Home  »  Company  »  Valson Ind. Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Valson Industries Ltd. Company

Mar 31, 2015

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles and materially comply with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006 and relevant provisions of Companies Act 2013.

2.2 USE OF ESTIMATES:

The presentation of financial statements is in conformity with the generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the period in which results are known/materialised.

2.3 REVENUE RECOGNITION:

Sales includes sale of waste yarn and excise duty but excludes discount. Sales are accounted on despatch of goods to customers.

2.4 FIXED ASSETS:

Tangible Assets:

The tangible assets are stated at their original cost less accumulated depreciation and impairment loss, if any. In the case of tangible assets acquired for New project, interest cost on borrowings and other related expenses incurred up to the date of completion of project or commencement of commercial production are capitalised.

Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

2.5 IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is greater than the assets net selling price and value in use. During the year there is no impairment of the assets.

2.6 INVESTMENT:

Long Term Investments are stated at cost in accordance with the Accounting Standard on "Accounting for Investments" (AS - 13) notified by the Companies (Accounting Standards) Rules 2006.

2.7 INVENTORIES:

i) Raw Materials are valued at cost determined on First in First out (FIFO) Method.

ii) Finished Goods are valued at cost or net realisable value whichever is lower.

iii) Stores and Spares, Fuel & Packing Materials are valued at cost.

2.8 DEPRECIATION, AMORTISATION Tangible Assets:

Depreciation on Fixed Assets is provided using Straight Line Method on basis of useful life as specified in Schedule II of the Companies Act, 2013.

Intangible Assets:

Computer Software is amortised over a period of 5 years as per AS 26 "Intengible Assets".

2.9 BORROWING COST:

Borrowing costs consists of interest and other cost that the company incurs in connection with the borrowing of funds. Financing Cost relating to borrowed funds attributable to constructions and acquisition of fixed assets for the period upto the completion of construction or acquisition of fixed assets are included in the cost of the assets to which they relate.

2.10 EMPLOYEE BENEFITS:

Short term employee benefits:

All employee benefits falling due wholly within 12 months of rendering the services are classified as short term employee benefits and are recognised as an expenses in the period in which the employee renders the related services.

Post - Employment benefits:

Defined Contribution Plan

The company's contribution towards the provident fund and the social securities for certain eligible employees are considered to be defined contribution plans as the company does not carry any further obligations apart from the contributions made on a monthly basis.

Defined Benefit Plan

The company's liability for gratuity is determined using the Projected Unit Credit Method with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profit and loss.

The employees of the company are entitled to be compensated absences and leave encashment as per the policy of the company, the liability in respect of which is provided on an accrual basis.

2.11 TAXES ON INCOME:

Provision for taxation has been made in accordance with the applicable income tax laws prevailing for the relevant assessment year.

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

2.12 EXCISE DUTY:

The Company is following the method of accounting according to which the excise duty is generally booked as a liability at the time of removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn and paid accordingly.

The Company has opted for optional excise duty of either to take cenvat credit on input and payment of excise duty on removal of goods and accordingly provision for excise duty on closing stock as on 31st March, 2015 of Rs. 0.06 Lacs (Previous year Rs. NIL ) has been made for the same.

2.13 CENVAT:

Cenvat Credit on excise duty paid on inputs and capital assets is accounted for by reducing from the purchase cost of the related inputs or the capital assets, as the case may be as per the option granted under the Excise Act.

2.14 TRANSACTIONS IN FOREIGN CURRENCY:

Revenue transactions made in foreign currency are translated at the applicable prevailing exchange rate. Payments / Receipts made in foreign currency are translated at the applicable rate prevailing on the date of remittance. Any exchange gain / loss arising on settlement of such transactions are accounted for in the statement of profit and loss. Outstanding balance is translated at the exchange rate prevailing at the closing date. Any exchange gain or loss arising out of such restatement is accounted for in the statement of profit and loss.

Premiums or discounts arising at the inception of the forward foreign exchange contracts, other than contracts to hedge a firm commitment or a highly probable forecast transaction, are amortised and recognised in the Statement of Profit and Loss over the period of the contract. Exchange differences are recognised in the Statement of Profit and Loss.

2.15 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.16 GOVERNMENT GRANTS, SUBSIDIES:

Government grants in the nature of TUF's Interest subsidy on the Rupee Term Loan availed from the Banks under the Technology Upgradation Fund Scheme @5% on the balance outstanding, is reduced from the finance cost of the relevant Term Loan. In view of the uncertainty of the final quantum of subsidy and its receipt the interest subsidy is being accounted on receipt basis.

2.17 SEGMENT REPORTING:

As the Company's business activity falls within a single business segment viz. 'Yarns' and the sales substantially being in the domestic market, the financial statements are reflective of the information required by Accounting Standard 17 "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006.

2.18 EARNINGS PER SHARE:

Basic earnings per share has been calculated by dividing the profit after tax by the weighted average number of equity shares outstanding during the year.

(iii) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash, bonus shares and shares bought back for the period of 5 years immediately preceding the Balance Sheet date:

Bonus (1 : 1) Equity shares allotted on 9th December 2009

Term Loan - Security:

Term Loans other than for Silli - Unit

Secured by First charge on Pari Passu basis with IDBI and 2nd Pari passu charge basis with BOI of Immovable properties situated at Vapi unit. The loans are further secured by Hypothecation of Movable assets of the company both present and future (save and except Book debts) except for Silli - Unit and subject to prior charge on certain movable assets created in favour of Bank of India for securing working capital facilities and personal guarantee of two directors.

Term Loan for Silli - Unit

Secured by Exclusive charge in favour of BOI of Immovable properties situated at Silli - Unit. The loan is further secured by Hypothecation of Movable assets of the company both present and future (save and except Book debts) of Silli - Unit and personal guarantee of two directors.

Vehicle Loan - Security:

Secured by hypothecation of specific assets

Security:

a) Secured by First charge on Current Assets including Stocks and Book debts and Personal Guarantee of two directors.

b) Secured by second charge on Pari Passu basis on all fixed Assets of existing units of company in Vapi except Silli - Unit.

* Office Premises includes Rs. 250/- being the cost of five shares of Rs. 50/- each of Mittal Industrial Premises.

** Software to be amortised over a period of Five years due to applicability of AS - 26 on Intangible Assets.

# Based on the transitional provision provided in note 7(b) of schedule II of Companies Act 2013 an amount of Rs. 36.72 Lacs (Net of Deferred Tax)has been adjusted against the retained earnings where the useful life of the assets has become NIL in terms of the said schedule.


Mar 31, 2014

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles and materially comply with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006.

1.2 USE OF ESTIMATES:

The presentation of financial statements is in conformity with the generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the period in which results are known/materialised.

1.3 REVENUE RECOGNITION:

Sales includes sale of waste yarn and excise duty but exclude discounts. Sales are accounted on despatch of goods to customers.

1.4 FIXED ASSETS:

Tangible Assets:

The tangible assets are stated at their original cost less accumulated depreciation and impairment loss, if any. In the case of tangible assets acquired for New project, interest cost on borrowings and other related expenses incurred up to the date of completion of project or commencement of commercial production are capitalised.

Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

1.5 IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is greater than the assets net selling price and value in use. During the year there is no impairment of the assets.

1.6 INVESTMENT:

Long Term Investments are stated at cost in accordance with the Accounting Standard on "Accounting for Investments (AS - 13)" notified by the Companies (Accounting Standards) Rules 2006.

1.7 INVENTORIES

i) Raw Materials are valued at cost determined on First in First out (FIFO) Method.

ii) Finished Goods are valued at cost or net realisable value whichever is lower.

iii) Stores and Spares, Fuel & Packing Materials are valued at cost.

1.8 DEPRECIATION. AMORTISATION Tangible Assets:

Depreciation is provided on a Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis with reference to the month of addition in respect of assets except for Texturising machines on which depreciation has been provided as per the useful life of the machines as estimated by the management which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

Intangible Assets:

Computer Software is amortised over a period of 5 years.

1.9 BORROWING COST:

Borrowing costs consists of interest and other costs that the company incurs in connection with the borrowing of funds.

Financing Cost relating to borrowed funds attributable to constructions and acquisition of fixed assets for the period upto the completion of construction or acquisition of fixed assets are included in the cost of the assets to which they relate.

1.10 EMPLOYEE BENEFITS:

Short term employee benefits

All employee benefits falling due wholly within 12 months of rendering the services are classified as short term employee benefits and are recognised as an expenses in the period in which the employee renders the related services.

Post - Employment benefits - Defined Contribution Plan

The company''s contribution towards the provident fund and the social securities for certain eligible employees are considered to be defined contribution plans as the company does not carry any further obligations apart from the contributions made on a monthly basis.

Defined Benefit Plan

The company''s liability for gratuity is determined using the Projected Unit Credit Method with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profit and loss.

The employees of the company are entitled to be compensated absences and leave encashment as per the policy of the company, the liability in respect of which is provided on an accrual basis.

1.11 TAXES ON INCOME:

Provision for taxation has been made in accordance with the applicable Income Tax laws prevailing for the relevant assessment year.

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

1.12 EXCISE DUTY:

The Company is following the method of accounting according to which the excise duty is generally booked as a liability at the time of removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn and paid accordingly.

The Company has opted for optional excise duty of either to take cenvat credit on input and payment of excise duty on removal of goods and accordingly provision for excise duty on closing stock as on 31st March, 2014 of Rs. Nil (Previous year Rs. 0.46 Lacs) has been made for the same.

1.13 CENVAT:

Cenvat Credit on excise duty paid on inputs and capital assets is accounted for by reducing from the purchase cost of the related inputs or the capital assets, as the case may be as per the option granted under the Excise Act.

1.14 TRANSACTIONS IN FOREIGN CURRENCY:

Revenue transactions made in foreign currency are translated at the applicable prevailing exchange rate. Payments / Receipts made in foreign currency are translated at the applicable rate prevailing on the date of remittance. Any exchange gain / loss arising on settlement of such transactions are accounted for in the statement of profit and loss. Outstanding balance is translated at the exchange rate prevailing at the closing date. Any exchange gain or loss arising out of such restatement is accounted for in the statement of profit and loss.

Premiums or discounts arising at the inception of the forward foreign exchange contracts, other than contracts to hedge a firm commitment or a highly probable forecast transaction, are amortised and recognised in the Statement of Profit and Loss over the period of the contract. Such forward foreign exchange contract outstanding as at the Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange differences are recognised in the Statement of Profit and Loss.

1.15 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

1.16 GOVERNMENT GRANTS, SUBSIDIES:

Government grants in the nature of TUF''s Interest subsidy on the Rupee Term Loan availed from the Banks under the Technology Upgradation Fund Scheme @5% on the balance outstanding, is reduced from the finance cost of the relevant Term Loan. In view of the uncertainty of the final quantum of subsidy and its receipt the interest subsidy is being accounted on receipt basis.

1.17 SEGMENT REPORTING:

As the Company''s business activity falls within a single business segment viz. ''Yarns'' and the sales substantially being in the domestic market, the financial statements are reflective of the information required by Accounting Standard 17 "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006.

1.18 EARNINGS PER SHARE:

Basic earnings per share has been calculated by dividing the profit after tax by the weighted average number of equity shares outstanding during the year.

Term Loan - Security: Term Loans other than for Silli - Unit

(Secured by First charge on Pari Passu basis between BOI & IDBI on Immovable properties situated at various manufacturing locations except for Silli - Unit. The loans are further secured by Hypothecation of Movable assets of the company both present and future (save and except Book debts) except for Silli - Unit and subject to prior charge on certain movable assets created in favour of Bank of India for securing working capital facilities and personal guarantee of two directors.)

Term Loan for Silli - Unit

(Secured by First charge in favour of BOI on Immovable properties situated at Silli - Unit. The loan is further secured by Hypothecation of Movable assets of the company both present and future (save and except Book debts) of Silli - Unit and personal guarantee of two directors.)

Vehicle Loan - Security: (Secured by hypothecation of specific assets)

Security Working Capital Facility

a) Secured by First charge on Current Assets including Stocks and Book debts and Personal Guarantee of two directors.

b) Secured by second charge on Pari Passu basis on all fixed Assets of existing units of company in Silvassa and Vapi except Silli - Unit.

* Office Premises includes Rs. 250/- being the cost of five shares of Rs. 50/- each of Udit Mittal Industrial Premises. ** Software to be amortised over a period of Five years due to applicability of AS - 26 on Intangible Assets issued by Institute of Chartered Accountants of India.


Mar 31, 2013

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles and materially comply with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006.

1.2 USE OF ESTIMATES:

The presentation of financial statements is in conformity with the generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the period in which results are known/materialised.

1.3 REVENUE RECOGNITION:

Sales includes sale of waste yam and excise duty but exclude discounts. Sales are accounted on despatch of goods to customers.

1.4 FIXED ASSETS:

The Fixed Assets are stated at their original cost less accumulated depreciation. In the case of Fixed Assets acquired for New project, interest cost on borrowings and other related expenses incurred up to the date of completion of project or commencement of commercial production are capitalised.

1.5 INVENTORIES:

i) Raw Materials are valued at cost determined on First in First out (FIFO) Method. ii) Finished Goods are valued at cost or net realisable value whichever is lower. iii) Stores and Spares, Fuel & Packing Materials are valued at cost.

1.6 DEPRECIATION:

Depreciation is provided on a Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis with reference to the month of addition in respect of assets.

The company is providing incremental depreciation on Texturising machines due to shortening of its useful life on account of technological changes.

1.7 BORROWING COST:

The borrowing cost has been treated in accordance with the Accounting Standard on Borrowing Cost (AS - 16) issued by ICAI.

1.8 RETIREMENT BENEFITS:

Liability for gratuity is determined on the basis of actuarial valuation as at the end of accounting year. Leave encashment is determined on accrual basis and the liability for the unutilised leave is provided for as at the end of the accounting year.

1.9 TAXES ON INCOME:*

Provision for taxation has been made in accordance with the applicable income tax laws prevailing for the relevant assessment year.

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

1.10 EXCISE DUTY:

The Company is following the method of accounting according to which the excise duty is generally booked as a liability at the time of removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn and paid accordingly.

The Company has opted for optional excise duty of either to take cenvat credit on input and payment of excise duty on removal of goods and accordingly provision for excise duty on closing stock as on 31st March, 2013 Rs. 0.46 Lacs (Previous year Rs. 0.39 Lacs) has been made for the same.

1.11 CENVAT:

Cenvat Credit on excise duty paid on inputs and capital assets is accounted for by reducing from the purchase cost of the related inputs or the capital assets, as the case may be as per the option granted under the Excise Act.

1.12 TRANSACTIONS IN FOREIGN CURRENCY:

Revenue transactions made in foreign currency are translated at the applicable prevailing exchange rate. Payments / Recipts made in foreign currency are translated at the applicable rate prevailing on the date of remittance. Outstanding balance is translated at the exchange rate prevailing at the closing date. Any exchange gain or losses arising out of the subsequent fluctuation are accounted for in the profit & loss account.

Premiums or discounts arising at the inception of the forward foreign exchange contracts, other than contracts to hedge a firm commitment or a highly probable forecast transaction, are amortised and recognised in the Statement of Profit and Loss over the period of the contract. Such forward foreign exchange contract outstanding as at the Balance Sheet date are converted at the exchange rates revailing on that date. Exchange differences are recognised in the Statement of Profit and Loss.

1.13 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSET:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are dis closed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

1.14 IMPAIRMENT OF ASSETS:

The Company have assessed that on the Balance Sheet date there are no assets which requires provision for impairment.

1.15 INVESTMENT:

Long Term Investments are stated at cost in accordance with the Accounting Standard on " Accounting for investments (AS - 13) notified by the Companies (Accounting Standards) Rules 2006.

1.16 GOVERNMENT GRANTS, SUBSIDIES:

Government grants in the nature of TUF''s Interest subsidy on the Rupee Term Loan availed from the Banks under the Technology Upgradation Fund Scheme @5% on the balance outstanding, is reduced from the finance cost of the relevant Term Loan.

1.17 EMPLOYEE BENEFITS:

i. Provident Fund:

Eligible employees of the Company receive benefits under the Provident Fund which is a defined contribution plan wherein both the employee, and the Company make monthly contributions equal to specified percentage of the covered employees'' salary. These contributions are made to the Funds administered and managed by the Govt, of India. The Company''s monthly contributions are charged to revenue in the period they are incurred.

ii. Gratuity:

In accordance with the payment of ''Gratuity Act, 1972'' of India, the Company provided for gratuity, a defined retirement benefit plan (the Gratuity Plan'') covering eligible employees. Liabilities with regards to such Gratuity Plan are determined by actuarial valuation and are charged to revenue in the period determined.

"The actual assumptions is arriving at the provision of gratuity liabilities which are as follows:

a) Mortality Rate LIC (1994-96)

b) Discounting Rate 8.25%

c) Salary Escalation 6.0%

d) Retirement Age 60

iii. Provision for Unutilized Leave

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at period-end and charged to revenue in the period determined.

1.18 SEGMENT REPORTING:

As the Company''s business activity falls within a single business segment viz. ''Yarns'' and the sales substantially being in the domestic market, the financial statements are reflective of the information required by Accounting Standard 17 "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006.

1.19 EARNINGS PER SHARE:

Basic earnings per share has been calculated by dividing the profit after tax by the weighted average number of equity shares outstanding during the year.


Mar 31, 2012

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles and materially comply with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006.

1.2 USE OF ESTIMATES:

The presentation of financial statements is in conformity with the generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known materialised.

1.3 REVENUE RECOGNITION:

Sales includes sale of waste yam and excise duty but exclude discounts. Sales are accounted on despatch of goods to customers.

1.4 FIXED ASSETS:

The Fixed Assets are stated at their original cost less accumulated depreciation. In the case of Fixed Assets acquired for New project, interest cost on borrowings and other related expenses incurred up to the date of completion of project or commencement of commercial production are capitalised.

1.5 INVENTORIES:

i) Raw Materials are valued at cost determined on First in First out (FIFO) Method.

ii) Finished Goods are valued at cost or net realisable value whichever is lower.

iii) Stores and Spares, Fuel & Packing Materials are valued at cost.

1.6 DEPRECIATION:

Depreciation is provided on a Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis with reference to the month of addition in respect of assets.

The company is providing incremental depreciation on Texturising machines due to shortening of its useful life on account of technological changes.

The borrowing cost has been treated in accordance with the Accounting Standard on Borrowing Cost (AS - 16) issued by ICAI. During the year, there were no borrowings attributable to qualifying assets and hence, no borrowing cost has been capitalized.

1.7 RETIREMENT BENEFITS:

Liability for gratuity is determined on the basis of actuarial valuation as at the end of accounting year. Leave encashment is determined on accrual basis and the liability for the unutilised leave is provided for as at the end of the accounting year.

1.8 TAXES ON INCOME:

Provision for taxation has been made in accordance with the applicable income tax laws prevailing for the relevant assessment year.

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

1.9 EXCISE DUTY:

The Company is following the method of accounting according to which the excise duty is generally booked as a liability at the time of removal of manufactured goods i.e. Texturised Yarn, Twisted & Dyed Yarn and paid accordingly.

The Company has opted for optional excise duty of either to take cenvat credit on input and payment of excise duty on removal of goods and accordingly provision for excise duty on closing stock as on 31st March,2012 Rs. 0.39 Lacs (Previous year Rs.Nil) has been made for the same.

1.10 CENVAT;

Cenvat Credit on excise duty paid on inputs and capital assets is accounted for by reducing from the purchase cost of the related inputs or the capital assets, as the case may be as per the option granted under the Excise Act.

1.11 TRANSACTIONS IN FOREIGN CURRENCY:

Revenue transactions made in foreign currency are translated at the applicable prevailing exchange rate. Gain/Loss arising out of fluctuation in exchange rate is accounted for on realisation.

Payments made in foreign currency are translated at the applicable rate prevailing on the date of remittance. Outstanding liability is translated at the exchange rate prevailing at the closing date.

Any exchange gain or losses arising out of the subsequent fluctuation are accounted for in the profit & loss account

1.12 PROVISIONS. CONTINGENT LIABILITY AND CONTINGENT ASSET:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements

1.13 IMPAIRMENT OF ASSETS:

The Company have assessed that on the Balance Sheet date there are no assets which requires provision for impairment.

1.14 INVESTMENT:

Long Term Investments are stated at cost in accordance with the Accounting Standard on " Accounting for Investments (AS - 13) issued by ICAI.

1.15 GOVERNMENT GRANTS. SUBSIDIES:

Government grants in the nature of TUF's Interest subsidy on the Rupee Term Loan availed from the Banks under the Technology Upgradation Fund Scheme @5% on the balance outstanding, which is reduced from the finance cost of the relevant Term Loan.

1.16 EMPLOYEE BENEFITS:

i. Provident Fund:

Eligible employees of the Company receive benefits under the Provident Fund which is a defined contribution plan wherein both the employee, and the Company make monthly contributions equal to specified percentage of the covered employees' salary. These contributions are made to the Funds administered and managed by the Govt, of India. The Company's monthly contributions are charged to revenue in the period they are incurred.

ii. Gratuity:

In accordance with the payment of 'Gratuity Act, 1972' of India, the Company provided for gratuity, a defined retirement benefit plan (the Gratuity Plan') covering eligible employees. Liabilities with regards to such Gratuity Plan are determined by actuarial valuation and are charged to revenue in the period determined.

The actual assumptions is arriving at the provision of gratuity liabilities which are as follows:

a) Mortality Rate LIC (1994-96)

b) Discounting Rate 8.5%

c) Salary Escalation 6.0%

d) Retirement Age 60

iii. Provision for Unutilized Leave

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at period-end and charged to revenue in the period determined.

1.17 SEGMENT REPORTING:

As the Company's business activities falls within a single primary business segment viz. Dyed and Texturised Yam, the Disclosure requirement of Accounting Standard (AS-17) 'Segment Reporting' issued by the Institute of Chartered Accountants of India are not applicable.

1.18 EARNINGS PER SHARE:

Basic earnings per share has been calculated by dividing the profit after tax by the weighted average number of equity shares outstanding during the year.

 
Subscribe now to get personal finance updates in your inbox!