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Accounting Policies of Tamil Nadu Jaibharat Mills Ltd. Company

Mar 31, 2015

The financial statements of the Company are prepared under the historical cost convention, on an accrual basis, in accordance with the Generally Accepted Accounting Principles and the provisions of the companies Act,1956 as adopted Consistently by the company

2) Inventories :AS-2

Inventories are valued in consistent with earlier years as under:

Raw Materials - At cost

Stock-in-Process - Raw Material Conversion Cost

Finished Goods - At contract rate (Net)

Waste - At contract rate

Stores and Packing Materials - At cost (on the basis of FIFO method)

3) Depreciation/Amortization : AS:6

Depreciation is provided on Straight Line Method on prorate basis at the rates prescribed in schedule XIV to the Companies Act, 1956 and not as per the provisions of Schedule II of the Companies Act 2013.

4) Revenue Recognition :AS-9

Income and expenditure are accounted on accrual basis.

5) Fixed Assets:AS-10

Fixed Assets are shown at cost less depreciation except land. Cost comprises of cost of acquisition, erection expenses and other incidental expenses directly/indirectly contributed to the cost of the assets excluding cenvat/TNVAT.

6) Foreign Currency Transaction :AS-11

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of negotiation.

7) EmployeesBenefits:-AS-15

Company's Contributions to PF, ESI, EDLI etc., made to the appropriate authorities have been recognized in the Profit & Loss Account. The outstanding liability towards provision for gratuity as per the actuarial valuation is Rs.1,27,70,045/-. So far a provision of Rs.40,55,627/-has been made and a sum of Rs.30,34,513/- has been paid to the LIC Group Gratuity Scheme. No provision has been made towards gratuity liability in the current year.

Leave Encashment:

As per the Rules and Regulations of the Company the eligible leave salary is paid on cash basis within the accounting year.

Bonus:

Bonus is accounted on Cash Basis

8) PENDING LITIGATIONS:

a) Provident Fund

The Company received a demand order dated 19.04.2011 for Rs.56,48,795/= from PF Commissioner, being the contribution payable for omitted wages for the period from April 2009 to December 2009. Against this order the company has filed a stay petition and an Appeal before the Employees Provident Fund Appellate Tribunal, New Delhi. The said forum passed its order on 06.07.2011 directing to deposit 30% of the disputed amount and the company has paid Rs.1694639/=.

The Company also had preferred a stay petition against the demand order dated 19.04.2011 before the Honourable Madurai Bench of the Madras High Court which granted a stay order on 22.03.2012 directing the company to deposit 50% of the disputed amount less the amount already deposited before the Appellate authority within a period of 4 weeks. The Company has written a letter to the PF Office stating that the amount already deposited i.e Rs.16,94,639/= will cover the 50% amount if effect is given to the Tribunal order and is awaiting reply from the concerned authority. Adjudication still pending at Honourable Madurai Bench of the Madras High Court.

The company received a demand order dated 26.04.2012 for Rs.9907086/= from PF Commissioner being he contribution payable for omitted wages for the period from January 2010 to June 2011. Against this order the company has filed a stay petition and an appeal before the Employees provided fund appellate tribunal, New Delhi. The said forum passed its order on 31.05.2012 directing to deposit50% of the disputed amount.

The company also had preferred a writ petition against the demand order dated 26.04.2012 before the Honourable Madurai Bench of Madras High Court which directed on 21.06.2012 to deposit 50% of the disputed amount before 01.09.2012. The company has paid Rs.4953543/= on 28.08.2012 which will cover the 50% amount and informed to PF Office as well as Appellate Tribunal New Delhi and adjudication is still pending at PF Appellate Tribunal, New Delhi

b) Sales-Tax

Sales tax Assessments have been completed upto the year ended 31.03.2008. The following liabilities are disputed in appeal and the management is in confidence of success in appeal and hence no provision has been made.

YFAR ENDED TAX PENALTY

TNGST CST TNGST CST

31.03.1999 1,44,771

31.03.2000 1,63,198

31.03.2004 12,86,570

2004-2005 24,43,232

2006- 2007 35,65,728

2007- 2008 20,56,561

9) lnterestonBorrowings:AS16

The company is following AS -16 with regard to the treatment of borrowing costs. But there are no borrowing costs to be capitalised during the year..

10) Segment Financials as perAS-17 recommended by the Institute of Chartered Accountants of India.

The company operates in a single primary business segment namely manufacture of cotton yarn. Hence no separate disclosure is required.

Sales revenue by geographical market is given as under:

Market 2014-2015 2013-2014 (Rs. in lakhs) (Rs.in lakhs)

Asia 517.62 527.70

Europe 587.65 442.57

United Kingdom 25.58 52.84

India 8071.08 8034.32

9201.93 9057.43

11)Related Party Disclosures as per AS-18 recommended by Institute of Chartered Accountants of India

Reporting entity : Tamilnadu JaiBharath Mills Limited

List of related parties

Associate Companies : ShriRamalinga Mills Ltd., Aruppukottai

Harshni Textiles Mills Ltd., Anamalai Lakshmi Electrical Drives Ltd., Textile Division - Sunspintex, Anamalai

Aruppukottai shri Ramalinga Spinners, Private Ltd, Aruppukottai

Individuals/Firms : T.R.Dhinakaran D.Nirmala

Manoj kumar Kedia .Kedia Enterprises T.Balakumar.Texcones,Sankarankoil. Nirmala & Company Sri Ramasamy&company

Key Management Personnel : Sri T.R.Dhinakaran, CMD

Sri.DSenthilKumar, Executive Dirctor.

Sri.V.N.Kittappa Company Secretary

13) Disclosure regarding lease transactions: AS-19

The Company has not purchased any asset either on financial lease or on operating lease during the year.

15) Deferred Tax Asset/Liability: (AS-22)

Deferred tax resulting from timing differences between book and taxable profit is accounted for using the tax rates in force as on the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is reasonable certainty that the asset will be realised in future.

16) Impairmentof Assets(AS-28)

In the opinion of the company, the recoverable amount of the fixed assets of the company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.




Mar 31, 2012

1.1 Accounting Convention

The financial statements of the Company are prepared under the historical cost convention, on an accrual basis, in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified by the Government of India / Issued by the Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies Act, 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Presentation and disclosure of financial statements

For the year ended 31st 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. Though adoption of revised schedule VI does not impact recognition and measurement principles followed, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

An asset has been classified as current when it satisfies any of the following criteria;

a) It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used settle a liability for at least twelve months after the reporting date.

A liability has been classified as current when it satisfies any of the following criteria;

a) It is expected to be. settled in the Company's normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. All other assets and liabilities have been classified as non-current.

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) as of the date of the financial statements and the reported income and expenses like provision for employee benefits, provision for doubtful trade receivables/advances/contingencies, provision for warranties, allowance for slow/non-moving inventories, useful life of fixed assets, provision for retrospective price increases on purchases, provision for taxation, etc., during the reporting year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

3) Depreciation: AS-6

Depreciation has been provided on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act 1956.

4) Revenue Recognition :AS-9

Income and expenditure are accounted on accrual basis.

5) Fixed Assets: AS-10

Fixed Assets are shown at cost less depreciation except land and capital work in progress. Cost comprises of cost of acquisition- erection expenses and other incidental expenses directly/indirectly contributed to the cost of the assets.

6) Foreign Currency Transaction :AS-11

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of negotiation, Exchange difference between the rates applicable if any at the date of the transaction and the rates actually realised has been included in the respective revenue and expense head.

At the year end current liabilities in Foreign Currency are accounted as per fhe rates prevailing on the Balance Sheet date and the exchange differences if any are recognised as expenditure in statement of Profit and Loss Account.

7) Employees Benefits:- AS-15

Company's Contributions to PF, ESI, EDLI etc., made to the appropriate authorities have been recognized in the Profit & Loss Account. The Company has not made any provision for accruing liability for Gratuity payable to its employees. Gratuity payable will be accounted as and when payments are made and as such liability has not been ascertained.

Provident Fund

The Company received a demand order dated 19.04.2011 for Rs.56,48,795/= from PF Commissioner, being the contribution payable for omitted wages for the period from April 2009 to December 2009. Against this order the company has filed a stay petition and an Appeal before the Employees Provident Fund Appellate Tribunal, New Delhi. The said forum passed its order on 06.07.2011 directing to deposit 30% of the disputed amount and the company has paid Rs. 1694639/=.

The Company also had preferred a stay petition against the demand order dated 19.04.2011 before the Honourable Madurai Bench of the Madras High Court which granted a stay order on 22.03.2012 directing the company to deposit 50% of the disputed amount less the amount already deposited before the Appellate authority within a period of 4 weeks. The Company has written a letter to the PF Office stating that the amount already deposited i.e Rs. 16,94,639/= will cover the 50% amount if effect is given to the Tribunal order and is awaiting reply from the concerned authority.

8) Interest on Borrowings: AS 16

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitaiised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

9) Segment Financials as per AS-17 recommended by the Institute of Chartered Accountants of India.

The company operates in a single primary business segment namely manufacture of cotton yarn. Hence no separate disclosure is required.

10) Related Party Disclosures as per AS-18 recommended by Institute of Chartered Accountants of India

Reporting entity

Tamilnadu Jai Bharath Mills Limited

List of related parties

Associate Companies

Shri Ramalinga Mills Ltd.,

Aruppukottai

Harshni Textiles Mills Ltd., Anamalai

Lakshmi Electrical Drives Ltd.,

Textile Division - Sunspintex, Anamalai

Anjppukottai Shri Ramalinga Spinners Pvt.Ltd., -

Aruppukottai

Sri Jayajothi & Co.Ltd.,

O.E.Division,

Virudhunagar

Sri Jayajothi Textiles Mills Pvt.Ltd.,

Keelarajakularaman,

Rajapalayam

Individuals/Firms

SriT.R.Dhinakaran

SmtD.Nirmala

Kedia Enterprises

Nirmala & Company

Key Management Personnel

Sri D.Senthilkumar,

Managing Director.

12) 1. Disclosure regarding lease transactions: AS-19

The Company has not purchased any asset either on financial lease or on operating lease during the year.

14)Deferred Tax Asset/Liability: (AS-22)

Deferred tax resulting from timing differences between book and taxable profit is accounted for using the tax rates in force as on the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is reasonable certainty that the asset will be realised in future.

15) Impairment of Assets (AS-28)

In the opinion of the company, the recoverable amount of the fixed assets of the company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.


Mar 31, 2010

1) Accounting Policies: AS-1

The financial statements are prepared on historical cost convention on accrual basis and on a going concern concept. The accounts have been drawn in accordance with the Accounting Standards referred to in Sub- Section (3C) of Section 211 of the Companies Act, 1956.

2) Inventories :AS-2

Inventories are valued as under:

Raw Materials - At cost

Stock-in-Process - At cost

Finished Goods - At contract rate (Net)

Waste - At contract rate

Stores and Packing Materials - At cost (on the basis of FIFO method)

3) Depreciation :AS-6

Depreciation has been provided on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act 1956.

4) Revenue Recognition :AS-9

Income and expenditure are accounted on accrual basis.

5) Fixed Assets:AS-10

Fixed Assets are shown at cost less depreciation except land and capital work in progress. Cost comprises of cost of acquisition, erection expenses and other incidental expenses directly/indirectly contributed to the cost of the assets.

6) Foreign Currency Transaction :AS-11

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of negotiation.

Exchange difference between the rates applicable if any at the date of the transaction and the rates actually realised has been included in the respective revenue and expense head.

At the year end current liabilities in Foreign Currency are accounted as per the rates prevailing on the Balance Sheet date and the exchange differences if any are recognised as expenditure in Profit and Loss Account.

7) Employees Benefits:- AS-15

Companys Contributions to PF, ESI, EDLI etc., made to the appropriate authorities have been recognized in the Profit & Loss Account. Approved Gratuity Fund has been established and contributions to that fund are being made through LIC.

The company has made a provision towards gratuity for a sum of Rs.8,52,513/- in this year. On the basis of Actuarial Valuation furnished by LIC for this Account, the Total accrued gratuity is Rs.98,07,662/- against which the company has made a provision of Rs.30,34,513/- only upto this year.

8) Interest on Borrowings: AS 16

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

 
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