machinery which are being depreciated over a period of useful life which is different from the period stated as per Schedule II, based on internal assessment and Independent Technical Evaluation.

2.4 Capital work in progress

Capital work-in-progress is stated at the amount expended upto the date of Balance Sheet for the cost of fixed assets that are not yet ready for their intended use. Expenditure (including financing cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as Pre-operative expenses pending allocation to the assets and are shown under "Capital work-in-progress".

2.5 Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined on the basis of value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in the carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

2.6 Investments

Long-term investments are stated at cost, less provision for permanent diminution in value. Current investments are stated at the lower of cost or market value.

2.7 Borrowing Costs

Borrowing cost relating to (i) funds borrowed for acquisition of qualifying fixed assets are capitalized till the date of commissioning and thereafter charged to the Statement of Profit and Loss and (ii) funds borrowed for other purposes are charged to the Statement of Profit and Loss in the period in which they are incurred.

2.8 CENVAT

CENVAT claimed on Capital Goods is credited to Plant & Machinery Account/Capital Work-in-Progress Account. CENVAT on purchases of Raw materials and other material is deducted from the cost of such materials.

2.9 Inventories

Inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventory comprises of purchase price, cost of conversion and other cost that have been incurred in bringing the inventories to their respective present location and condition. The valuations of various components of the Inventories are as under:

i) Raw Materials are valued on Weighted Average basis; Stores, Spares and Consumables are valued at FIFO basis and Cost includes applicable taxes, duties, transport and handling costs.

ii) Finished Goods are valued at cost or net realisable value whichever is lower. Cost is average cost and includes all material costs, direct and indirect expenditure.

iii) Work In Progress is valued at cost inclusive of Overheads.

iv) Realisable Wastes are valued at estimated net realisable value as the cost is not ascertainable.

2.10 Leases

Leases, where the lessor retains substantially all risks and rewards incidental to the ownership are classified as operating leases. Operating lease payments are recognised as an expense in statement of profit and loss on straight line basis over the lease term.

2.11 Revenue recognition

Revenue is recognised to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of goods are transferred to the customer and is stated net of trade discounts, sales returns but incluse of Sale Tax.

2.12 Other Income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. Export Incentives are accounted on accrual basis at the rates prevailing on the date of transaction and as specified in the Govt policy.

2.13 Retirement benefits:

Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard (AS 15 - Employee Benefits) notified under the Companies Act, 2013. Accordingly, the company has recognised the following three benefits.

i) Gratuity

The company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement or death while in employment or on termination of employment in an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plan of the company is an unfunded plan. The Company accounts for the liability for future gratuity benefits on the basis of an independent actuarial valuation.

ii) Providend Fund

In accordance with applicable local laws, eligible employees of the company are entitled to receive benefits under the provident fund, a defined contribution plan to which both the employee and employer contribute monthly at a determined rate. These contributions are either made to the respective Regional Provident Fund Commissioner or the Central Provident Fund under the state pension scheme and are expensed as incurred.

iii) Leave Encashment

The accrual for unutilised leave is determined for the entire available leave balances standing to the credit of the employees at the year end. The value of such leave balance eligible for carry forward, is determined at the year end and recognised in the statement of profit and loss.

2.14 Foreign Currency Transactions

(i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

(ii) Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. In case of monetary items, which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts has been recognized over the life of the contract.

(iii) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

(iv) In respect of forward exchange contracts in the nature of hedging

a) Premium or discount and exchange differences on the contracts is amortized over the term of the contract

b) Exchange differences on the contract are recognized as profit or loss in the period in which they arise.

(v) In respect of forward exchange contracts in the nature of speculation, the value of contract is marked to its current market value as at balance sheet and the gain or loss on contract is recognized.

2.15 Taxation

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax. Accordingly, MAT has been recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow for the company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting incomes that originate in one period are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or subsequently enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets and liabilities are set off if such items relate to taxes on income levied by the same governing tax laws and the company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

2.16 Earnings per share

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of any extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares.

2.17 Cash flow statement

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

2.18 Provisions, contingent liabilities and contingent assets

Provision is recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable.

A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recongnised because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognise Contingent Liability but disclose its existence in the Financial Statements.

A Contingent Asset is not recognized in the accounts as a matter of prudence.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

2.19 Provisions for bad and doubtful debts

The company is reviewing all the trade receivables, loans and advances and other receivables annually and makes provision every year on case by case basis.


Mar 31, 2014

1. Accounting Convention:

The Financial statements are prepared based on historical cost convention and in accordance with generally accepted accounting principles.

2. Fixed Assets:

Fixed Assets are stated at cost net of deprectiation provided in the statements. Costs of acquisitation of fixed assets is inclusive of all direct and indirect expenditure upto the date of commercial use.

Depreciation is provided on straight line method in accordance with the rates prescribed under Schedule XIV to the Companies Act,1956.

3. Inventories:

Inventories are valued at the lower of cost and net realisable value. The cost of Rawmaterials are computed by using weighted average method. Stores & Spares are computed by using FIFO method.

4. Derivative Transactions :

The company uses derivative financial instruments such principal only swaps for the purpose of cost reduction. In case of loss the transactions having protection are taken as contingent liability and where protection is knocked out has been written off to profit & loss a/c.

5. Investments:

Investments are stated at cost and diminution in the value, which is permanent in nature, is provided for. Investments are stated at cost or Net realisable value, which ever is lower.

6. Contingent Liabilities:

Liability in respect of contingent nature are mentioned by way of note to accounts and will be paid / provided on crystallisation.

7. Employee Benefits :

As per AS 15 Employee benefits - the disclosure of employee benefits as defined in the Accounting Standard are given Below :

Company''s contribution to PF determined under relevant statute and charged to Revenue. The gratuity contribution has been made on the basis of actuarial valuation determined under projected unit credit method. Liability for Leave encashment is provided for on the basis of the Accrued leaves at the close of the year.

8. Sales:

Sales Includes the amount receivable for goods sold including excise duty,sales tax and export incentives, which are recognised on accrual basis thereon and net of discounts.

9. Foreign Exchange Transactions:

Foreign currency transactions are recorded at the rates prevailing on the date of the transactions. The monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Balance Sheet date or at the rates of exchange fixed under contractual arrangements. Foreign currency assets and liabilities are stated at the rate of exchange prevailing at the year end and resultant gains / losses are recongnised in the Profit & Loss account

10. Accounting for Income Tax :

The Provision for taxation for the year, comprising of current tax and deferred tax 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 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.

11. Earnings Per Share:

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


Mar 31, 2012

1. Accounting Convention:

The Financial statements are prepared based on historical cost convention and in accordance with generally accepted accounting principles.

2. Fixed Assets:

Fixed Assets are stated at cost net of depreciation provided in the statements. Costs of acquisition of fixed assets is inclusive of all direct and indirect expenditure upto the date of commercial use.

Depreciation is provided on straight line method in accordance with the rates prescribed under Schedule XIV to the Companies Act,1956

3. Inventories:

Inventories are valued at the lower of cost and net realisable value. The cost of Rawmaterials are computed by using weighted average method. Stores & Spares are computed by using FIFO method.

4. Derivative Transactions :

The company uses derivative financial instruments such principal only swaps for the purpose of cost reduction. In case of loss the transactions having protection are taken as contingent liability and where protection is knocked out has been written off to profit & loss a/c

5. Investments:

Investments are stated at cost and diminution in the value, which is permanent in nature, is provided for. Investments are stated at cost or Net realisable value, which ever is lower.

6. Contingent Liabilities:

Liability in respect of contingent nature are mentioned by way of note to accounts and will be paid/provided on crystallisation.

7. Employee Benefits :

As per AS 15 Employee benefits - the disclosure of employee benefits as defined in the Accounting Standard are given Below :

Company's contribution to PF determined under relevant statute and charged to Revenue. The gratuity contribution has been made on the basis of actuarial valuation determined under projected unit credit method. Liability for Leave encashment is provided for on the basis of the Accrued leaves at the close of the year.

8. Sales:

Sales Includes the amount receivable for goods sold including excise duty,sales tax and export incentives, which are recognised on accrual basis thereon and net of discounts.

9. Foreign Exchange Transactions:

Foreign currency transactions are recorded at the rates prevailing on the date of the transactions. The monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Balance Sheet date or at the rates of exchange fixed under contractual arrangements. Foreign currency assets and liabilities are stated at the rate of exchange prevailing at the year end and resultant gains/losses are recognised in the Profit & Loss account.

10. Accounting for Income Tax:

The Provision for taxation for the year, comprising of current tax and deferred tax 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 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.

11. Earnings Per Share:

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


Mar 31, 2010

1. Accounting Convention:

The Financial statements are prepared based on historical cost convention and in accordance with generally accepted accounting principles.

2. Fixed Assets:

Fixed Assets are stated at cost net of deprectiation provided in the statements. Costs of acquisitation of fixed assets is inclusive of all direct and indirect expenditure upto the date of commercial use.

Depreciation is provided on straight line method in accordance with the rates prescribed under Schedule XIV to the Companies Act, 1956

3. Inventories:

Inventories are valued at the lower of cost and net realisable value. The cost of Rawmaterials are computed by using weighted average method. Stores & Spares are computed by using FIFO method.

4. Derivative Transactions :

The company uses derivative financial instruments such principal only swaps for the purpose of cost reduction. In case of loss the transactions having protection are taken as contingent liability and where protection is knocked out has been written off to profit & loss account.

5. Investments:

Investments are stated at cost and diminution in the value, which is permanent in nature, is provided for.

6. Contingent Liabilities:

Liability in respect of contingent nature are mentioned by way of note to accounts and will be paid / provided on crystallisation.

7. Employee Benefits :

As per AS 15 Employee benefits - the disclosure of employee benefits as defined in the Accounting Standard are given Below :

Companys contribution to PF determined under relevant statute and charged to Revenue. The gratuity contribution has been made on the basis of actuarial valuation determined under projected unit credit method. Liability for Leave encashment is provided for on the basis of the Accrued leaves at the close of the year.

8. Sales:

Sales represent the amount receivable for goods sold including excise duty and sales tax thereon and net of discounts . Incentives on export sales are recognised as income on accrual basis.

9. Foreign Exchange Transactions:

Foreign currency transactions are recorded at the rates prevailing on the date of the transactions. The monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Balance Sheet date or at the rates of exchange fixed under contractual arrangements. Foreign currency assets and liabilities are stated at the rate of exchange prevailing at the year end and resultant gains / losses are recongnised in the Profit & Loss account

10. Accounting for Income Tax :

The Provision for taxation for the year, comprising of current tax and deferred tax 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 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.

11. Lease Rentals :

Lease rentals in respect of leased equipment is being charged to the Profit & Loss account.

Find IFSC