Accounting Policies of Golden Carpets Ltd. Company

Mar 31, 2024

24.1 Significant Accounting Policies

24.1.1 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.
Amounts disclosed as revenue are exclusive of taxes and net of returns, Trade
Allowances, Rebates, other similar allowances, Goods and Service Tax and
amounts collected on behalf of third parties, if any.

The Company recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the Company and
specific criteria have been met for each of the Company''s activities as described
below:

24.1.1. a Sale of Goods

Revenue from the sale of goods is recognised when the goods are delivered, and
titles have passed, at which moment all the following conditions are satisfied:

• The Company has transferred to the buyer significant risks and rewards of
ownership of the goods;

• The Company retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that economic benefits associated with the transaction will flow to the
Company; and

• The costs incurred or to be incurred in respect of the transaction can be measured
reliably.

24.1.1. b Dividend Income

Dividend income from investments is recognised when the Company''s right to
receive payment has been established (provided that it is probable that the
economic benefits will flow to the Company and the amount of income can be
measured reliably).

24.1.1. c Interest Income

Interest income from a financial asset is recognised when it is probable that the
economic benefits will flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time basis by reference to the
principal amount outstanding and at the effective interest rate. Effective interest
rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset''s net carrying amount on initial
recognition.

24.1.2 Inventories

Inventories are measured at cost and net realizable value, whichever is lower. Net
realizable value is the estimated selling price in the ordinary course of business
less estimated cost necessary to make sale. Cost in respect of raw materials and
stock in trade are determined on FIFO basis. Costs in respect of all other
Inventories are computed on weighted average basis method. Finished goods and
process stock include cost of conversion and other costs incurred in acquiring the
inventory and bringing them to their present location and condition.

Inventories are written down to net realizable value item by item except where it is
appropriate to group similar or related items. When a decline in the price of
materials, indicates that the cost of the finished products exceeds net realizable
value, the materials are written down to their replacement cost. When the
circumstances that previously caused inventories to be written down below cost no
longer exist or when there is clear evidence of an increase in net realizable value
because of changed economic circumstances, the amount of the write-down is
reversed so that the new carrying amount is the lower of the cost and the revised
net realizable value. Inventories are recognised as expense in the period in which
the related revenue is recognised.

24.1.3 Property, Plant and Equipment

24.1.3. a Recognition of Property, Plant and Equipment

Property, plant and equipment are tangible items that are held for use in the
production or supply of goods and services, rental to others or for administrative
purposes and are expected to be used during more than one period. The cost of an
item of property, plant and equipment is recognised as an asset if an only if it is
probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. Freehold land is
carried at cost less accumulated impairment losses. All other items of property,
plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost of an item of property, plant and equipment
comprises:

• Its purchase price, all costs including financial costs till commencement of
commercial production are capitalized to the cost of qualifying assets.
CENVAT/Tax credit, if any, are accounted for by reducing the cost of capital goods;

• Any other costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended by
management.

All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.

24.1.3. b Depreciation of Property, Plant and Equipment

Each part of an item of property, plant and equipment with a cost that is significant
in relation to the total cost of the item is depreciated separately on straight-line
method. Parts of plant and equipment that are technically advised to be replaced at
prescribed intervals / periods of operation, insurance spares and cost of inspection
/ overhauling are depreciated separately based on their specific useful life
provided these are of significant amounts. The depreciation charge for each period
is recognised in profit or loss unless it is included in the carrying amount of another
asset. Depreciable amount of an item of property, plant and equipment is arrived at
after deducting estimated residual value. The depreciable amount of an asset is
allocated on a systematic basis over its useful life as disclosed in Note 4. The
Company reviews the residual value and useful life at each financial year-end and,
if expectations differ from previous estimates, the residual value and useful lives
are changed prospectively and accounted for as a change in accounting estimate.
Depreciation commences when the item of property, plant and equipment is in the
location and condition necessary for it to be capable of operating in the manner
intended by management. Depreciation ceases at the earlier of the date that the
asset is classified as held for sale (or included in a disposal group that is classified
as held for sale) and the date that the asset is derecognized. The Company review
the depreciation method at each financial year- end and if, there has been a
significant change in the expected pattern of consumption of the future economic
benefits embodied in the asset, the method is changed to reflect the changed
pattern. Such a change is accounted as a change in accounting estimate on
prospective basis.

24.1.3. c Compensation for Impairment

The Company recognises compensation from third parties for items of property,
plant and equipment that were impaired, lost or given up in profit or loss when the
compensation becomes receivable.

24.1.3. d Derecognition of Property, Plant and Equipment

The carrying amount of an item of property, plant and equipment is derecognized
on disposal or when no future economic benefits are expected from its use or
disposal. The gain or loss from the derecognition of an item of property, plant and
equipment is recognised in profit or loss when the item is derecognized.

24.1.4 Leases

The Company determines an arrangement as a lease based on the substance of
the arrangement after assessing whether the arrangement is dependent on the
use of specific asset or assets and whether the arrangement conveys a right to use
the asset or assets. The Company classifies all leases into finance and operating
leases at the earlier of the date of the lease agreement and the date of commitment
by the parties to the principal provisions of the lease. A lease is classified as a
finance lease if it transfers substantially all the risks and rewards incidental to
ownership. A lease is classified as an operating lease if it does not transfer
substantially all the risks and rewards incidental to ownership. The Company has
applied accounting for leases for assets taken on lease. The Company has not
given assets on lease.

24.1.4. a Finance lease as lessee

The Company recognises property leased under finance leases at the lower of the
fair value of the lease property and present value of minimum lease payments.
Lease payments are discounted at the interest rate implicit in the lease to calculate
present value of minimum lease payments. Initial direct costs are added to the
amount recognised as an asset. Minimum lease payments are apportioned
between the finance charge and the reduction of the outstanding liability.
Contingent rents are charged as expenses in the period in which they are incurred.
The leased property is depreciated as per the depreciation policy specified in Note
2.1.3.

24.1.4. b Operating lease as lessee

Operating lease payments are recognised as an expense on a straight-line basis
over the lease term, except where another systematic basis is more representative
of the time pattern in which economic benefits from the leased asset are consumed
or the payments to the lessor are structured to increase in line with expected
general inflation to compensate for the lessor''s expected inflationary cost
increases. Where payments to the lessor are structured to increase in line with
expected general inflation to compensate for the lessor''s expected inflationary
cost increases, lease expense is recognised based on the contractual lease
payments. Contingent rentals arising under operating leases are recognised as an
expense in the period in which they are incurred.

24.1.5 Employee Benefits

24.1.5. a Short-term Employee Benefits

Short-term employee benefits are employee benefits (other than termination
benefits) that are expected to be settled wholly before twelve months after the end

of the reporting period in which the employees render the related service. Short¬
term employee benefits include salaries, wages, social security contributions,
bonus, paid annual leave etc. Liabilities recognised in respect of short-term
employee benefits are measured at the undiscounted amount of the benefits
expected to be paid in.

24.1.7 Foreign currency transactions and translations

Functional currency of the Company is Indian rupee. The financial statements
have been presented under its functional currency. Any transaction that is
denominated in a currency other than the functional currency is regarded as
foreign currency transaction. All foreign currency transactions are recorded, on
initial recognition in the functional currency, by apply to the foreign currency
amount the spot exchange rate between the functional currency and the foreign
currency at the date of the transaction. In case of consideration received in
advance, the exchange rate prevailing on the date of receipt or payment of
advance is considered when subsequently the related asset is given up or received
to the extent of advance consideration.

At the end of the reporting period:

1. Foreign Currency Monetary items are translated using the exchange rate for
immediate delivery at the end of the reporting period;

2. Non-Monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate at the date of the transaction; and

3. Non-Monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured.

Exchange difference arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they were translated on initial
recognition during the period or in previous financial statements are recognised in
profit or loss in the period in which they arise.

24.1.8 Borrowing Costs

Interest and other costs that the Company incurs in connection with the borrowing
of funds are identified as borrowing costs. The Company capitalises borrowing
costs that are directly attributable to the acquisition, construction or production of a
qualifying asset as part of the cost of that asset. Other borrowing costs are
recognised as an expense in the period in which it is incurred. A qualifying asset is
an asset that necessarily takes a substantial period of time to get ready for its
intended use. The Company identifies the borrowings into specific borrowings and
general borrowings. Specific borrowings are borrowings that are specifically taken
for the purpose of obtaining a qualifying asset. General borrowings include all other
borrowings and also the amount outstanding as on the balance sheet date of
specific borrowings. Borrowing cost incurred actually on specific borrowings are
capitalised to the cost of the qualifying asset. For general borrowings, the company
determines the amount of borrowing costs eligible for capitalisation by applying a
capitalisation rate to the expenditures on the qualifying asset based on the
weighted average of the borrowing costs applicable to general borrowings. The

capitalisation on borrowing costs commences when the company incurs
expenditure for the asset, incurs borrowing cost and undertakes activities that are
necessary to prepare the asset for its intended use or sale. The capitalisation of
borrowing costs is suspended during extended periods in which active
development of a qualifying asset is suspended. The capitalisation of borrowing
costs ceases when substantially all the activities necessary to prepare the
qualifying asset for its intended use or sale are complete.

24.1.9. a Recognition, classification, measurements and derecognition of Financial
Assets

Financial assets include cash and cash equivalents, trade and other receivables,
investments in securities and other eligible current and non-current assets. At
initial recognition, all financial assets are measured at fair value. Such financial
assets are subsequently classified and measured under one of the following three
categories according to the purpose for which they are held and contractual Cash
Flow characteristics. Financial assets are reclassified only when the purpose for
which they are held changes. Financial assets are derecognised when the right to
cash flows from the financial asset expires or when the financial asset is
transferred resulting in transfer of significant risks and rewards to the buyer. Where
significant risks and rewards are retained on transfer of a financial asset, the
financial asset is not derecognised, and a financial liability is recognised for the
consideration received. Where the transfer of financial asset results in partial
transfer of risks and rewards, the asset is derecognised if the buyer obtains the
right to sell the asset to other party unilaterally without attaching any conditions
otherwise the financial asset continues to the recognised to the extent of
continuing involvement.

24.1.9. a.i Financial Assets at amortised cost

Financial assets at amortised cost, at the date of initial recognition, are held to
collect contractual cash flows of principal and interest on principal amount
outstanding on specified dates. These financial assets are intended to be held until
maturity. Therefore, they are subsequently measured at amortised cost by
applying the Effective Interest Rate (EIR) method to the gross carrying amount of
the financial asset. The EIR amortisation is included as interest income in the profit
or loss. The losses arising from impairment are recognised in the profit or loss.

24.1.9. a.ii Financial asset at Fair Value through Other Comprehensive Income
(FVOCI)

Financial asset at FVOCI, at the date of initial recognition, are held to collect
contractual cash flows of principal and interest on principal amount outstanding on
specified dates, as well as held for selling. Therefore, they are subsequently
measured at each reporting date at fair value, with all fair value movements
recognised in Other Comprehensive Income (OCI). Interest income calculated
using the Effective Interest Rate (EIR) method, impairment gain or loss and foreign
exchange gain or loss are recognised in the Statement of Profit and Loss. On
derecognition of the asset, cumulative gain or loss previously recognised in Other
Comprehensive Income is reclassified from the OCI to Statement of Profit and
Loss.

24.1.9. a.iii Financial assets at Fair Value through Profit or Loss (FVPL)

Financial Assets at FVPL, at the date of initial recognition, are held for trading, or
which are measured neither at Amortised Cost nor at Fair Value through OCI.
Therefore, they are subsequently measured at each reporting date at fair value,
with all fair value movements recognised in the Statement of Profit and Loss.

24.1.9. b Impairment of Financial Assets

The Company recognizes the impairment on financial assets based on the
expected credit loss model for the financial assets which are not measured at fair
value through profit or loss. In case of trade receivables, the Company follows a
simplified approach wherein an amount equal to lifetime ECL is measured and
recognized as loss allowance. In case of other financial assets expected credit
losses are measured at an amount equal to 12-month ECL unless there has been
significant increase in credit risk from initial recognition in which case these are
measured at lifetime expected credit loss. The amount of expected credit losses or
reversal that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognized is recognized as an impairment gain or
loss in the profit and loss for the period.

24.1.9. c Recognition, classification, measurement and derecognition of financial
liabilities

Financial liabilities include long-term and short- term loans and borrowings, trade
and other payables and other eligible current and non- current liabilities. All
financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and other payables, net of directly attributable transaction costs. The
Company derecognises a financial liability when the obligation specified in the
contract is discharged, cancelled or expires.

After initial recognition, financial liabilities are classified under one of the following
two categories:

24.1.9. c.i Financial liabilities at amortised cost

After initial recognition, such financial liabilities are subsequently measured at
amortised cost by applying the Effective Interest Rate (EIR) method to the gross
carrying amount of the financial liability. The EIR amortisation is included in finance
expense in the statement profit or loss.

24.1.9. c.ii Financial liabilities at Fair Value through Profit or Loss (FVPL)

Financial Liabilities at FVPL are those which are designated as such on initial
recognition, or which are held for trading. Fair value gains / losses attributable to
changes in own credit risk is recognised in OCI. These gains /losses are not
subsequently transferred to Statement of Profit and Loss. All other changes in fair
value of such liabilities are recognised in the Statement of Profit and Loss.

24.1.10 Off-setting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in
the balance sheet if there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, to realise
assets and settle liabilities simultaneously.

24.1.11 Earnings per Share

Basic earnings per share is calculated by dividing the profit or loss for the period
attributable to the equity holders of the company by the weighted average number
of ordinary shares outstanding during the year. For the purpose of calculating
diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares. (Refer Note
23)

24.1.12 Impairment of Non-Financial Assets

The Company reviews the carrying amounts of its Property, Plant and Equipment,
including Capital Work in progress of a “Cash Generating Unit” (CGU) at the end of
each reporting period to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the assets is estimated in order to determine the extent of
the impairment loss (if any). When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of
the Cash Generating Unit to which the asset belongs.

Recoverable amount is determined:

i) In case of individual asset, at higher of the fair value less cost to sell and value in
use; and

ii) In case of cash generating unit (a Company of assets that generates identified,
independent cash flows), at the higher of the cash generating unit''s fair value less
cost to sell and the value in use.

If the recoverable amount of an asset (or cash generating unit) is estimated to be
less than its carrying amount, the carrying amount of the asset (or cash-generating
unit) is reduced to its recoverable amount. An impairment loss is recognized
immediately in the Statement of Profit and Loss.

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Mar 31, 2014

I. Basis of Preparation of Financial Statements:

Financial statements have been prepared and presented under historical cost convention in accordance with the accounting principles generally accepted in India having due regard to fundamental accounting assumptions of going concern, consistency and accrual and comply with the Accounting Standards referred to in Sec.211 (3C) of the Companies Act, 1956(''the Act'') which as per a clarification issued by the Ministry of Corporate affairs continue to apply under section 133 of the Companies Act 2013 ( which has superseded section 211(3c) of the Companies Act 1956 w.e.f 12 September 2013) as applicable and with the relevant provisions of the Companies Act, 1956.

II. Use of Estimates:

The preparation 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 estimates are recognized in the period in which the results are known / materialized.

III. Revenue Recognition:

Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of products are transferred to customers. Revenue from domestic sales of products is recognized on dispatch of products. Revenue from products is stated inclusive of duties, taxes but exclusive of returns, and applicable trade discounts and allowances.

Interest accrues on the time basis, determined by the amount outstanding and the rate applicable.

IV. Fixed Assets:

Fixed assets are carried at cost of acquisition less accumulated depreciation.

Cost includes non-refundable taxes, duties, freight, borrowing costs and other incidental expenses related to the acquisition and installation of the respective assets.

Fixed assets which are found to be not usable or retired from active use or when no further benefits are expected from their use are removed from the books of account and the difference if any, between the cost of such assets and the accumulated depreciation thereon is charged to Statement of Profit & Loss.

V. Depreciation:

Depreciation on fixed assets under Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956

VI Valuation of Inventories:

Inventories are valued at the lower of cost (or) net realizable value.

Cost is arrived at by using weighted average method and includes all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

VII Tax Expense:

Deferred tax resulting from "Timing Difference" between book profit and taxable profit is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future.

Provision is made for tax on Income is as per the applicable provisions of Income Tax Act, 1961.

VIII Foreign Exchange Transactions:

Transactions denominated in foreign currency are accounted for initially at the exchange rate prevailing on the date of transaction and any gain or losses arising due to exchange differences arising on settlement are accounted for in the statement of profit or Loss.

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Mar 31, 2012

Basis of Accounting:

The company maintains its accounts on accrual basis following historical cost convention in compliance with the Accounting Standards referred to in Section 211 (3c) and other requirements of the Companies Act, 1956.

Inventories:

Inventories are valued as under:

i) Raw Materials, Components, Stores, Spares and Work-in-Progress are valued at Cost.

ii) Finished goods are valued at lower of cost or net realisable value, Method of Valuation is on the same basis as in last year.

Depreciation:

Depreciation on original cost and on additions of Fixed Assets is provided on pro rata basis on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. The basis of providing depreciation for the current year is on the same basis as in the last year.

Revenue Recognition:

The sales are recognized only in the basis of goods dispatched and invoices raised.

Fixed Assets: *

Fixed Assets are stated at cost of acquisition including appropriate direct expenses after adjustments for any exchange fluctuations related to a particular asset, less depreciation.

Prior Period Items:

Expenditure / Income relating to previous year is shown in the accounts under the prior period Adjustments account as per the provisions of AS-5 (Net Profit or Loss for the Period, Prior period Items And Changes in the Accounting Policies) issued by The Institute of Chartered Accountants of India.

Effects of Changes in Foreign Exchange Rates:

The exchange fluctuations arising on foreign currency transactions are recognized as income/expenses by applying the rate applicable on the date of transaction. The exchange difference arising on repayment obligations for the purpose of acquiring fixed assets is adjusted in the carrying amount of the respective fixed assets by applying the closing rate.

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Mar 31, 2010

Basis of Accounting:

The company maintains its accountants on accrual basis following historical cost convention in compliance with the Accounting Standards referred to in Section 211 (3c) and other requirements of the Companies Act, 1956.

Inventories:

Inventories are valued as under:

i) Raw Materials, Components, Stores, Spares and Work-in-Progress are valued at Cost.

ii) Finished goods are valued at lower of cost or net realisable value, Method of Valuation is on the same basis as in last year.

Depreciation Accounting:

Depreciation on original cost and on additions of Fixed Assets is provided on pro rata basis on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. The basis of providing depreciation for the current year is on the same basis as in the last year

Revenue Recognition

Sale is recognized on dispatch to the customers and on raising of invoice.

Accounting of Fixed Assets:

Fixed assets are stated at cost of acquisition including appropriate direct expenses after adjustments for any exchange fluctuations related to a particular asset, less depreciation.

Effects of Changes in Foreign Exchange Rates:

The exchange fluctuations arising on foreign currency transactions is recognized as income/expenses by applying the rate applicable on the date of transaction. The exchange difference arising on repayment obligations for the purpose of acquiring fixed assets is adjusted in the carrying amount of the respective fixed assets by applying the closing rate.