Mar 31, 2015
1.1. Basis of Accounting
The Financial Statements are prepared as a going-concern under
historical cost convention on an accrual basis except those with
significant uncertainty and in accordance with mandatory accounting
standard under section 133 of the Companies Act 2013 (the Act) read
with Rule 7 of the Companies (Accounts) Rule 2014 and the relevant
provisions of the Act. Accounting policies not stated explicitly
otherwise are consistent with generally accepted accounting principles
and mandatory accounting standards.
1.2. Use of Estimates
The presentation of financial statements 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 the estimates are recognised in the
period in which the results are known /materialized.
1.3. Revenue Recognition
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 recognised 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.
Revenues from sale of material by-products are included in revenue.
Interest income is recognised on accrual basis in the income statement.
1.4. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expense in the year in which they are
incurred.
1.5. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of freight,
duties, taxes and installation expenses less accumulated depreciation
and impairment loss, if any.
1.6. 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 assets on the completion of the
construction period.
1.7. Depreciation
i. Depreciation on fixed assets is provided using Straight Line Method
over their useful life as prescribed under Schedule II of the Companies
Act, 2013. In respect of additions/extensions forming an integral part
of existing plants and on the revised carrying amount of the assets
identified as impaired on which depreciation is provided over residual
life of the respective fixed assets. (read with para (ii)
below).Continuous process plants as defined in Schedule II have been
considered on technical evaluation.
ii. Depreciation on additions/disposals is provided pro-rata with
reference to the month of addition/ disposal.
iii. Amortisation of leasehold land and buildings is done in proportion
to the period of lease.
iv. Capital Expenditure on assets not owned are written off over the
duration of contract or ten years, whichever is lower.
v. Fixed Assets costing Rs. 5000/- or less has been depreciated fully
in the year of purchase.
1.8. Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated
amortisation. Technical know-how is amortised over the useful life of
the underlying plant.
Specialized Software is amortised over an estimated useful period of
six year. Amortisation is done on straight line basis.
1.9. Inventories
I) Inventories are valued at lower of cost or net realisable value
except for scrap and by-products which are valued at net realisable
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 Basis.
1.10. 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. Investments in foreign currency are stated at the rate of
exchange prevalent on the date of investment.
1.11. 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 recognised as exchange
difference and the premium paid on forward contracts has been
recognised over the life of the contract. Any income or expense on
account of exchange difference either on settlement or on translation
is recognised in the Statement of Profit and Loss.
III. Non monetary foreign currency items are carried at cost.
1.12. Employees Benefits
I) Defined Contribution Plan:
Employee benefits in the form of Provident Fund (with Government
Authorities) 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:
Retirement benefits in the form of Gratuity & 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.
1.13. Government Grants
I. Grants 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 incentives are credited to
Statement of Profit and 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 to the Statement of
Profit & Loss.
IV. Duty drawback / DEPB is recognised at the time of exports and the
benefits in respect of advance license received by the Company against
export made by it are recognised as and when goods are imported against
them.
1.14. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is reasonable/virtual certainty that asset will be realised
in future.
1.15. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
statement of Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognised in prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
1.16. Provision, Contingent Liabilities and Contingent assets
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.
Sep 30, 2014
1.1 Basis of Accounting
The Financial Statements are prepared as a going-concern under
historical cost convention on an accrual basis except those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles and mandatory accounting
standards.
1.2 Use of Estimates
The presentation of financial statements 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 the estimates are recognised in the
period in which the results are known /materialized.
1.3 Revenue Recognition
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 recognised 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.
Revenues from sale of material by-products are included in revenue.
Interest income is recognised on accrual basis in the income statement.
1.4 Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expense in the year in which they are
incurred.
1.5 Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of freight,
duties, taxes and installation expenses less accumulated depreciation
and impairment loss, if any.
1.6 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 assets on the completion of the
construction period.
1.7 Depreciation
(i) Depreciation has been provided on Fixed Assets on straight line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. In respect of additions arising on account of
Insurance spares, on additions/extensions forming an integral part of
existing plants and on the revised carrying amount of the assets
identified as impaired on which depreciation has been provided over
residual life of the respective fixed assets. (read with para (ii)
below).
(ii) Depreciation on additions/disposals is provided pro-rata with
reference to the month of addition/ disposal.
(iii) Amortisation of leasehold land and buildings has been done in
proportion to the period of lease.
(iv) Leasehold land, where ownership vests with the Government / local
authorities are amortized over the period of lease.
(v) Capital Expenditure on assets not owned are written off over the
duration of contract or ten years, whichever is lower.
(vi) Fixed Assets costing Rs. 5000/- or less has been depreciated fully
in the year of purchase.
1.8 Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated
amortisation. Technical know-how is amortised over the useful life of
the underlying plant.
Specialized Software is amortised over an estimated useful period of
six year. Amortisation is done on straight line basis.
1.9 Inventories
(i) Inventories are valued at lower of cost or net realisable value
except for scrap and by-products which are valued at net realisable
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 Basis.
1.10 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.
1.11 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 recognised as exchange
difference and the premium paid on forward contracts has been
recognised over the life of the contract. Any income or expense on
account of exchange difference either on settlement or on translation
is recognised in the Statement of Profit and Loss.
(iii) Non monetary foreign currency items are carried at cost.
1.12 Employees Benefits
(i) Defined Contribution Plan:
Employee benefits in the form of Provident Fund (with Government
Authorities) 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:
Retirement benefits in the form of Gratuity & 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.
1.13 Export Incentives
Duty drawback / DEPB is recognised at the time of exports and the
benefits in respect of advance license received by the Company against
export made by it are recognised as and when goods are imported against
them.
1.14 Government Grants
(i) Grants 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 incentives are credited to
Statement of Profit and 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 to the Statement of
Profit & Loss.
1.15 Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is reasonable/virtual certainty that asset will be realised
in future.
1.16 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss i s charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
1.17 Provision, Contingent Liabilities and Contingent assets
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.
Mar 31, 2012
1.1 Basis of Accounting
The Financial Statements are prepared as a going-concern under
historical cost convention on an accrual basis except those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles and mandatory accounting
standards.
1.2 Use of Estimates
The presentation of financial statements 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 the estimates are recognized in the
period in which the results are known/materialized.
1.3 Revenue Recognition
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.
Revenues from sale of material by-products are included in revenue.
Interest income is recognized on an accrual basis in the income
statement.
1.4 Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expense in the year in which they are
incurred.
1.5 Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of freight,
duties, taxes and installation expenses less accumulated depreciation
and impairment loss, if any.
1.6 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 assets on the completion of the
construction period.
1.7 Depreciation
(i) Depreciation has been provided on Fixed Assets on straight line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. In respect of additions arising on account of
Insurance spares, on additions/extensions forming an integral part of
existing plants and on the revised carrying amount of the assets
identified as impaired on which depreciation has been provided over
residual life of the respective fixed assets. (read with para (ii)
below).
(ii) Depreciation on additions/disposals is provided pro-rata with
reference to the month of addition/disposal.
(iii) Amortisation of leasehold land and buildings has been done in
proportion to the period of lease.
(iv) Leasehold land, where ownership vests with the Government / local
authorities are amortized over the period of lease.
(v) Capital Expenditure on assets not owned are written off over the
duration of contract or ten years, whichever is lower.
1.8 Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated
amortisation. Technical know-how is amortised over the useful life of
the underlying plant.
Specialized Software is amortised over an estimated useful period of
six year. Amortisation is done on straight line basis.
1.9 Inventories
(i) Inventories are valued at lower of cost or net realisable value
except for scrap and by-products which are valued at net realisable
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.
1.10 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.
1.11 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. I n 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 recognised as exchange
difference and the premium paid on forward contracts has been
recognised over the life of the contract. Any income or expense on
account of exchange difference either on settlement or on translation
is recognised in the Profit and Loss account.
(iii) Non monetary foreign currency items are carried at cost.
1.12 Employees Benefits
(i) Defined Contribution Plan:
Employee benefits in the form of Provident Fund (with Government
Authorities) 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 & 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.
1.13 Export Incentives
Duty drawback / DEPB is recognised at the time of exports and the
benefits in respect of advance license received by the Company against
export made by it are recognised as and when goods are imported against
them.
1.14 Government Grants
(i) Grants 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 incentives are credited to
Profit and 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 to the Profit & Loss
Account.
1.15 Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is reasonable/virtual certainty that asset will be realised
in future.
1.16 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
1.17 Provision, Contingent Liabilities and Contingent assets
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.
Mar 31, 2011
1. Basis of Accounting
The Financial Statements are prepared as a going-concern under
historical cost convention on an accrual basis except those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles and mandatory accounting
standards.
2. Use of Estimates
The presentation of financial statements 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 the estimates are recognised
in the period in which the results are known/materialized.
3. Revenue Recognition
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 recognised 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.
Revenues from sale of material by-products are included in revenue.
Interest income is recognised on an accrual basis in the income
statement.
4. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expense in the year in which they are
incurred.
5. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of freight,
duties, taxes and installation expenses less accumulated depreciation
and impairment loss, if any.
6. 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 assets on the completion of the
construction period.
7. Depreciation
(i) Depreciation has been provided on Fixed Assets on straight line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. In respect of additions arising on account of
Insurance spares, on additions/extensions forming an integral part of
existing plants and on the revised carrying amount of the assets
identified as impaired on which depreciation has been provided over
residual life of the respective fixed assets. (read with para (ii)
below).
(ii) Depreciation on additions/disposals is provided pro-rata with
reference to the month of addition/disposal.
(iii) Amortisation of leasehold land and buildings has been done in
proportion to the period of lease.
(iv) Leasehold land, where ownership vests with the Government / local
authorities are amortized over the period of lease.
(v) Capital Expenditure on assets not owned are written off over the
duration of contract or ten years, whichever is lower.
8. Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated
amortisation. Technical know-how is amortised over the useful life of
the underlying plant. Specialised Software is amortised over an
estimated useful period of six year. Amortisation is done on straight
line basis.
9. Inventories
(i) Inventories are valued at lower of cost or net realisable value
except for scrap and by-products which are valued at net realisable
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.
10. 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.
11. 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 recognised as
exchange difference and the premium paid on forward contracts has been
recognised over the life of the contract. Any income or expense on
account of exchange difference either on settlement or on translation
is recognised in the Profit and Loss account. (iii) Non monetary
foreign currency items are carried at cost.
12. Employees Benefit
(i) Defined Contribution Plan:
Employee benefits in the form of Provident Fund (with Government
Authorities) 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 & 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.
13. Export Incentives
Duty drawback / DEPB is recognised at the time of exports and the
benefits in respect of advance license received by the Company against
export made by it are recognised as and when goods are imported against
them.
14. Government Grants
(i) Grants 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 incentives are credited to
Profit and 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 to the Profit & Loss
Account.
15. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from Ãtiming differencesà between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is reasonable/virtual certainty that asset will be realised
in future.
16. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
17. Provision, Contingent Liabilities and Contingent assets
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.
Mar 31, 2010
1. Basis of Accounting
The Financial Statements are prepared as a going-concern under
historical cost convention on an accrual basis except those with
significant uncertainty and in accordance with the Companies Act, 1956.
Accounting policies not stated explicitly otherwise are consistent with
generally accepted accounting principles and mandatory accounting
standards.
2. Use of Estimates
The presentation of financial statements 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 the estimates are recognised in the
period in which the results are Known/materialized.
3. Revenue Recognition
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 is recognised 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.
Revenues from sale of material by-products are included in revenue.
Interest income is recognised on an accrual basis in the incoming
statement.
4. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expense in the year in which they are
incurred.
5. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of freight,
duties, taxes and installation expenses less accumulated depreciation
and impairment loss, if any.
6. 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 assets on the completion of the
construction period.
7. Depreciation
(i) Depreciation has been provided on Fixed Assets on Straight Line
Method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956 except in respect of additions arising on account
of Insurance spares, on additions/extensions forming an integral part
of existing plants and on the revised carrying amount of the assets
identified as impaired on which depreciation has been provided over
residual life of the respective fixed assets, (read with para (ii)
below).
(ii) Depreciation on additions/disposals is provided pro-rata with
reference to the month of addition/disposal.
(iii) Amortisation of leasehold land and buildings has been done in
proportion to the period of lease.
(iv) Leasehold land, where ownership vests with the Government / local
authorities are amortized over the period of lease.
(v) Capital Expenditure on assets not owned are written off over the
duration of contract or ten years, whichever is lower.
8. Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated
amortisation. Technical know-how is amortised over the useful life of
the underlying plant. Specialised Software is amortised over an
estimated useful period of six year. Amortisation is done on straight
line basis.
9. Inventories
(i) Inventories are valued at lower of cost or net realisable value
except for scrap and by-products which are valued at net realisable
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.
10. 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.
11. 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 recognised as exchange
difference and the premium paid on forward contracts has been
recognised over the life of the contract. Any income or expense on
account ot exchange difference either on settlement or on translation
is recognised in the Profit and Loss account.
(iii) Non monetary foreign currency items are carried at cost.
12. Employees Benefits
(I) Defined Contribution Plan : Employee benefits in the form of
Provident Fund (with Government Authorities) 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, Long Term compensated leaves and Provident Fund (multi-
employer plan) 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.
13. Export Incentives
Duty drawback/DEPB is recognised at the time of exports and the
benefits in respect of advance license received by the company against
export made by it are recognised as and when goods are imported against
them.
14. Government Grants
(i) Grants 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 incentives are credited to Profit and 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 to the Profit & Loss Account.
15. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is reasonable/virtual certainty that asset will be realised
in future.
16. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
17. Provision, Contingent Liabilities and Contigent Assets
Provision involving substantial degree of estimation in measurement are
recognised when there is a present obligation as a result of past
events and it is porbable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contigent Assets are neither recognised nor disclosed in the
financial statements.