Mar 31, 2016
Note 26
GTN Industries Limited has its Registered Office at Hyderabad, Telangana. It is engaged in the business of Spinning and Doubling of Yarn. The Company has its production facilities in the state of Telangana and Maharashtra.
A) Significant Accounting Policies
1) GENERAL
a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (âGAAPâ) of India under the historical cost convention on the accrual basis, except for certain tangible assets which are carried at revalued amounts. GAAP comprises mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 and the provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard required a change in accounting policy hitherto in use.
b) All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle to be less than 12 months for the purpose of current and non-current classification of assets and liabilities.
2) FIXED ASSETS
(i) Tangible Assets
Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Assets which are not ready for their intended use are disclosed under Capital Work-in-Progress.
(ii) Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
3) 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.
4) INVENTORIES
Inventories are valued at lower of cost and net realizable value. Cost of Raw Materials is computed by using âSpecific Identificationâ method and for other inventories by using âWeighted Averageâ method.
The cost in case of finished goods includes cost of purchase, cost of conversion and other costs (on the basis of normal operating capacity) incurred in bringing the inventories to their present location and condition.
5) 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. Export sales are recognized once the Bill of Lading is issued. Local sales are inclusive of excise duty, wherever applicable and net of sales tax.
6) 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 Statement of Profit and Loss.
7) DEPRECIATION Tangible Assets
Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Straight Line Method (SLM) Method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Plant and Machinery and Electrical Installations have been, on technical assessment, considered as continuous process plants as defined in the said Schedule and depreciation has been provided accordingly.
Intangible Assets
Intangible Assets are amortized over a period of 5 years.
Individual Assets costing less than Rs. 5000 are fully depreciated in the year of purchase.
8) EMPLOYEE BENEFITS
a) Provident Fund
Provident Fund is a defined contribution scheme and the contributions are charged to Statement of Profit and Loss as incurred.
b) Superannuation
Superannuation is a defined contribution plan and contribution is made to Life Insurance Corporation of India for eligible employees who have opted for the same as a percentage of salaries. The Company has no further obligations to the scheme beyond its monthly / annual contributions.
c) 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.
d) The employees are entitled to accumulate leaves as per the rules of the Company for future encashment. Liability for leave entitlement is provided for on the basis of the eligible leaves at the close of the year.
9) FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currency are recorded at rates that approximate the exchange rate prevailing on the date of respective transaction.
Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year. Monetary assets and liabilities in foreign currency, which are outstanding at the year end, are translated at the yearend closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss.
The premium or the discount arising at the inception of the forward exchange contracts related to underlying receivables and payables are amortized as income or expense over the period of the contracts.
10) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the year determined in accordance with the income tax law) and deferred tax charges or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).
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.
Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the Income Tax Act, 1961 based on convincing evidence that the Company will pay normal tax within the statutory time frame and the same is reviewed at each balance sheet date.
11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 that these liabilities are not likely to materialize. Contingent assets are not recognized or disclosed in the financial statements.
12) IMPAIRMENT
In accordance with AS 28 on âImpairment of Assetsâ, where there is an indication of impairment of the Companyâs 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 Statement of Profit and Loss whenever the carrying amount of such assets exceeds its recoverable amount.
Mar 31, 2015
1) GENERAL
a) The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") of India under the historical
cost convention on the accrual basis, except for certain tangible
assets which are carried at revalued amounts. GAAP comprises mandatory
accounting standards notified under the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act, 2013.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard required a change in accounting policy
hitherto in use.
b) All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule III to the Companies Act 2013. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle to be less
than 12 months for the purpose of current and non-current
classification of assets and liabilities.
2) FIXED ASSETS
(i) Tangible Assets
Tangible Assets are stated at cost net of recoverable taxes, trade
discounts and rebates and include amounts added on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of
Tangible Assets comprises its purchase price, borrowing cost and any
cost directly attributable to bringing the asset to its working
condition for its intended use, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the assets.
Subsequent expenditures related to an item of Tangible Asset are added
to its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Assets which are not ready for their intended use are disclosed under
Capital Work-in-Progress.
(ii) Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortisation/depletion and impairment loss, if
any. The cost comprises purchase price, borrowing costs, and any cost
directly attributable to bringing the asset to its working condition
for the intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the
intangible assets.
3) 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.
4) INVENTORIES
Inventories are valued at lower of cost and net realizable value. Cost
of Raw Materials is computed by using "Specific Identification" method
and for other inventories by using "Weighted Average" method.
The cost in case of finished goods includes cost of purchase, cost of
conversion and other costs (on the basis of normal operating capacity)
incurred in bringing the inventories to their present location and
condition.
5) 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. Export sales are
recognized once the Bill of Lading is issued. Local sales are
inclusive of excise duty, wherever applicable and net of sales tax.
6) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised 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 Statement of Profit and Loss.
7) DEPRECIATION
Tangible Assets
Depreciation on Fixed Assets is provided to the extent of depreciable
amount on the Straight Line Method. Depreciation is provided based on
useful life of the assets as prescribed in Schedule II to the Companies
Act, 2013. Plant and Machinery and Electrical Installations have been,
on technical assessment, considered as continuous process plants as
defined in the said Schedule and depreciation has been provided
accordingly.
Intangible Assets
Intangible Assets are amortised over a period of 5 years.
Individual Assets costing less than Rs. 5000 are fully depreciated in
the year of purchase.
8) EMPLOYEE BENEFITS
a) Provident Fund
Provident Fund is a defined contribution scheme and the contributions
are charged to Statement of Profit and Loss as incurred.
b) Superannuation
Superannuation is a defined contribution plan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions.
c) 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.
d) The employees are entitled to accumulate leaves as per the rules of
the Company for future encashment. Liability for leave entitlement is
provided for on the basis of the eligible leaves at the close of the
year.
9) FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currency are recorded at rates that
approximate the exchange rate prevailing on the date of respective
transaction.
Exchange differences arising on foreign exchange transactions settled
during the year are recognized in the Statement of Profit and Loss of
the year. Monetary assets and liabilities in foreign currency, which
are outstanding at the year end, are translated at the year end closing
exchange rate and the resultant exchange differences are recognized in
the Statement of Profit and Loss.
The premium or the discount arising at the inception of the forward
exchange contracts related to underlying receivables and payables are
amortized as income or expense over the period of the contracts.
10) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the income tax law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year).
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax on assets are recognised 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.
Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid
in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal tax within the
statutory time frame and the same is reviewed at each Balance Sheet
date.
11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
12) IMPAIRMENT
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
recognised in the Statement of Profit and Loss whenever the carrying
amount of such assets exceeds its recoverable amount.
Mar 31, 2014
1) GENERAL
a) The financial statements are prepared under the historical cost
convention in accordance with the Generally Accepted Accounting
Principles (ÂGAAP'') in India, the Accounting Standards as notified
under Companies (Accounting Standards) Rules, 2006, read with general
circular 15/2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013, the Provisions of the Companies
Act, 1956 and 2013 and on the accounting principle of going concern.
Expenses and Income to the extent considered payable and receivable,
respectively, are accounted for on accrual basis, except those with
significant uncertainties.
b) 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 disclosure
of an item or information in the financial statements is made relying
on these estimates. Any revision to accounting estimates is recognized
prospectively.
2) FIXED ASSETS
(i) All fixed assets are stated at cost-net of CENVAT / Value Added Tax
adjusted by revaluation in case of certain Land, Building, Plant &
Machinery and Electrical Installations, less accumulated depreciation /
amortization 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 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
recognised in the Statement of Profit and Loss whenever the carrying
amount of such assets exceeds its recoverable amount.
3) 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.
4) INVENTORIES
Inventories are valued at lower of cost and net realizable value. Cost
of Raw Materials is computed by using "Specific Identification" method
and for other inventories by using "Weighted Average" method.
The cost in case of finished goods includes cost of purchase, cost of
conversion and other costs (on the basis of normal operating capacity)
incurred in bringing the inventories to their present location and
condition.
5) 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. Export sales are
recognized once the Bill of Lading is issued. Local sales are inclusive
of excise duty, wherever applicable and net of sales tax.
6) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised 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 Statement of Profit and Loss.
7) DEPRECIATION
Depreciation is provided at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. Plant & Machinery and
Electrical Installations have been, on technical assessment, considered
as continuous process plants as defined in the said Schedule and
depreciation has been provided accordingly. Depreciation in respect of
various units is provided as below:
a) MEDAK SPINNING UNIT: Depreciation on Plant & Machinery and
Electrical Installations (including revalued assets) installed upto
31st March, 1992 has been charged under Written Down Value Method and
on additions thereafter under Straight Line Method. In respect of other
assets (including revalued assets) depreciation has been charged under
Written Down Value Method.
b) MEDAK DOUBLING UNIT: Depreciation is provided on Written Down Value
Method.
c) Other Units (Nagpur Spinning Unit, Shadnagar Yarn Processing Unit
and Knitting Unit): Depreciation is provided on Straight Line Method.
8) EMPLOYEE BENEFITS
a) Provident Fund
Provident Fund is a defined contribution scheme and the contributions
are charged to Statement of Profit and Loss as incurred.
b) Superannuation
Superannuation is a defined contribution plan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions.
c) 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.
d) The employees are entitled to accumulate leaves as per the rules of
the Company for future encashment. Liability for leave entitlement is
provided for on the basis of the eligible leaves at the close of the
year.
9) FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currency are recorded at rates that
approximate the exchange rate prevailing on the date of respective
transaction.
Exchange differences arising on foreign exchange transactions settled
during the year are recognized in the Statement of Profit and Loss of
the year. Monetary assets and liabilities in foreign currency, which
are outstanding at the year end, are translated at the year end closing
exchange rate and the resultant exchange differences are recognized in
the Statement of Profit and Loss.
The premium or the discount arising at the inception of the forward
exchange contracts related to underlying receivables and payables are
amortized as income or expense over the period of the contracts.
10) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the income tax law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year).
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax on assets are recognised 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.
Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid
in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal tax within the
statutory time frame and the same is reviewed at each Balance Sheet
date.
11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
Mar 31, 2013
1) GENERAL
a) The financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles ("GAAP") under the historical
cost convention (except for certain revalued fixed assets) on Ihe
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.
b) The preparation of financial statements in conformity wilh 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 disclosure
of an item or information In the financial statements are made relying
on these estimates. Any revision to accounting estimates is recognized
prospectively.
2) FIXED ASSETS
(i) All fixed assets are stated at cost net of CENVAT /Value Added Tax
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
respecl 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, Ihe 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 ils
net selling price and ils value in use. An impairment loss is
recognised in the Statement of Profit and Loss whenever the carrying
amount of such assets exceeds its recoverable amount,
3) 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.
4) INVENTORIES
Inventories are valued al lower of cost and net realizable value. Cosl
of Raw Material is computed by using "Specific Identification" method
and for other inventories by using "Weighted Average" method.
The cost in case of finished goods includes cost of purchase, cost of
conversion and other costs (on the basis of normal operating capacity)
incurred in bringing the inventories to their present location and
condition.
5) 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 inclusive
of excise duty, wherever applicable and net of sales tax.
6) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised as a part of the cosl of such
asset upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Slatemenl of Profit & Loss.
7) DEPRECIATION
Depreciation is provided at the rates and in the manner prescribed in
Schedule XIV of the Companies Act, 1956.
Plant & Machinery and Eiectrical Installations have been, on technical
assessment, considered as continuous process plants as defined In the
said Schedule and depreciation has been provided accordingly.
Depreciation in respect of various units is provided as below:
a) MEDAK SPINNING UNIT: Depreciation on Plant & Machinery and
Electrical Installations (including revalued assets) installed upto
31st March, 1992 has been charged under Written Down Value Method and
on additions thereafter under Straight Line Method. In respect of other
assets (including revalued assets) depre- ciation has been charged
under Written Down Value Method.
b) MEDAK DOUBLING UNIT: Depreciation is provided on Written Down Value
Method.
c) Other Units (Nagpur Spinning Unit, Shadnagar Yarn Processing Unit
and Knitting Unit): Depreciation is provided on Straight Line Method.
8) EMPLOYEE BENEFITS
a) Provident Fund
Provident Fund is a defined contribution scheme and the contributions
are charged to the Statement of Profit and Loss as incurred.
b) Superannuation
Superannuation is a defined contribution pfan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions,
c) Gratuity
Gratuity is a defined benefit retirement plan. The Company contributes
to the Scheme with Lile Insurance Corporation of India based on
actuarial valuation done by them as at the close of the financial year.
d) The employees are entitled to accumulate leaves as per the rules of
the Company for future encashment. Liability for leave entitlement is
provided for on the basis of the eligible leaves at the close of the
year.
9) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force at the date of transactions. Gains and losses resulting from
settlement of such transactions and from the transaction of monetary
assets and liabilities denominated in foreign currencies are recognised
in Statement of Profit and Loss. Premium in respect of forward foreign
exchange contract is recognised over the lile of the contracts. In
respect of Derivative Contracts, premium paid, provision for losses on
restatement and gains/ losses on settlement are recognised alongwrth
the underlying transactions and charged to Statement of Profit and
Loss.
10) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the income tax law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year). The deferred
tax charge or credit and the corresponding deferred tax liabilities or
assets are recognised using the tax rates that have been enacted or
substantively enacted by the Balance Sheet date. Deferred tax on assets
are recognised 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. Tax credit is recognized in respect
of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the
Income Tax Act, 1961 based on convincing evidence that the Company will
pay normal tax within the statutory time frame and the same is reviewed
at each Balance Sheet date.
11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 "he management
perception that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
Mar 31, 2012
1) GENERAL
a) The financial statements are prepared in accordance with Indian
Generally 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 recognises income and expenditure
on accrual basis except those with significant uncertainties.
b) 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 disclosure
of an item or information in the financial statements are made relying
on these estimates. Any revision to accounting estimates is recognised
prospectively.
2) FIXED ASSETS
a) All fixed assets are stated at cost net of CENVAT / Value Added Tax
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.
b) 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
recognised in the Statement of Profit and Loss whenever the carrying
amount of such assets exceeds its recoverable amount.
3) INVESTMENTS
Long term Investments are stated at cost and provision is made to
recognise any decline, other than temporary, in the value of such
investments.
4) INVENTORIES
Inventories are valued at lower of cost and net realisable value. Cost
of raw material is computed by using "Specific Identification"
method and for other inventories "Weighted Average" method.
The cost in case of finished goods includes cost of purchase, cost of
conversion and other costs (on the basis of normal operating capacity)
incurred in bringing the inventories to their present location and
condition.
5) SALES
Revenue is recognised 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
inclusive of excise duty, wherever applicable and net of sales tax.
6) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised 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 statement of Profit & Loss.
7) DEPRECIATION
Depreciation is provided at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. Plant & Machinery and
Electrical Installations have been, on technical assessment, considered
as continuous process plants as defined in the said Schedule and
depreciation has been provided accordingly.
Depreciation in respect of various units is provided as below:
a) MEDAK SPINNING UNIT: Depreciation on Plant & Machinery and
Electrical Installations (including revalued assets) installed upto
31st March, 1992 has been charged under Written Down Value Method and
on additions thereafter under Straight Line Method. In respect of other
assets (including revalued assets) depreciation has been charged under
Written Down Value Method.
b) MEDAK DOUBLING UNIT: Depreciation is provided on Written Down Value
Method. 1
c) Other Units (Nagpur Spinning Unit, Shadnagar Yarn Processing Unit
and Knitting Unit): Depreciation is prbvided o'n Straight Line Method.
8) EMPLOYEE BENEFITS
a) Provident Fund
Provident Fund is a defined contribution scheme and the contributions
are charged to Statement of Profit and Loss as incurred.
b) Superannuation
Superannuation is a defined contribution plan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions. '
c) Gratuity
Gratuity is a defined retirement benefit 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.
d) The employees are entitled to accumulate leave as per the rules of
the Company for future encashment / availment. Liability for leave
encashment is provided for on the basis of the such eligible leaves at
the close of the year.
9) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force at the date of transactions. Gains and losses resulting from
settlement of such transactions and from the transaction of monetary
assets and liabilities denominated jn foreign currencies are recognised
in Statement of Profit and Loss. Premium in respect of forward foreign
exchange contract is recognised over the life of the contracts. In
respect of Derivative Contracts, premium paid, provision for losses on
restatement and gains/ losses on settlement are recognised alongwith
the underlying transactions and charged to Statement of Profit and
Loss. , s
10) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the income tax law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year). The deferred
tax charge or credit and the corresponding deferred tax liabilities or
assets are recognised using the tax rates that have been enacted or
substantively enacted by the Balance Sheet date. Deterred tax on assets
are recognised and carried forward only if there is a virtual /
reasonable certainty of realisation of such assets in near future and
are reviewed for their appropriateness of their respective carrying
value at each Balance Sheet date. Tax credit is recognised in respect
of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the
Income Tax Act, 1961 based on convincing evidence that the Company will
pay normal tax within the statutory time frame and the same is reviewed
at each Balance Sheet date.
11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINQENT.ASSET, ira s,
A provision is made based on a reliable estimate when if is probale
that an! out low 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 that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
Mar 31, 2011
A) GENERAL
a) The financial statements are prepared in accordance with Indian
Generally 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.
b) 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 disclosure
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
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 Companys 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
recognised 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
Inventories are valued at lower of cost and net realizable value. Cost
of Raw Material is computed by using "Specific Identification" method
and for other inventories "Weighted Average" method.The cost in case of
finished goods includes cost of purchase, cost of conversion and other
costs (on the basis of normal operating capacity) incurred in bringing
the inventories to their present location and condition.
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
inclusive of excise duty, wherever applicable and net of sales tax.
F) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised 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
Depreciation is provided at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. Plant & Machinery and
Electrical Installations have been, on technical assessment, considered
as continuous process plants as defined in the said Schedule and
depreciation has been provided accordingly.
Depreciation in respect of various units is provided as below:
a) MEDAK SPINNING UNIT: Depreciation on Plant & Machinery and
Electrical Installations (including revalued assets) installed upto
31st March, 1992 has been charged under written Down Value Method and
on additions thereafter under Straight Line Method. In respect of other
assets (including revalued assets) depreciation has been charged under
Written Down Value Method.
b) MEDAK DOUBLING UNIT: Depreciation is provided on Written Down Value
Method.
c) Other Units (Nagpur Spinning Unit, Shadnagar Yarn Processing Unit
and Knitting Unit): Depreciation is provided on Straight Line Method.
H) EMPLOYEE BENEFITS
a) PROVIDENT FUND
Provident Fund is a defined contribution scheme and the contributions
are charged to the Profit and Loss Account as incurred.
b) SUPERANNUATION
Superannuation is a defined contribution plan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions.
c) 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.
d) The employees are entitled to accumulate leaves as per the rules of
the Company for future encashment/availment. Liability for leave
encashment is provided for on the basis of the eligible leaves at the
close of the year.
I) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force on the date of transactions. Gains and losses resulting from
settlement of such transactions and from the transaction of monetary
assets and liabilities denominated in foreign currencies are recognised
in Profit and Loss Account. Premium in respect of forward foreign
exchange contract is recognised over the life of the contracts. In
respect of Derivative Contracts, premium paid, provision for losses on
restatement and gains/ losses on settlement are recognised along with
the underlying transactions and charged to Profit and Loss Account.
J) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the Income Tax Law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year). The deferred
tax charge or credit and the corresponding deferred tax liabilities or
assets are recognised using the tax rates that have been enacted or
substantively enacted by the Balance Sheet date. Deferred tax on assets
are recognised and carried forward only if there is a virtual /
reasonable certainty of realisation of such assets in near future and
are reviewed for their appropriateness of their respective carrying
value at each Balance Sheet date. Tax credit is recognized in respect
of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the
Income Tax Act, 1961 based on convincing evidence that the Company will
pay normal tax within the statutory time frame and the same is reviewed
at each Balance Sheet date.
K) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
Mar 31, 2010
A) GENERAL
a) The financial statements are prepared in accordance with Indian
Generally 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 recognises income and expenditure
on accrual basis except those with significant uncertainties.
b) 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 disclosure
of an item or information in the financial statements are made relying
on these estimates. Any revision to accounting estimates is recognised
prospectively.
B) FIXED ASSETS
(i) All fixed assets are stated at
cost(netofCENVAT/ValueAddedTax)andadjustedbyrevaluationincaseofcertainLand,
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 Companys 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
recognised 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
recognise any decline, other than temporary, in the value of such
investments.
D) INVENTORIES
Inventories are valued at lower of cost and net realisable value. Cost
of Raw Material is computed by using "Specific identification" method
and for other inventories "Weighted Average" method.The cost in case of
finished goods includes cost of purchase, cost of conversion and other
costs (on the basis of normal operating capacity) incurred in bringing
the inventories to their present location and condition.
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 inclusive
of excise duty, wherever applicable and net of sales tax.
F) BORROWING COST
Borrowing Costs directly attributable to acquisition and construction
of qualifying assets are capitalised 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
Depreciation is provided at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. Plant & Machinery and
Electrical Installations have been, on technical assessment, considered
as continuous process plants as defined in the said Schedule and
depreciation has been provided accordingly.
Depreciation in respect of various units is provided as below:
a) MEDAK SPINNING UNIT: Depreciation on Plant & Machinery and
Electrical Installations (including revalued assets) installed upto 31
* March, 1992 has been charged underwritten Down Value Method and on
additions thereafter under Straight Line Method. In respect of other
assets (including revalued assets) depreciation has been charged under
Written Down Value Method.
b) MEDAK DOUBLING UNIT: Depreciation is provided on Written Down Value
Method.
c) Other Units (Nagpur Spinning Unit, ShadnagarYarn Processing Unit and
Knitting Unit): Depreciation is provided on Straight Line Method.
H) EMPLOYEE BENEFITS
a) PROVIDENT FUND
Provident Fund is a defined contribution scheme and the contributions
are charged to the Profit & Loss Account as incurred.
b) SUPERANNUATION
Superannuation is a defined contribution plan and contribution is made
to Life Insurance Corporation of India for eligible employees who have
opted for the same as a percentage of salaries. The Company has no
further obligations to the scheme beyond its monthly / annual
contributions.
C) 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.
d) LEAVE ENCASHMENT/ENTITLEMENT
The employees are entitled to accumulate leaves as per the rules of the
Company for future encashment. Liability for leave encashment is
provided for on the basis of the eligible leaves at the close of the
year.
I) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force at the date of transactions. Gains and losses resulting from
settlement of such transactions and from the transaction of monetary
assets and liabilities denominated in foreign currencies are recognised
in Profit and Loss Account. Premium in respect of forward foreign
exchange contract is recognised over the life of the contracts. In
respect of Derivative Contracts, premium paid, provision for losses on
restatement and gains/ losses on settlement are recognised alongwith
the underlying transactions and charged to Profit and Loss Account.
J) TAXATION
Income tax expenses comprise current tax (i.e., amount of tax for the
year determined in accordance with the Income Tax Law) and deferred tax
charges or credit (reflecting the tax effects of timing differences
between accounting income and taxable income of the year). The deferred
tax charge or credit and the corresponding deferred tax liabilities or
assets are recognised using the tax rates that have been enacted or
substantively enacted by the Balance Sheet date. Deferred tax on assets
are recognised and carried forward only if there is a virtual /
reasonable certainty of realisation of such assets in near future and
are reviewed for their appropriateness of their respective carrying
Value at each Balance Sheet date. Tax credit is recognised in respect
of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the
Income Tax Act, 1961 based on convincing evidence that the Company will
pay normal tax within the statutory time frame and the same is reviewed
at each Balance Sheet date.
K) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
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 that these liabilities are not likely to materialise.
Contingent assets are not recognised or disclosed in the financial
statements.
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