Mar 31, 2015
1. CORPORATE PROFILE:
Gem Spinners India Limited was incorporated as a Public Limited Company
on 18th October 1990. The Company's shares are listed in Bombay Stock
Exchange.
The Company has set up a plant for the Manufacture of Cotton yarn and
Grey Fabrics at No.14 Mangalam Village, Kancheepuram District, Tamil
Nadu.
2. BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
i) The financial statements have been prepared under the historical
cost concept and in accordance with Generally Accepted Accounting
Policies, the mandatory Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006 and relevant provisions of
Companies Act, 2013, as adopted consistently by the Company.
ii) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
iii) All inventories and stores & spares are valued at cost or net
realizable value whichever is lower.
3. USES OF ESTIMATES
The preparation of financial statements in conformity with GAAP
requires management to make judgments, estimates and assumptions that
affect the reported amount of assets, liabilities, revenues and
expenses and disclosure of contingent liabilities, at the end of the
reporting period. Although these estimates are based upon management's
best knowledge of current events and actions, actual results could
differ from these estimates in the future period.
4. FIXED ASSETS
i) Tangible fixed assets are stated at cost of acquisition (net of
CENVAT/ VAT wherever applicable) less accumulated depreciation/
amortization and impairment losses if any, except free hold land which
is carried at cost less impairment losses if any. The cost comprises
purchase prices, borrowing cost if capitalization criteria are met and
directly attributable cost of bringing the asset to its working
condition for the intended use. Subsequent expenditure relating to an
item of fixed asset is added to its book value only if it increases the
future benefits from the asset beyond its previous assessed standard of
performance. All other expenses on fixed assets, including day-to- day
repair and maintenance expenditure and cost of replacing parts are
charged to the statement of Profit and loss for the period as and when
they occur.
ii) Depreciation on Fixed Assets is provided on Straight Line Method at
the rates prescribed in Schedule II of the Companies Act, 2013.
iii) Gains or losses arising from disposal of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of such assets are recognized in the statement of Profit and
loss.
5) INVENTORIES
Stores and Spares are valued at cost.
6) REVENUE RECOGNITION
i) Sales of Goods
Revenue is recognized to the extent that is probable that the economic
benefits will flow to the company and the revenue can be reliably
measured. Sale of products is recognized when the significant risk and
reward of ownership of the goods have been passed to the buyer. Sale
value excludes excise duty, education cess, secondary and higher
education cess, CST and VAT.
ii) Interest:
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
iii) Export Benefits:
Export entitlements in the form of Duty Drawback and other schemes are
recognized in the statement of Profit and loss when the right to
receive credit as per the terms of the scheme is established in respect
of exports made and when there is no significant uncertainty regarding
the ultimate collection of the relevant export proceeds.
7) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalized as a part of the cost of such
assets as per Accounting Standard 16. All other borrowing costs are
charged to revenue.
8) DEPRECIATION
Depreciation on Fixed Assets is provided on Straight Line Method at the
rates prescribed in Schedule II of the Companies Act, 2013 except Plant
& Machinery based on useful life ascertained for such asset.
9) EMPLOYEE BENEFITS
Short Term
Short term employee benefits viz., salaries and wages are recognized as
expense at the undiscounted amount in the statement of Profit and loss
for the year in which the related service is rendered.
Long Term Post Retirement
Provident Fund
Provident Fund is a defined contribution scheme and the contributions
is recognized as an expenses in the Profit & Loss Account for the year
in which the employees have rendered services. The company contributes
to provident fund administered by the Government on a monthly basis at
12% of employees basic salary. There are no other obligation other than
the above defined contribution plan.
State Defined Contribution Plans
Employees' Pension Scheme 1995
The Provident Fund and the State Defined Contribution Plans are
operated by the Regional Provident Fund Commissioner.
Gratuity
Gratuity is a defined benefit retirement plan. The Company contributes
to the Scheme with Life Insurance Corporation of India based on
actuarial valuation done by them as at the close of the financial year.
Leave Encashment
The Company normally allows its employees to utilize the leave.
10) FOREIGN CURRENCY TRANSACTION
Foreign Currency Transactions are recorded at the rate of exchange
prevailing on the date of the transaction. Exchange differences
arising on actual payment / realization referred are adjusted in the
statement of Profit & loss.
11) PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS
1. Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as result of past
events and it is probable that there will be outflow of resources.
2. Contingent Liabilities (Service Tax & Sales Tax): Rs.70.02 Lakhs
(Rs.61.52 Lakhs)
3. Contingent Assets are not recognized.
12) SEGMENT REPORTING :
The Company is engaged in the business of manufacture and export of
cotton yarn and grey fabrics and also trade in the same commodity and
accordingly trading is considered as a segment.
13) IMPAIRMENT :
Consideration is given at each balance sheet to determine whether there
is any indication of impairment of the carrying amount of the company's
fixed assets. If any indication exists an asset's recoverable amount is
estimated. An impairment loss is recognized whenever the carrying
amount of an asset exceeds recoverable amount.
Mar 31, 2014
A) GENERAL
The financial statements are prepared in accordance with Indian General
Accepted Accounting Principles ("GAAP") under the historical cost
convention (except for certain revalued fixed assets) on the accounting
principles of a going concern and the Company follows mercantile system
of accounting and recognizes income and expenditure on accrual basis
except those with significant uncertainties
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amount of assets, liabilities, revenues and expenses and
disclosure of contingent liabilities on the date of financial
statements. The recognition, measurement, classification and
disclosures of an item or information in the financial statements are
made relying on these estimates. Any revision to accounting estimates
is recognized prospectively.
B) FIXED ASSETS
All fixed assets are stated at cost (net of CENVAT / Value Added Tax)
and adjusted by revaluation in case of certain Land, Building, Plant &
Machinery and Electrical Installations, less accumulated depreciation
and impairment loss, if any.
In accordance with AS 28 on ÂImpairment of Assets'' where there is an
indication of impairment of the Company''s assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each Balance Sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized in the Profit and Loss Account whenever the carrying amount
of such assets exceeds its recoverable amount.
C) INVENTORIES
Raw Materials, Stores and Spares are valued at cost.
Finished Goods are valued at lower of cost or net realizable value.
Stock-in- process is valued at estimated cost.
Waste is valued at net realizable value.
D) SALES
Revenue is recognized when the goods and all the significant risks and
rewards of ownership are transferred to the buyer and no significant
uncertainty exists regarding the amount of consideration. Export Sales
are inclusive of deemed exports. Local sales are net of sales tax.
E) BORROWING COST
F) DEPRECIATION
Depreciation is provided on straight line method at the rates
prescribed under Schedule XIV of the Companies Act, 1956, for all
assets except plant and machinery and electrical installations which
have been considered as continuous process of plant as defined in
Schedule XIV to the Companies Act, 1956, on technical assessment and
accordingly depreciation is provided.
Depreciation is provided after adjusting for the exchange fluctuation
arising due to repayment / reinstatement as at the balance sheet date.
G) EMPLOYEE BENEFITS PROVIDENT FUND
Provident Fund is a defined contribution scheme and the contributions
are charged to the Profit & Loss Account as incurred. STATE DEFINED
CONTRIBUTION PLANS EMPLOYEESÂ Pension Scheme 1995
The Provident Fund and the State Defined Contribution Plans are
operated by the Regional Provident Fund Commissioner. GRATUITY
Gratuity is a defined benefit retirement plan. The Company contributes
to the Scheme with Life Insurance Corporation of India based on
actuarial valuation done by them as at the close of the financial year.
LEAVE ENCASHMENT
The Company normally allows its employees to utilize the leave and no
encashment leave has been demanded.
H) FOREIGN CURRENCY TRANSACTION
Assets and Liabilities related to foreign currency transaction
remaining unsettled at the end of the year are translated at the
relevant rates of exchange prevailing at the year-end. In case of the
long term borrowing for the acquisition of fixed assets, the gains or
losses on transaction are adjusted to the cost of such assets.
I) DEFERRED TAX
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax on assets are recognized and carried forward only if there is a
virtual / reasonable certainty of realization of such assets in near
future and are reviewed for their appropriateness of their respective
carrying value at each Balance Sheet date.
J) PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS
1. A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities are disclosed
in the notes to accounts and are determined based on the management
perception
Mar 31, 2012
A) GENERAL
i). The financial statements are prepared in accordance with Indian
General Accepted Accounting Principles ("GAAP") under the historical
cost convention (except for certain revalued fixed assets) on the
accounting principles of a going concern and the Company follows
mercantile system of accounting and recognizes income and expenditure
on accrual basis except those with significant uncertainties
ii). The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amount of assets, liabilities, revenues and expenses and
disclosure of contingent liabilities on the date of financial
statements. The recognition, measurement, classification or disclosures
of an item or information in the financial statements are made relying
on these estimates. Any revision to accounting estimates is recognized
prospectively.
B) FIXED ASSETS
i. All fixed assets are stated at cost (net of CENVAT/ Value Added Tax)
and adjusted by revaluation in case of certain Land, Building, Plant &
Machinery and Electrical Installations, less accumulated depreciation
and impairment loss, if any. Expenditure during construction period in
respect of new project/expansion is allocated to the respective fixed
assets on their being ready for intended use.
ii. In accordance with AS 28 on 'Impairment of Assets' where there is
an indication of impairment of the Company's assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each Balance Sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized in the Profit and Loss Account whenever the carrying amount
of such assets exceeds its recoverable amount.
C) INVESTMENTS
Long term Investments are stated at cost and provision is made to
recognize any decline, other than temporary, in the value of such
investments.
D) INVENTORIES
i. Raw Materials, Stores and Spares are valued at cost.
ii. Finished Goods are valued at lower of cost or net realizable value.
iii. Stock-in- process is valued at estimated cost.
iv. Waste is valued at net realizable value.
E) SALES
Revenue is recognized when the property and all the significant risks
and rewards of ownership are transferred to the buyer and no
significant uncertainty exists regarding the amount of consideration.
Export Sales are inclusive of deemed exports. Local sales are net of
sales tax.
F) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalized as a part of the cost of such
asset upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit & Loss Account.
G) DEPRECIATION
i. Depreciation is provided on straight line method at the rates
prescribed under Schedule XIV of the Companies Act, 1956, for all
assets except plant and machinery and electrical installations which
have been considered as continuous process of plant as defined in
Schedule XIV to the Companies Act, 1956, on technical assessment and
accordingly depreciation is provided.
ii. Depreciation is provided after adjusting for the exchange
fluctuation arising due to repayment/ reinstatement as at the balance
sheet date.
H) EMPLOYEE BENEFITS
i. PROVIDENT FUND
Provident Fund is a defined contribution scheme and the contributions
are charged to the Profit & Loss Account as incurred.
ii. STATE DEFINED CONTRIBUTION PLANS EMPLOYEES' Pension Scheme 1995
The Provident Fund and the State Defined Contribution Plans are
operated by the Regional Provident Fund Commissioner.
iii. GRATUITY
Gratuity is a defined benefit retirement plan. The Company contributes
to the Scheme with Life Insurance Corporation of India based on
actuarial valuation done by them as at the close of the financial year.
iv. LEAVE ENCASHMENT
The Company normally allows its employees to utilize the leave and no
encashment leave has been demanded.
I) FOREIGN CURRENCY TRANSACTION
Assets and Liabilities related to foreign currency transaction
remaining unsettled at the end of the year are translated that the
relevant rates of exchange prevailing at the year-end. In case of the
long term borrowing for the acquisition of fixed assets, the gains or
losses on transaction are adjusted to the cost of such assets.
J) DEFERRED TAX
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax on assets are recognized and carried forward only if there is a
virtual/reasonable certainty of realization of such assets in near
future and are reviewed for their appropriateness of their respective
carrying value at each Balance Sheet date.
K) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
i. A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities are disclosed
in the notes to accounts and are determined based on the management
perception
ii. Contingent Liabilities: NIL (Nil)
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