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Accounting Policies of Winsome Textile Industries Ltd. Company

Mar 31, 2015

1.1 GENERAL

(i) The financial statements have been prepared under historical cost convention on accrual basis in compliance with applicable Accounting Standards as prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013.

1.2 REVENUE RECOGNITION

(i) Revenue represents the net invoice value of goods and services provided to third parties after deducting discounts, volume rebates, outgoing sales taxes and duties, and are recognized usually when all significant risks and rewards of ownership of the assets (goods) sold are transferred to the customer and the commodity has been delivered materially to the shipping agent.

(ii) Revenue from sale of by-products (goods) is included in revenue from operations.

1.3 VALUATION OF INVENTORIES

(i) Inventories are valued at lower of Cost and Net Realizable Value except for scrap and by products which are valued at net realizable value. (ii) Cost of inventories of finished goods and work-in-process includes material cost, cost of conversion and other related overhead costs. (iii) Cost of inventories of raw material, work-in-process and stores & spares is generally determined on weighted average cost method.

1.4 INVESTMENTS

Long Term Investments are stated at cost. Provision for diminution in long term investments is made only if such decline is other than temporary. Current investments are carried at lower of cost or market price.

1.5 FIXED ASSETS

Fixed assets are stated at cost of acquisition (net of cenvat credit) & are inclusive of freight, duties, taxes and installation expenses less accumulated depreciation and impairment loss, if any.

1.6 DEPRECIATION/ AMORTISATION/ IMPAIREMENT LOSS

(a) Depreciation on fixed assets has been provided using Straight Line Method over their useful lives and in the manner prescribed under Schedule II of the Companies Act, 2013 (except leasehold land which is amortized over the period of lease).

(b) Continuous process plants as defined in Schedule II have been considered on the basis of technical evaluation and depreciated over the lives as prescribed under Schedule II

(c) Depreciation on addition/sale is provided on Pro-rata basis with reference to the month of addition / sale.

(d) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed balance life of the assets.

(e) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

1.7 BORROWING COST

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/ construction of qualifying fixed assets are capitalized till the date of intended commercial use of the assets. Other borrowing costs are charged to the Statement of Profit & Loss.

1.8 GOVERNMENT GRANTS

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves. (ii) Other Government Grants including incentive are credited to statement of Profit & Loss or deducted from the related expenses.

(iii) Capital Subsidy under TUFS from the Ministry of Textiles on specified processing machinery is treated as deferred income which is recognized on systematic and rational basis in proportion of the applicable depreciation over the useful lives of the respective assets and is adjusted against the depreciation / credited to the Statement of Profit and Loss.

1.9 FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. In case of forward contracts, the exchange differences are dealt within the Statement of Profit & Loss over the period of the contracts.

1.10 EXPENDITURE DURING CONSTRUCTION PERIOD

Pre-operative project expenditure (net of income accrued) incurred upto the date of commercial production are capitalized and the same are allocated to the respective fixed assets on the completion of the construction period.

1.11 EMPLOYEE BENEFITS:-

(I) Defined Contribution Plan

Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan

Employee benefit in the form of Gratuity is funded every year under group policy of Life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed. Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit and Loss.

1.12 TAXES ON INCOME

Provision for Income Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income tax Act, 1961. Deferred Tax is recognised, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

1.13 CONTINGENT LIABILITIES, CONTINGENT ASSETS & PROVISIONS

Contingent liabilities if material, are disclosed by way of notes, contingent assets are neither recognised nor disclosed in the financial statements. Provision is recognised when the Company has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.

1.14 RESEARCH AND DEVELOPMENT EXPENSES

Revenue Expenditure on Research and Development is charged to the Statement of Profit & Loss and Capital Expenditure is added to Fixed Assets.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.


Mar 31, 2014

1.1 GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards as per Company (Accounting Standard) Rules, 2006.

1.2 REVENUE RECOGNITION

(i) Revenue represents the net invoice value of goods and services provided to third parties after deducting discounts, volume rebates, outgoing sales taxes and duties, and are recognized usually when all significant risks and rewards of ownership of the assets (goods) sold are transferred to the customer and the commodity has been delivered to the shipping agent.

(ii) Revenue from sale by-products (goods) is included in revenue from operations.

1.3 VALUATION OF INVENTORIES

(i) Inventories are valued at lower of Cost and Net Realizable Value except for scrap and by-products which are valued at net realizable value.

(ii) Cost of inventories of finished goods and work-in-process includes material cost, cost of conversion and other related overhead costs.

(iii) Cost of inventories of raw material, work-in-process and stores & spares is generally determined on weighted average cost method.

1.4 INVESTMENTS

Long Term Investments are stated at cost. Provision for diminution in long term investments is made only if such decline is other than temporary. Current investments are carried at lower of cost or market price.

1.5 FIXED ASSETS

Fixed assets are stated at cost of acquisition (net of cenvat credit) & are inclusive of freight, duties, taxes and installation expenses less accumulated depreciation and impairment loss, if any.

1.5 DEPRECIATION/ AMORTISATION/ IMPAIREMENT LOSS

(a) Depreciation on fixed assets is provided on Straight Line Method by applying rates given in Schedule XIV of the Companies Act, 1956. (except leasehold land which is amortized over the period of lease).

(b) Depreciation on certain plant & machinery is provided as per the rates applicable to the continuous process plant on the basis of technical evaluation.

(c) Depreciation on addition/sale is provided Pro-rata with reference to the month of addition/sale.

(d) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed balance life of the assets.

(e) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

(f) Fixed assets costing Rs.5000 or less has been depreciated fully in the year of purchase.

1.6 BORROWING COST

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/ construction of qualifying fixed assets are capitalized till the date of intended commercial use of the assets and other borrowing costs are charged to the Statement of Profit & Loss.

1.7 GOVERNMENT GRANTS

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves.

(ii) Other Government Grants including incentive are credited to statement of Profit & Loss or deducted from the related expenses.

(iii) Capital Subsidy under TUFS from the Ministry of Textiles on specified processing machinery is treated as deferred income which is recognized on systematic and rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation / credited to the Statement of Profit and Loss.

1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. In case of forward contracts, the exchange difference are dealt within the Statement of Profit & Loss account over the period of the contracts.

1.9 EXPENDITURE DURING CONSTRUCTION PERIOD

Pre-operative project expenditure (net of income accrued) incurred upto the date of commercial production are capitalized and the same are allocated to the respective fixed assets on the completion of the construction period.

1.10 EMPLOYEE BENEFITS:- (I) Defined Contribution Plan

Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss Account of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan

A retirement benefit in the form of Gratuity is funded every year under group policy of Life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed.

Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit and Loss Account.

1.11 TAXES ON INCOME

Provision for Income Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income tax Act, 1961. Deferred Tax is recognised, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

1.12 CONTINGENT LIABILITIES, CONTINGENT ASSETS & PROVISIONS

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statements. Provision is recognised when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.

2.1 Rights & Restrictions of Shareholders:

2.1.1 The Company has only one class of Equity Shares having face value of Rs. 10/- each (Previous Year Re. 10/- each) in its issued, subscribed and paid up Equity share capital. Each shareholder is entitled to one vote per share (except GDR shareholding mentioned at point no. 2.1.2 below). Each shareholder have the right in profit/surplus in proportion to amount paid up with respect to share holder. This is to be read with note no. 27.3.

2.1.2 The GDR shareholding (12,90,000 nos. of GDRs. Representing Equity shares of Rs. 10 each are 64,50,000) which is standing in the name of Bank of New York Mellon, as Depositary, has right to dividend, do not have any right to vote.

2.1.3 In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets, if any, in proportionate to their individual shareholding in the paid up equity capital of the Company.

1. Working Capital Demand loans from bank includes Cash Credit, Packing Credit and short term loans are secured by First Charge by Hypothecation of Raw Material, Stock In Process, Finished Goods, Consumable Store and Spares, Goods in Transit, Book Debts and by Second Charge on entire Fixed Assets of the Company on Pari-passu basis with Working Capital lenders.

2. The aforesaid credit facilities mentioned above is also guaranteed by Chairman & Whole Time Director and Managing Director.


Mar 31, 2013

1.1 GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards as per Company (Accounting Standard) Rules, 2006.

1.2 REVENUE RECOGNITION

(i) Revenue represents the net invoice value of goods and services provided to third parties after deducting discounts, volume rebates, outgoing sales taxes and duties, and are recognized usually when all significant risks and rewards of ownership of the assets (goods) sold are transferred to the customer and the commodity has been delivered to the shipping agent.

(ii) Revenue from sale by-products (goods) is included in revenue from operations.

1.3 VALUATION OF INVENTORIES

(i) Inventories are valued at lower of Cost and Net Realizable Value except for scrap and by-products which are valued at net realizable value.

(ii) Cost of inventories of finished goods and work-in-process includes material cost, cost of conversion and other related overhead costs.

(iii) Cost of inventories of raw material, work-in-process and stores & spares is generally determined on weighted average cost method.

1.4 INVESTMENTS

Long Term Investments are stated at cost. Provision for diminution in long term investments is made only if such decline is other than temporary. Current investments are carried at lower of cost or market price.

1.5 FIXED ASSETS

Fixed assets are stated at cost of acquisition (net of cenvat credit) & are inclusive of freight, duties, taxes and installation expenses less accumulated depreciation and impairment loss, if any.

1.5 DEPRECIATION/ AMORTISATION/ IMPAIREMENT LOSS

(a) Depreciation on fixed assets is provided on Straight Line Method by applying rates given in Schedule XIV of the Companies Act, 1956. (except leasehold land which is amortized over the period of lease).

(b) Depreciation on certain plant & machinery is provided as per the rates applicable to the continuous process plant on the basis of technical evaluation.

(c) Depreciation on addition/sale is provided Pro-rata with reference to the month of addition/sale.

(d) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed balance life of the assets.

(e) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

(f) Fixed assets costing Rs.5000 or less has been depreciated fully in the year of purchase.

1.6 BORROWING COST

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/ construction of qualifying fixed assets are capitalized till the date of intended commercial use of the assets and other borrowing costs are charged to the Statement of Profit & Loss.

1.7 GOVERNMENT GRANTS

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves.

(ii) Other Government Grants including incentive are credited to statement of Profit & Loss or deducted from the related expenses.

(iii) Capital Subsidy under TUFS from the Ministry of Textiles on specified processing machinery has been treated as deferred income which is recognized on systematic and rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation / credited to the Statement of Profit and Loss.

1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. In case of forward contracts, the exchange difference are dealt within the Profit & Loss account over the period of the contracts.

1.9 EXPENDITURE DURING CONSTRUCTION PERIOD

All pre-operative project expenditure (net of income accrued) incurred upto the date of commercial production is capitalized and the same are allocated to the respective fixed assets on the completion of the construction period.

1.10 EMPLOYEE BENEFITS:-

(I) Defined Contribution Plan

Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan

A retirement benefit in the form of Gratuity is funded every year under group policy of Life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed.

Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

1.11 TAXES ON INCOME

Provision for Income Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income tax Act, 1961. Deferred Tax is recognised, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

1.12 CONTINGENT LIABILITIES, CONTINGENT ASSETS & PROVISIONS

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statements. Provision is recognised when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.


Mar 31, 2012

1.1 GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards as per Company (Accounting Standard) Rules, 2006.

1.2 REVENUE RECOGNITION

(i) Revenue represents the net invoice value of goods and services provided to third parties after deducting discounts, volume rebates, outgoing sales taxes and duties, and are recognized usually when all significant risks and rewards of ownership of the asset sold are transferred to the customer and the commodity has been delivered to the shipping agent.

(ii) Revenues from sale of material by-products are included in revenue.

(iii) Interest income is recognized on an accrual basis in the income statement.

1.3 VALUATION OF INVENTORIES

(i) Inventories are valued at lower of Cost and Net Realizable Value except for scrap and by-products which are valued at net realizable value.

(ii) Cost of inventories of finished goods and work-in-process includes material cost, cost of conversion and other related overhead costs.

(iii) Cost of inventories of raw material, work-in-process and stores & spares is determined on weighted average cost method.

1.4 INVESTMENTS

Long Term Investments are stated at cost. Provision for diminution in long term investments is made only if such decline is other than temporary. Current investments are carried at lower of cost or market price.

1.5 FIXED ASSETS

Fixed assets are stated at cost of acquisition (net of canvas credit) & are inclusive of freight, duties, taxes and installation expenses less accumulated depreciation and impairment loss, if any.

1.5 DEPRECIATION/ AMORTISATION/ IMPAIREMENT LOSS

(a) Depreciation on fixed assets is provided on Straight Line Method by applying rates given in Schedule XIV of the Companies Act, 1956. (except leasehold land which is amortization over the period of lease).

(b) Depreciation on certain plant & machinery is provided as per the rates applicable to the continuous process plant on the basis of technical evaluation.

(c) Depreciation on addition/sale is provided Pro-rata with reference to the month of addition/sale.

(d) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed life of the assets.

(e) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

(f) Fixed assets costing Rs.5000 or less has been depreciated fully in the year of purchase.

1.6 BORROWING COST

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/ construction of qualifying fixed assets are capitalized till the date of intended commercial use of the assets and other borrowing costs are charged to the Profit & Loss Account.

1.7 GOVERNMENT GRANTS

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves.

(ii) Other Government Grants including incentive are credited to Profit & Loss Account or deducted from the related expenses.

(iii) Capital Subsidy under TUFS from the Ministry of Textiles on specified processing machinery has been treated as deferred income which is recognized on systematic and rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation / credited to the Profit and Loss account.

1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. In case of forward contracts, the exchange difference are dealt within the Profit & Loss account over the period of the contracts.

1.9 EXPENDITURE DURING CONSTRUCTION PERIOD

All pre-operative project expenditure (net of income accrued) incurred upto the date of commercial production is capitalized and the same are allocated to the respective fixed assets on the completion of the construction period.

1.10 EMPLOYEE BENEFITS:-

(I) Defined Contribution Plan

Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan

A retirement benefit in the form of Gratuity is funded every year under group policy of Life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed.

Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

1.11 TAXES ON INCOME

Provision for In come Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income tax Act, 1961. Deferred Tax is recognized, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

1.12 CONTINGENT LIABILITIES, CONTINGENT ASSETS & PROVISIONS

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statements. Provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.


Mar 31, 2011

1. GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards as per Company (Accounting Standard) rules 2011.

2. REVENUE RECOGNITION

(i) Revenue represents the net invoice value of goods and services provided to third parties after deducting discounts, volume rebates, outgoing sales taxes and duties, and are recognized usually when all significant risks and rewards of ownership of the asset sold are transferred to the customer and the commodity has been delivered to the shipping agent.

(ii) Revenues from sale of material by-products are included in revenue.

(iii) Interest income is recognized on an accrual basis in the income statement.

3. VALUATION OF INVENTORIES

(i) Inventories are valued at lower of Cost and Net Realisable Value except for scrap and by-products which are valued at net realizable value.

(ii) Cost of inventories of finished goods and work-in-process includes material cost, cost of conversion and other related overhead costs.

(iii) Cost of inventories of raw material, work-in-process and stores & spares is determined on weighted average cost method.

4. INVESTMENTS

Long Term Investments are stated at cost. Provision for diminution in long term investments is made only if such decline is other than temporary. Current investments are carried at lower of cost or market price.

5. FIXED ASSETS

Fixed assets are stated at cost of acquisition (net of cenvat credit) & is inclusive of freight, duties, taxes and installation expenses less accumulated depreciation and impairment loss, if any.

6. DEPRECIATION/ AMORTISATION/ IMPAIREMENT LOSS

(a) Depreciation on fixed assets is provided on Straight Line Method by applying rates given in Schedule XIV of the companies Act, 1956. (except leasehold land which is amortization over the period of lease).

(b) Depreciation on certain plant & machinery is provided as per the rates applicable to the continuous process plant on the basis of technical evaluation.

(c) Depreciation on addition/sale is provided Pro-rata with reference to the month of addition/sale.

(d) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed life of the assets.

(e) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

(f) Fixed assets costing Rs.5000 or less has been depreciated fully in the year of purchase.

7. BORROWING COST

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/ construc- tion of qualifying fixed assets are capitalized till the date of intended commercial use of the assets and other borrowing costs are charged to the Profit & Loss Account.

8. GOVERNMENT GRANTS

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves.

(ii) Other Government Grants including incentive are credited to Profit & Loss Account or deducted from the related expenses.

(iii) Capital Subsidy under TUFS from the Ministry of Textiles on specified processing machinery has been treated as deferred income which is recognised on systematic and rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation / credited to the Profit and Loss account.

9. FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. In case of forward contracts, the exchange difference are dealt within the Profit & Loss account over the period of the contracts.

10. EXPENDITURE DURING CONSTRUCTION PERIOD

All pre-operative project expenditure (net of income accrued) incurred upto the date of commercial production is capitalized and the same are allocated to the respective fixed assets on the completion of the construction period.

11. EMPLOYEE BENEFITS:-

(I) Defined Contribution Plan : Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan

A retirement benefit in the form of Gratuity is funded every year under group policy of Life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed. Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

12. TAXES ON INCOME

Provision for Income Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income tax Act, 1961. Deferred Tax is recognised, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

13. CONTINGENT LIABILITIES, CONTINGENT ASSETS & PROVISIONS

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statements. Provision is recognised when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.


Mar 31, 2010

1. General

i) These accounts are prepared on the historical cost basis and on the accounting principles of a going concern. ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards.

2. Revenue Recognition

Expenses and income considered payable and receivable respectively are accounted for on accural basis.

3. Valuation of Inventories

Inventories are valued at lower of Cost and Net Realisable Value except stock of waste, which is valued at Net Realisable Value. The cost for the purpose of valuation is computed as under:

(i) Raw Materials - Actual Cost of purchase including freight & taxes.

(ii) Stores and Spare Parts - Weighted Average Method.

(iii) Finished Goods and Stock in Process is determined by taking material, labour and other related overheads.

4. Investments

Long Term Investments are stated at cost. Where there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to Profit and Loss Account.

5. Fixed Assets

Fixed assets are stated at cost of acquisition (net of cenvat credit) & is inclusive of freight, duties, taxes and installation expenses.

6. Depreciation / Amortisation / Impairement Loss

(a) Depreciation on fixed assets is provided on Straight Line Methods by applying rates given in Schedule XIV of the companies Act, 1956. (except leasehold land which is amortised over the period of lease).

(b) Depreciation on addition/sale is provided Pro-rata with reference to the month of addition/sale.

(c) In case, the recoverable amount of the fixed assets is lower than its carrying amount a provision for the impairment loss, depreciation on impaired assets is provided based on the reassessed life of the assets.

(d) Capital Expenditure on assets not owned are written off over the duration of contract or ten years, whichever is lower.

(e) Fixed assets costing Rs.5000 or less has been depreciated fully in the year of purchases.

7. Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed for acquisition/construction of qualifying fixed assets are capitalised till the date of intended commercial use of the assets and other borrowing costs are charged to the Profit & Loss Account.

8. Government Grants

(i) Grants other than capital subsidy under TUFS relating to fixed assets are shown as deduction from the gross value of fixed assets and those of the nature of project subsidy are credited to Capital Reserves.

(ii) Other Government Grants including incentive are credited to Profit & Loss Account or deducted from the related expenses.

(iii) Capital subsidy under TUFS from the Ministry of Textiles on specified processing machinery has been treated as deferred income which is recognised on systematic and rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation/credited to the profit and loss account.

9. Foreign Currency Transactions

Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies and outstanding at the year end are translated at year end rates. Exchange difference arising on settlement of monetary items at rates different from those at which they were initially recorded are recognised as income or as expenses in the year in which they arise. In case of forward contracts, the exchange difference are dealt within the Profit & Loss account over the period of the contracts.

10. Expenditure during Construction Period

Expenditure during construction period are included under capital work in progress and the same are allocated to the respective fixed assets on the completion of the construction period.

11. Employees Benefits

(I) Defined Contribution Plan : Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(II) Defined Benefit Plan : Retirement benefits in the form of Gratuity is funded every year under Group Policy of life Insurance Corporation of India. Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(III) Other short term absences are provided based on past experience of leave availed. Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

12. Taxes on Income

Provision for Income Tax for the period comprises of Current Tax and Deferred Tax. Provision for current tax has been made on the basis of estimated taxable income in accordance with the provisions of Income Tax Act, 1961. Deferred Tax is recognised, subject to consideration of prudence, at the prevailing tax rates on timing differences between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent periods.

13. Contingent Liabilities, Contingent Assets & Provisions

Contingent liabilities, if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statements. Provision is recognised when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation (s), in respect of which a reliable estimate can be made for the amount of obligation.

 
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