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Accounting Policies of Tuni Textile Mills Ltd. Company
Mar 31, 2025
Note 2: MATERIAL ACCOUNTING POLICIES
2.1) STATEMENT OF COMPLIANCE
a) These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of
the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and
other relevant provisions of the Act.
b) The financial statements of the Company for the year ended 31st March, 2024 were approved for issue in
accordance with the resolution of the Board of Directors on 28th May 2024.
2.2) BASIS OF PREPARATION & MEASUREMENT
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied
consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as
current or non-current as per the Company''s normal operating cycle and other criteria as set out in the Division II of
Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets
for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose of current or non-current classification of assets and liabilities.
The financial statements have been prepared on a historical cost basis, except for the following:
a) Certain financial assets and liabilities that are measured at fair value (refer- Accounting policy regarding
financials instruments).
b) Defined benefit plans -present value of defined benefit obligation unless otherwise indicated.
The Company''s accounting policies and disclosures require the measurement of fair values for, both financial assets
and liabilities.
The Company has an established control framework with respect to the measurement of fair values. The
management regularly reviews significant unobservable inputs and valuation adjustments. If third party information
is used to measure fair values, then the management assesses the evidence obtained from the third parties to
support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value
hierarchy in which such valuations should be classified.
When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as
far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.
⢠Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
⢠Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
Further information about the assumptions made in measuring fair values is included in the Note 43.
2.3) FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Indian Rupees, the functional currency of the Company. All amounts
have been rounded-off to the nearest lakhs, unless otherwise indicated. Items included in the financial statements of
the Company are recorded using the currency of the primary economic environment in which the Company operates
(the ''functional currency'').
2.4) REVENUE RECOGNITION
The Company derives revenues primarily from sale of manufactured goods.
Effective April 1, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for
determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and
Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the retrospective effect method. The
adoption of the new standard did not have a material impact on the Company.
Sale of Goods
Revenue from sale of products is recognised when control of the products has transferred, being when the products
are delivered to the customer. Delivery occurs when the products have been shipped or delivered to the specific
location as the case may be, the risks of loss has been transferred, and either the customer has accepted the products
in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have
been satisfied. Sale of products includes related ancillary services, if any.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of
the transaction prices for the time value of money.
Sale of Services
Revenue from services is recognized by measuring progress towards satisfaction of performance obligation for the
services rendered.
Other operating revenue - Export incentives
The benefits, on account of entitlement to import duty free raw material under the Advance License Scheme in
respect of goods already exported, are not valued and brought into the books in the year of export. The raw materials
are recorded at cost at which they are procured in the year of import.
The benefits under FMS/FPS/Incremental Export Incentivisation Scheme and Duty Drawback Scheme are recognized
when the exports are made.
2.5) EMPLOYEE BENEFITS
a) Short term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short-term
employee benefits. Short-term employee benefits are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Short-term benefits such as salaries, wages, bonus, ex gratia, short-term compensation absences, etc., are
determined on an undiscounted basis and recognized in the period in which the employee renders the related
service.
b) Post-Employment Benefits
Defined Contribution Plans
Obligations for contributions to defined contribution plans such as Provident Fund maintained with Regional
Provident Fund Office and Employees State Insurance Corporation (''ESIC'') are expensed as the related service
is provided.
Defined Benefit Plans
The following post - employment benefit plans are covered under the defined benefit plans:
⢠Gratuity Fund
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The
Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective employee''s salary and the tenure of
employment with the Company. The calculation of defined benefit obligations is performed annually by a
qualified actuary using the projected unit credit method.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognized in the period in which they occur, directly in other comprehensive income.
c) Other Long-Term Employee Benefits
Compensated Absences
The Company does not have any leave encashment policy. Further any unutilized leave at the end of the year is
lapsed and not eligible for carry forward.
2.6) FOREIGN CURRENCY TRANSACTIONS AND TRANSCLATION
Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the
reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit
and Loss except to the extent of exchange differences which are regarded as an adjustment to finance costs on
foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are
capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the
exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on
the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in
OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
2.7) ACCOUNTING FOR TAXES ON INCOME
Income tax expense for the period comprises of current tax and deferred tax. It is recognised in the Statement of
Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in
equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year using applicable tax rates at the Balance
Sheet date, and any adjustment to taxes in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the
probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting
date and recognised to the extent that it has become probable that future taxable profits will be available against
which they can be used.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets
and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the
same taxation authority.
MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off
against regular tax payable within the stipulated statutory period.
2.8) PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost comprises of purchase price and any attributable cost such as duties, freight,
borrowing costs, erection and commissioning expenses incurred in bringing the asset to its working condition for its
intended use. If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted and depreciated for as separate items (major components) of property, plant and equipment.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when 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. All other repairs and maintenance are charged to the Statement of profit and loss
during the period in which they are incurred.
Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of
profit and loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as
"Capital work-in-progress".
2.9) INTANGIBLE ASSETS
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less
accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs,
and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on
foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible
assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be
measured reliably.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when
the asset is derecognised.
2.10) INVESTMENT PROPERTIES
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Investment property is measured at its cost, including related
transaction costs and where applicable borrowing costs less depreciation and impairment if any.
2.11) DEPRECIATION
Depreciation on Property, Plant & Equipment is provided on straight line method at the rates and in the manner
specified in Schedule II to the Companies Act, 2013. In the case of revalued assets, depreciation is calculated on
straight line method on the revalued amounts as determined by the valuer.
Depreciation on Property, Plant & Equipment added/disposed-off/discarded during the period has been provided on
the pro-rata basis with reference to the date of addition/disposal/discarding.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each
financial year end and adjusted prospectively, if appropriate.
2.12) AMORTIZATION
Intangible assets (Application Software) acquired by the Company are amortised on a straight line basis over its
useful life i.e. three years, as decided by the management.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted
prospectively, if appropriate.
2.13) BORROWING COSTS
Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its intended use.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
2.14) LEASES
As a Lessee
The Company assesses whether a contract is, or contains a lease, at inception of the contract. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset,
the Company assesses whether: i) the contract involves the use of an identified asset ii) the Company has substantially
all of the economic benefits from use of the asset through the period of the lease and iii) the Company has the right to
direct the use of the asset.
At the commencement date of the lease, the Company recognises a right-of-use asset and a corresponding lease
liability for all lease arrangements in which it is lessee, except for short-term leases (leases with a term of twelve
months or less), leases of low value assets and, for contract where the lessee and lessor has right to terminate a lease
without permission from the other party with no more than an insignificant penalty. The lease expense of such short¬
term leases, low value assets leases and cancellable leases, are recognised as an operating expense on a straight-line
basis over the term of the lease.
At commencement date, lease liability is measured at the present value of the lease payments to be paid during non¬
cancellable period of the contract, discounted using the incremental borrowing rate. The right-of-use assets is initially
recognised at the amount of the initial measurement of the corresponding lease liability, lease payments made at or
before commencement date less any lease incentives received and any initial direct costs.
Subsequently the right-of-use asset is measured at cost less accumulated depreciation and any impairment losses.
Lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using effective interest rate method) and reducing the carrying amount to reflect the lease payments made. The right-
of-use asset and lease liability are also adjusted to reflect any lease modifications or revised in-substance fixed lease
payments.
Mar 31, 2024
Note 2: MATERIAL ACCOUNTING POLICIES
2.1) STATEMENT OF COMPLIANCE
a) These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of
the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and
other relevant provisions of the Act.
b) The financial statements of the Company for the year ended 31st March, 2024 were approved for issue in
accordance with the resolution of the Board of Directors on 28th May 2024.
2.2) BASIS OF PREPARATION & MEASUREMENT
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied
consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as
current or non-current as per the Company''s normal operating cycle and other criteria as set out in the Division II of
Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets
for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose of current or non-current classification of assets and liabilities.
The financial statements have been prepared on a historical cost basis, except for the following:
a) Certain financial assets and liabilities that are measured at fair value (refer- Accounting policy regarding
financials instruments).
b) Defined benefit plans -present value of defined benefit obligation unless otherwise indicated.
The Company''s accounting policies and disclosures require the measurement of fair values for, both financial assets
and liabilities.
The Company has an established control framework with respect to the measurement of fair values. The
management regularly reviews significant unobservable inputs and valuation adjustments. If third party information
is used to measure fair values, then the management assesses the evidence obtained from the third parties to
support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value
hierarchy in which such valuations should be classified.
When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as
far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.
⢠Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
⢠Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
Further information about the assumptions made in measuring fair values is included in the Note 43.
2.3) FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Indian Rupees, the functional currency of the Company. All amounts
have been rounded-off to the nearest lakhs, unless otherwise indicated. Items included in the financial statements of
the Company are recorded using the currency of the primary economic environment in which the Company operates
(the ''functional currency'').
2.4) REVENUE RECOGNITION
The Company derives revenues primarily from sale of manufactured goods.
Effective April 1, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for
determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and
Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the retrospective effect method. The
adoption of the new standard did not have a material impact on the Company.
Sale of Goods
Revenue from sale of products is recognised when control of the products has transferred, being when the products
are delivered to the customer. Delivery occurs when the products have been shipped or delivered to the specific
location as the case may be, the risks of loss has been transferred, and either the customer has accepted the products
in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have
been satisfied. Sale of products includes related ancillary services, if any.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of
the transaction prices for the time value of money.
Sale of Services
Revenue from services is recognized by measuring progress towards satisfaction of performance obligation for the
services rendered.
Other operating revenue - Export incentives
The benefits, on account of entitlement to import duty free raw material under the Advance License Scheme in
respect of goods already exported, are not valued and brought into the books in the year of export. The raw materials
are recorded at cost at which they are procured in the year of import.
The benefits under FMS/FPS/Incremental Export Incentivisation Scheme and Duty Drawback Scheme are recognized
when the exports are made.
2.5) EMPLOYEE BENEFITS
a) Short term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short-term
employee benefits. Short-term employee benefits are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Short-term benefits such as salaries, wages, bonus, ex gratia, short-term compensation absences, etc., are
determined on an undiscounted basis and recognized in the period in which the employee renders the related
service.
b) Post-Employment Benefits
Defined Contribution Plans
Obligations for contributions to defined contribution plans such as Provident Fund maintained with Regional
Provident Fund Office and Employees State Insurance Corporation (''ESIC'') are expensed as the related service
is provided.
Defined Benefit Plans
The following post - employment benefit plans are covered under the defined benefit plans:
⢠Gratuity Fund
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The
Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective employee''s salary and the tenure of
employment with the Company. The calculation of defined benefit obligations is performed annually by a
qualified actuary using the projected unit credit method.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognized in the period in which they occur, directly in other comprehensive income.
c) Other Long-Term Employee Benefits
Compensated Absences
The Company does not have any leave encashment policy. Further any unutilized leave at the end of the year is
lapsed and not eligible for carry forward.
2.6) FOREIGN CURRENCY TRANSACTIONS AND TRANSCLATION
Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the
reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit
and Loss except to the extent of exchange differences which are regarded as an adjustment to finance costs on
foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are
capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the
exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on
the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in
OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
2.7) ACCOUNTING FOR TAXES ON INCOME
Income tax expense for the period comprises of current tax and deferred tax. It is recognised in the Statement of
Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in
equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year using applicable tax rates at the Balance
Sheet date, and any adjustment to taxes in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the
probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting
date and recognised to the extent that it has become probable that future taxable profits will be available against
which they can be used.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets
and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the
same taxation authority.
MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off
against regular tax payable within the stipulated statutory period.
2.8) PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost comprises of purchase price and any attributable cost such as duties, freight,
borrowing costs, erection and commissioning expenses incurred in bringing the asset to its working condition for its
intended use. If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted and depreciated for as separate items (major components) of property, plant and equipment.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when 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. All other repairs and maintenance are charged to the Statement of profit and loss
during the period in which they are incurred.
Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of
profit and loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as
"Capital work-in-progress".
2.9) INTANGIBLE ASSETS
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less
accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs,
and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on
foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible
assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be
measured reliably.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when
the asset is derecognised.
2.10) INVESTMENT PROPERTIES
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Investment property is measured at its cost, including related
transaction costs and where applicable borrowing costs less depreciation and impairment if any.
2.11) DEPRECIATION
Depreciation on Property, Plant & Equipment is provided on straight line method at the rates and in the manner
specified in Schedule II to the Companies Act, 2013. In the case of revalued assets, depreciation is calculated on
straight line method on the revalued amounts as determined by the valuer.
Depreciation on Property, Plant & Equipment added/disposed-off/discarded during the period has been provided on
the pro-rata basis with reference to the date of addition/disposal/discarding.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each
financial year end and adjusted prospectively, if appropriate.
2.12) AMORTIZATION
Intangible assets (Application Software) acquired by the Company are amortised on a straight line basis over its
useful life i.e. three years, as decided by the management.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted
prospectively, if appropriate.
2.13) BORROWING COSTS
Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its intended use.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
2.14) LEASES
As a Lessee
The Company assesses whether a contract is, or contains a lease, at inception of the contract. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset,
the Company assesses whether: i) the contract involves the use of an identified asset ii) the Company has substantially
all of the economic benefits from use of the asset through the period of the lease and iii) the Company has the right to
direct the use of the asset.
At the commencement date of the lease, the Company recognises a right-of-use asset and a corresponding lease
liability for all lease arrangements in which it is lessee, except for short-term leases (leases with a term of twelve
months or less), leases of low value assets and, for contract where the lessee and lessor has right to terminate a lease
without permission from the other party with no more than an insignificant penalty. The lease expense of such short¬
term leases, low value assets leases and cancellable leases, are recognised as an operating expense on a straight-line
basis over the term of the lease.
At commencement date, lease liability is measured at the present value of the lease payments to be paid during non¬
cancellable period of the contract, discounted using the incremental borrowing rate. The right-of-use assets is initially
recognised at the amount of the initial measurement of the corresponding lease liability, lease payments made at or
before commencement date less any lease incentives received and any initial direct costs.
Subsequently the right-of-use asset is measured at cost less accumulated depreciation and any impairment losses.
Lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using effective interest rate method) and reducing the carrying amount to reflect the lease payments made. The right-
of-use asset and lease liability are also adjusted to reflect any lease modifications or revised in-substance fixed lease
payments.
As a lessor:
Leases for which the Company is a lessor is classified as finance or operating leases. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.
Income from operating leases where the Company is a lessor is recognised as income on a straight-line basis over the
lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the
expected inflationary cost increases. The respective leased assets are included in the Standalone Balance Sheet based
on their nature. Leases of property, plant and equipment where the Company as a lessor has substantially transferred
all the risks and rewards are classified as finance lease. Finance leases are capitalised at the inception of the lease at the
fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rent
receivables, net of interest income, are included in other financial assets. Each lease receipt is allocated between the
asset and interest income. The interest income is recognised in the Standalone Statement of Profit and Loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the asset for each period.
Mar 31, 2015
1. SYSTEM OF ACCOUNTING
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis.
2. USE OF ESTIMATES
The preparation of financial statements requires judgements, estimates
and assumptions to be made that affect the reported amount of assets
and liabilities, disclosure of contingent liabilities on the date of
the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual
reserves and estimates are recognised in the period in which the
results are known/materialised.
3. FIXED ASSETS:
Fixed assets are stated at cost of acquisition or construction
inclusive of freight, duties and taxes and incidental expenses, less
accumulated depreciation, amortisation and impairment loss, if any.
4. INVESTMENT:
Investments are classified into Non Current and Current investments.
a) Non Current investments are being valued at cost of acquisition.
Provision is made to recognise a decline other than temporary, in the
carrying amount of long term investments.
b) Current investments are being valued at cost or market value
whichever is lower.
5. DEPRECIATION:
a) Premium on leasehold land is amortised over the period of the lease
term.
b) Depreciation on fixed assets is provided under the "straight line
method" based on the useful lives of assets as prescribed under Part C
of Schedule II to the Act.
c) Depreciation in respect of addition to fixed assets is provided on
pro-rata basis from the month in that such assets are
acquired/installed/started commercial production put to use.
d) Depreciation on fixed assets sold, discarded or demolished during
the year is being provided at their respective rates up to the month in
which such assets are sold, discarded or demolished.
6. VALUATION OF INVENTORIES:
a) Valuation of inventories is inclusive of taxes or duties incurred
and on FIFO basis except otherwise stated.
b) Raw materials and Work in progress are being valued at cost or net
realisable value whichever is lower.
c) Stores, Spares and Tools are being valued at weighted average cost.
d) Goods in Transit, if any, are stated at actual cost up to the date
of the Balance Sheet.
e) Finished Stocks are being valued at direct cost or net realisable
values whichever is lower.
7. REVENUE RECOGNISATION:
a) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is on the dispatch of goods.
b) Sales are stated net of discount, claims, and shortage. Commission,
brokerage and incentives on sales, wherever applicable, have been
separately recognized as an expense.
c) Incomes from job charges are recognized as and when the services are
rendered.
d) Interest income is accounted on accrual basis.
8. RETIREMENT AND OTHER BENEFITS TO EMPLOYEES:
a) Employees' benefit under defined contribution plan such as
contribution to provident fund and employees' benefits under defined
benefit plan for leave encashment are charged off at the undiscounted
amount in the year in which the related service provided.
b) Post employment benefits under defined benefit plan such as gratuity
are charged off in the year in which the employee has rendered services
at the present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gain and/or losses in respect of post
employment benefits are charged to profit and loss account or
capitalised in case of new projects are taken up by the company.
9. CAPITAL WORK IN PROGRESS:
The cost incurred for fixed assets, the construction of which is not
completed, are included under "capital work-in-progress" and the same
are classified and added to the respective assets on the completion.
10. PRIOR PERIOD EXPENSES / INCOME:
The company follows the practice of making adjustments, as a result of
errors and omissions, through "prior period items" in respect of all
material transaction pertaining to the period prior to current
financial year.
11. INCOME FROM INVESTMENTS:
Income from investments, where appropriate, is taken into revenue in
full on declaration or receipt and tax deducted at source thereon is
treated as advance tax.
12. TREATMENT OF CONTINGENT LIABILITIES:
Contingent liabilities are not recognised but are disclosed by way of
notes to accounts. Disputed demands in respect of central excise,
customs, income tax and other proceedings etc. are disclosed as
contingent liabilities. Payments in respect of such demands, if any,
are shown as advances till the final disposal of the matter.
13. EXCISE DUTY & CENVAT CREDIT
CENVAT credit available as per the provisions of the Excise Rules on
raw material, packing material, etc purchased, is accounted for by
reducing the cost of the respective items.
Excise duty payable on finished goods lying at the factory premises at
the close of the year is provided in the books as per the Excise Rules.
CENVAT credit available as per the provisions of the Excise Rules on
capital goods is accounted for by reducing the cost of capital goods.
14. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one year and are capable of
reversal in one or more subsequent years.
15. IMPAIRMENT LOSS
Impairment loss is provided to the extent the carrying amount(s) of
assets exceed their recoverable amounts(s). Recoverable amount is the
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flow expected to
arise from the continuing use of the asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
sale of the asset in an arm length transaction between knowledgeable,
willing parties, less the cost of disposal.
16. SEGMENT REPORTING
Segments have been identified in line with the Accounting Standard-17,
taking into account the organisational structure as well as the
differing risks and returns. The business segment is disclosed as
primary segment.
17. BORROWING COSTS
The company capitalises interest and other costs incurred by it in
connection with funds borrowed for the acquisition of fixed assets.
Where specific borrowings are identified to a fixed asset or a new
unit, the company uses the interest rates applicable to that specific
borrowing as the capitalisation rate.
Capitalisation of borrowing costs ceases when all the activities
necessary to prepare the fixed assets for their intended use are
substantially complete. Other borrowing costs are charged to Profit &
Loss Account.
18. TRANSACTION IN FOREIGN CURRENCIES
a) Transactions denominated in foreign currencies are recorded by
applying the exchange rates prevailing at the date of the transactions.
b) Monetary items denominated in foreign currencies remaining unsettled
at the end of the year, are restated using the closing rates. The
exchange difference arising as a result of the above is recognised in
the profit and loss account.
c) In case the monetary items are covered by the forward exchange
contracts, the difference between the year end exchange rate and the
exchange rate at the date of the inception of the forward exchange
contract is recognised as exchange difference.
d) In respect of hedging transactions, the premium/discount represented
by difference between the exchange rate at the date of the inception of
the forward exchange contract and forward rate specified in the
contract is amortised as expense or income over the life of the
contract.
e) Exchange differences on such contracts are recognised in the
statement of profit and loss account in the year in which the exchange
rate changes.
f) Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for the year.
g) Non-monetary foreign currency items such as investments are carried
at cost.
Mar 31, 2014
1. SYSTEM OFACCOUNTING
a) These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. Pursuant to circular 15/2013 dated
13.09.2013 read with circular 08/2014 dated 04.04.2014, till the
Standards of Accounting or any addendum thereto are prescribed by
Central government in consultation and recommendation of the National
Financial Reporting Authority, the existing Accounting Standards
notified under the Companies Act,1956 shall continue to apply.
Consequently, these financial statements have been prepared to comply
in all material aspects with the Accounting Standards notified under
Section 211(3C) (Companies (Accounting Standards) Rules, 2006 as
amended and other relevant provisions of the Companies Act, 1956.
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 Revised Schedule Vi to the Companies Act, 1956.
Based on the nature of products and the time between acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current/non-current classification of assets
and liabilities.
2. FIXEDASSETS:
Fixed assets are stated at cost of acquisition or construction
inclusive of freight, duties and taxes and incidental expenses, less
accumulated depreciation (except land), amortisation and impairment
loss, if any.
3. INVESTMENT:
Investments are classified into Non Current and Current investments.
a) Non Current investments are being valued at cost of acquisition.
Provision is made to recognise a decline other than temporary, in the
carrying amount of long term investments.
b) Current investments are being valued at cost or market value
whichever is lower.
4. DEPRECIATION:
a) No depreciation is provided for leasehold land and freehold land.
b) Depreciation on fixed assets is being provided on "straight line
method" basis at the rates and manner specified in Schedule XIV to the
CompaniesAct, 1956, till the WDV is reduced to 5% of the gross value.
No further depreciation is provided on such balance amount of 5%.
c) Depreciation in respect of addition to fixed assets is provided on
pro-rata basis from the month in that such assets are
acquired/installed/started commercial production.
d) Depreciation on fixed assets sold, discarded or demolished during
the year is being provided at their respective rates up to the month in
which such assets are sold, discarded or demolished.
5. VALUATION OF INVENTORIES:
a) Valuation of inventories is inclusive of taxes or duties incurred
and on FIFO basis except otherwise stated.
b) Raw materials and Work in progress are being valued at cost or net
realisable value whichever is lower.
c) Stores, Spares and Tools are being valued at weighted average cost.
d) Goods in Transit, if any, are stated at actual cost up to the date
of the Balance Sheet.
e) Finished Stocks are being valued at direct cost or net realisable
values whichever is lower.
6. REVENUE RECOGNISATION:
a) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is on the dispatch of goods.
b) Sales are stated net of discount, claims, and shortage. Commission,
brokerage and incentives on sales, wherever applicable, have been
separately recognized as an expense.
c) Incomes from job charges are recognized as and when the services are
rendered.
d) Interest income is accounted on accrual basis.
7. RETIREMENTAND OTHER BENEFITSTO EMPLOYEES:
(a) Employees'' benefit under defined contribution plan such as
contribution to provident fund and employees'' benefits under defined
benefit plan for leave encashment are charged off at the undiscounted
amount in the year in which the related service provided.
(b) Post employment benefits under defined benefit plan such as
gratuity are charged off in the year in which the employee has rendered
services at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and/or losses in respect
of post employment benefits are charged to profit and loss account or
capitalised in case of new projects are taken up by the company.
8. CAPITAL WORK IN PROGRESS:
The cost incurred for fixed assets, the construction of which is not
completed, are included under "capital work-in-progress" and the same
are classified and added to the respective assets on the completion.
9. PRIOR PERIOD EXPENSES/INCOME:
The company follows the practice of making adjustments, as a result of
errors and omissions, through "prior period items" in respect of all
material transaction pertaining to the period prior to current
financial year.
10. INCOME FROM INVESTMENTS:
Income from investments, where appropriate, is taken into revenue in
full on declaration or receipt and tax deducted at source thereon is
treated as advance tax.
11. TREATMENT OF CONTINGENT LIABILITIES:
Contingent liabilities are not recognised but are disclosed by way of
notes to accounts. Disputed demands in respect of central excise,
customs, income tax and other proceedings etc. are disclosed as
contingent liabilities. Payments in respect of such demands, if any,
are shown as advances till the final disposal of the matter.
12. EXCISE DUTY&CENVATCREDIT
a) CENVAT credit available as per the provisions of the Excise Rules on
raw material, packing material, etc purchased, is accounted for by
reducing the cost of the respective items.
b) Excise duty payable on finished goods lying at the factory premises
at the close of the year is provided in the books as perthe Excise
Rules.
c) CENVAT credit available as per the provisions of the Excise Rules on
capital goods is accounted for by reducing the cost of capital goods.
13. TAXESONINCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, on timing
differences, being the difference between taxable
incomes and accounting income that originate in one year and are
capable of reversal in one or more subsequent years.
14. IMPAIRMENTLOSS
Impairment loss is provided to the extent the carrying amount(s) of
assets exceed their recoverable amounts(s). Recoverable amount is the
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flow expected to
arise from the continuing use of the asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
sale of the asset in an arm length transaction between knowledgeable,
willing parties, less the cost of disposal.
15. SEGMENTREPORTING
Segments have been identified in line with the Accounting Standard-17,
taking into account the organisational structure as well as the
differing risks and returns. The business segment is disclosed as
primary segment.
16. BORROWING COSTS
The company capitalises interest and other costs incurred by it in
connection with funds borrowed for the acquisition of fixed assets.
Where specific borrowings are identified to a fixed asset or a new
unit, the company uses the interest rates applicable to that specific
borrowing as the capitalisation rate. Capitalisation of borrowing costs
ceases when all the activities necessary to prepare the fixed assets
for their intended use are substantially complete. Other borrowing
costs are charged to Statement of Profit & Loss.
17. TRANSACTION IN FOREIGN CURRENCIES
a) Transactions denominated in foreign currencies are recorded by
applying the exchange rates prevailing at the date of the transactions.
b) Monetary items denominated in foreign currencies remaining unsettled
at the end of the year, are restated using the closing rates. The
exchange difference arising as a result of the above is recognised in
the profit and loss account.
c) In case the monetary items are covered by the forward exchange
contracts, the difference between the year end exchange rate and the
exchange rate at the date of the inception of the forward exchange
contract is recognised as exchange difference.
d) In respect of hedging transactions, the premium/discount represented
by difference between the exchange rate at the date of the inception of
the forward exchange contract and forward rate specified in the
contract is amortised as expense or income over the life of the
contract.
Exchange differences on such contracts are recognised in the statement
of profit and loss account in the year in which the exchange rate
changes.
Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for the year.
e) Non-monetary foreign currency items such as investments are carried
at cost.
Mar 31, 2012
1. SYSTEM OF ACCOUNTING
a) The financial statements have been prepared under the historical
cost convention in accordance with generally accepted accounting
principles in India and the provisions of the Companies Act 1956
following the mercantile system of accounting and recognising income
and expenditure on accrual basis.
b) The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised in
the period in which the results are known or materialised.
c) 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 Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current/non-current classification of assets
and liabilities.
2. FIXED ASSETS:
Fixed assets are stated at cost of acquisition or construction
inclusive of freight, duties and taxes and incidental expenses, less
accumulated depreciation (except land), amortisation and impairment
loss, if any.
3. INVESTMENT:
a) Investments are classified into Non Current and Current investments.
b) Non Current investments are being valued at cost of acquisition.
Provision is made to recognise a decline other than temporary, in the
carrying amount of long term investments.
c) Current investments are being valued at cost or market value
whichever is lower.
4. DEPRECIATION:
a) No depreciation is provided for leasehold land and freehold land.
b) Depreciation on fixed assets is being provided on "straight line
method" basis at the rates and manner specified in Schedule XIV to the
Companies Act, 1956, till the WDV is reduced to 5% of the gross value.
No further depreciation is provided on such balance amount of 5%.
c) Depreciation in respect of addition to fixed assets is provided on
pro-rata basis from the month in that such assets are
acquired/installed/started commercial production.
d) Depreciation on fixed assets sold, discarded or demolished during
the year is being provided at their respective rates up to the month in
which such assets are sold, discarded or demolished.
5. VALUATION OF INVENTORIES:
a) Valuation of inventories is inclusive of taxes or duties incurred
and on FIFO basis except otherwise stated.
b) Raw materials and Work in progress are being valued at cost or net
realisable value whichever is lower.
c) Stores, Spares and Tools are being valued at weighted average cost.
d) Goods in Transit, if any, are stated at actual cost up to the date
of the Balance Sheet.
e) Finished Stocks are being valued at direct cost or net realisable
values whichever is lower.
6. REVENUE RECOGNISATION:
a) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is on the dispatch of goods.
b) Sales are stated net of discount, claims, and shortage. Commission,
brokerage and incentives on sales, wherever applicable, have been
separately recognized as an expense.
c) Incomes from job charges are recognized as and when the services are
rendered.
d) Interest income is accounted on accrual basis.
7. RETIREMENT AND OTHER BENEFITS TO EMPLOYEES:
(a) Employees' benefit under defined contribution plan such as
contribution to provident fund and employees' benefits under defined
benefit plan for leave encashment are charged off at the undiscounted
amount in the year in which the related service provided.
(b) Post employment benefits under defined benefit plan such as
gratuity are charged off in the year in which the employee has rendered
services at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and/or losses in respect
of post employment benefits are charged to profit and loss account or
capitalised in case of new projects are taken up by the company.
8. CAPITAL WORK IN PROGRESS:
The cost incurred for fixed assets, the construction of which is not
completed, are included under "capital work-in-progress" and the same
are classified and added to the respective assets on the completion.
9. PRIOR PERIOD EXPENSES / INCOME:
The company follows the practice of making adjustments, as a result of
errors and Commissions, through "prior period items" in respect of all
material transaction pertaining to the period prior to current
financial year.
10. INCOME FROM INVESTMENTS:
Income from investments, where appropriate, is taken into revenue in
full on declaration or receipt and tax deducted at source thereon is
treated as advance tax.
11. TREATMENT OF CONTINGENT LIABILITIES:
Contingent liabilities are not recognised but are disclosed by way of
notes to accounts. Disputed demands in respect of central excise,
customs, income tax and other proceedings etc. are disclosed as
contingent liabilities. Payments in respect of such demands, if any,
are shown as advances till the final disposal of the matter.
12. EXCISE DUTY & CENVAT CREDIT
a) CENVAT credit available as per the provisions of the Excise Rules on
raw material, packing material, etc purchased, is accounted for by
reducing the cost of the respective items.
b) Excise duty payable on finished goods lying at the factory premises
at the close of the year is provided in the books as per the Excise
Rules.
c) CENVAT credit available as per the provisions of the Excise Rules on
capital goods is accounted for by reducing the cost of capital goods.
13. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one year and are capable of
reversal in one or more subsequent years.
14. IMPAIRMENT LOSS
Impairment loss is provided to the extent the carrying amount(s) of
assets exceed their recoverable amounts(s). Recoverable amount is the
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flow expected to
arise from the continuing use of the asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
sale of the asset in an arm length transaction between knowledgeable,
willing parties, less the cost of disposal.
15. SEGMENT REPORTING
Segments have been identified in line with the Accounting Standard-17,
taking into account the organisational structure as well as the
differing risks and returns. The business segment is disclosed as
primary segment.
16. BORROWING COSTS
The company capitalises interest and other costs incurred by it in
connection with funds borrowed for the acquisition of fixed assets.
Where specific borrowings are identified to a fixed asset or a new
unit, the company uses the interest rates applicable to that specific
borrowing as the capitalisation rate. Capitalisation of borrowing costs
ceases when all the activities necessary to prepare the fixed assets
for their intended use are substantially complete. Other borrowing
costs are charged to Profit & Loss Account.
17. TRANSACTION IN FOREIGN CURRENCIES
a) Transactions denominated in foreign currencies are recorded by
applying the exchange rates prevailing at the date of the transactions.
b) Monetary items denominated in foreign currencies remaining unsettled
at the end of the year, are restated using the closing rates. The
exchange difference arising as a result of the above is recognised in
the profit and loss account.
c) In case the monetary items are covered by the forward exchange
contracts, the difference between the year end exchange rate and the
exchange rate at the date of the inception of the forward exchange
contract is recognised as exchange difference.
d) In respect of hedging transactions, the premium/discount represented
by difference between the exchange rate at the date of the inception of
the forward exchange contract and forward rate specified in the
contract is amortised as expense or income over the life of the
contract.
Exchange differences on such contracts are recognised in the statement
of profit and loss account in the year in which the exchange rate
changes.
Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for the year.
e) Non-monetary foreign currency items such as investments are carried
at cost.
Mar 31, 2011
1. SYSTEM OF ACCOUNTING
a) The financial statements have been prepared under the historical
cost convention in accordance with generally accepted accounting
principles in India and the provisions of the Companies Act 1956
following the mercantile system of accounting and recognising income
and expenditure on accrual basis.
b) The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised in
the period in which the results are known or materialised.
2. FIXED ASSETS:
Fixed assets are stated at cost of acquisition or construction
inclusive of freight, duties and taxes and incidental expenses, less
accumulated depreciation (except land), amortisation and impairment
loss, if any.
3. INVESTMENT:
a) Long term investments are being valued at cost of acquisition.
Provision is made to recognize a decline, other than temporary, in the
carrying amount of long term investments.
b) Short-term investments are being valued at cost or market value
whichever is lower.
4. DEPRECIATION:
a) No depreciation is provided for leasehold land and freehold land.
b) Depreciation on fixed assets is being provided on "straight line
method" basis at the rates and manner specified in Schedule XIV to the
Companies Act, 1956, till the WDVis reduced to 5% of the gross value.
No further depreciation is provided on such balance amount of 5%.
c) Depreciation in respect of addition to fixed assets is provided on
pro-rata basis from the month in that such assets are
acquired/installed/started commercial production.
d) Depreciation on fixed assets sold, discarded or demolished during
the year is being provided at their respective rates up to the month in
which such assets are sold, discarded or demolished.
5. VALUATION OF INVENTORIES:
a) Valuation of inventories is inclusive of taxes or duties incurred
and on FIFO basis except otherwise stated.
b) Raw materials and Work in progress are being valued at cost or net
realisable value whichever is lower.
c) Stores, Spares and Tools are being valued at weighted average cost.
d) Goods in Transit, if any, are stated at actual cost up to the date
of the Balance Sheet.
e) Finished Stocks are being valued at direct cost or net realisable
values whichever is lower.
6. REVENUE RECOGNISATION:
a) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is on the dispatch of goods.
b) Sales are stated net of discount, claims, and shortage. Commission,
brokerage and incentives on sales, wherever applicable, have been
separately recognized as an expense.
c) Incomes from job charges are recognized as and when the services are
rendered.
d) Interest income is accounted on accrual basis.
7. RETIREMENT AND OTHER BENEFITS TO EMPLOYEES:
(a) Employees' benefit under defined contribution plan such as
contribution to provident fund and employees' benefits under defined
benefit plan for leave encashment are charged off at the undiscounted
amount in the year in which the related service provided.
(b) Post employment benefits under defined benefit plan such as
gratuity are charged off in the year in which the employee has rendered
services at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and/or losses in respect
of post employment benefits are charged to profit and loss account or
capitalised in case of new projects are taken up by the company.
8. CAPITAL WORK IN PROGRESS :
The cost incurred for fixed assets, the construction of which is not
completed, are included under "capital work-in-progress" and the same
are classified and added to the respective assets on the completion.
9. PRIOR PERIOD EXPENSES/INCOME:
The company follows the practice of making adjustments, as a result of
errors and omissions, through "prior period items" in respect of all
material transaction pertaining to the period prior to current
financial year.
10. INCOME FROM INVESTMENTS :
Income from investments, where appropriate, is taken into revenue in
full on declaration or receipt and tax deducted at source thereon is
treated as advance tax.
11. TREATMENT OF CONTINGENT LIABILITIES:
Contingent liabilities are not recognised but are disclosed by way of
notes to accounts. Disputed demands in respect of central excise,
customs, income tax and other proceedings etc. are disclosed as
contingent liabilities. Payments in respect of such demands, if any,
are shown as advances till the final disposal of the matter.
12. EXCISE DUTY &CENVAT CREDIT
a) CENVAT credit available as per the provisions of the Excise Rules on
raw material, packing material, etc purchased, is accounted for by
reducing the cost of the respective items.
b) Excise duty payable on finished goods lying at the factory premises
at the close of the year is provided in the books as per the Excise
Rules.
c) CENVAT credit available as per the provisions of the Excise Rules on
capital goods is accounted for by reducing the cost of capital goods.
13. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one year and are capable of
reversal in one or more subsequent years.
14. IMPAIRMENT LOSS
Impairment loss is provided to the extent the carrying amount(s) of
assets exceed their recoverable amounts(s). Recoverable amount is the
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flow expected to
arise from the continuing use of the asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
sale of the asset in an arm length transaction between knowledgeable,
willing parties, less the cost of disposal.
15. SEGMENT REPORTING
Segments have been identified in line with the Accounting Standard-17,
taking into account the organisational structure as well as the
differing risks and returns. The business segment is disclosed as
primary segment.
16. BORROWING COSTS
The company capitalises interest and other costs incurred by it in
connection with funds borrowed for the acquisition of fixed assets.
Where specific borrowings are identified to a fixed asset or a new
unit, the company uses the interest rates applicable to that specific
borrowing as the capitalisation rate. Capitalisation of borrowing
costs ceases when all the activities necessary to prepare the fixed
assets for their intended use are substantially complete. Other
borrowing costs are charged to Profit & Loss Account.
17. TRANSACTION IN FOREIGN CURRENCIES
a) Transactions denominated in foreign currencies are recorded by
applying the exchange rates prevailing at the date of the transactions.
b) Monetary items denominated in foreign currencies remaining unsettled
at the end of the year, are restated using the closing rates. The
exchange difference arising as a result of the above is recognised in
the profit and loss account.
c) In case the monetary items are covered by the forward exchange
contracts, the difference between the year end exchange rate and the
exchange rate at the date of the inception of the forward exchange
contract is recognised as exchange difference.
d) In respect of hedging transactions, the premium/discount represented
by difference between the exchange rate at the date of the inception of
the forward exchange contract and forward rate specified in the
contract is amortised as expense or income over the life of the
contract.
Exchange differences on such contracts are recognised in the statement
of profit and loss account in the year in which the exchange rate
changes.
Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for the year.
e) Non-monetary foreign currency items such as investments are carried
at cost.
Mar 31, 2010
1. SYSTEM OF ACCOUNTING
a) The financial statements have been prepared under the historical
cost convention in accordance with generally accepted accounting
principles in India and the provisions of the Companies Act 1956
following the mercantile system of accounting and recognising income
and expenditure on accrual basis.
b) The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised in
the period in which the results are known or materialised.
2. FIXED ASSETS:
Fixed assets are stated at cost of acquisition or construction
inclusive of freight, duties and taxes and incidental expenses, less
accumulated depreciation (except land), amortisation and impairment
loss, if any.
3. INVESTMENT:
a) Long term investments are being valued at cost of acquisition.
Provision is made to recognize a decline, other than temporary, in the
carrying amount of long term investments.
b) Short-term investments are being valued at cost or market value
whichever is lower.
4. DEPRECIATION:
a) No depreciation is provided for leasehold land and freehold land.
b) Depreciation on fixed assets is being provided on "straight line
method" basis at the rates and manner specified in Schedule XIV to the
Companies Act, 1956, till the WDV is reduced to 5% of the gross value.
No further depreciation is provided on such balance amount of 5%.
c) Depreciation in respect of addition to fixed assets is provided on
pro-rata basis from the month in that such assets are
acquired/installed/started commercial production.
d) Depreciation on fixed assets sold, discarded or demolished during
the year is being provided at their respective rates up to the month in
which such assets are sold, discarded or demolished.
e) The provision for depreciation for multiple shifts, wherever
applicable, as per records, and as advised, has been made on the basis
of the actual utilisation of respective eligible assets.
5. VALUATION OF INVENTORIES:
a) Valuation of inventories is inclusive of taxes or duties incurred
and on FIFO basis except otherwise stated.
b) Raw materials and Work in progress are being valued at cost or net
realisable value whichever is lower.
c) Stores, Spares and Tools are being valued at weighted average cost.
d) Goods in Transit, if any, are stated at actual cost up to the date
of the Balance Sheet.
e) Finished Stocks are being valued at direct cost or net realisable
values whichever is lower.
6. REVENUE RECOGNISATION:
a) Sale of Goods is recognized on transfer of significant risks and
rewards of ownership which is on the dispatch of goods.
b) Incomes from job charges are recognized as and when the services are
rendered.
c) Interest income is accounted on accrual basis.
d) Sales are stated net of discount, claims, and shortage. Commission,
brokerage and incentives on sales, wherever applicable, have been
separately recognized as an expense.
7. RETRIEMENT AND OTHER BENEFITS TO EMPLOYEES:
(a) Employees benefit under defined contribution plan such as
contribution to provident fund and employees benefits under defined
benefit plan for leave encashment are charged off at the undiscounted
amount in the year in which the related service provided.
(b) Post employment benefits under defined benefit plan such as
gratuity are charged off in the year in which the employee has rendered
services at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and/or losses in respect
of post employment benefits are charged to profit and loss account or
capitalised in case of new projects are taken up by the company.
8. MISCELLANEOUS EXPENDITURE:
Miscellaneous expenditures having future economic benefits are
amortised over their useful life.
9. CAPITAL WORK IN PROGRESS:
The cost incurred for fixed assets, the construction of which is not
completed, are included under "capital work-in-progress" and the same
are classified and added to the respective assets on the completion.
10. PRIOR PERIOD EXPENSES/INCOME:
The company follows the practice of making adjustments, as a result of
errors and omissions, through "prior period items" in respect of all
material transaction pertaining to the period prior to current
financial year.
11. INCOME FROM INVESTMENTS:
Income fron investments, where appropriate, is taken into revenue in
full on declaration or receipt and tax deducted at source thereon is
treated as advance tax.
12. TREATMENT OF CONTINGENT LIABILITIES:
Contingent liabilities are not recognised but are disclosed by way of
notes to accounts. Disputed demands in respect of central excise,
customs, income tax and other proceedings etc. are disclosed as
contingent liabilities. Payments in respect of such demands, if any,
are shown as advances till the final disposal of the matter.
13. EXCISE DUTY &CENVAT CREDIT
a) CENVAT credit available as perÃthe provisions of the Excise Rules on
raw material, packing material, etc purchased, is accounted for by
reducing the cost of the respective items.
b) Excise duty payable on finished goods lying at the factory premises
at the close of the year is provided in the books as per the Excise
Rules.
c) CENVAT credit available as per the provisions of the Excise Rules on
capital goods is accounted for by reducing the cost of capital goods.
14. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one year and are capable of
reversal in one or more subsequent years.
15. IMPAIRMENT LOSS
Impairment loss is provided to the extent the carrying amount(s) of
assets exceed their recoverable amounts(s). Recoverable amount is the
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flow expected to
arise from the continuing use of the asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
sale of the asset in an arm length transaction between knowledgeable,
willing parties, less the cost of disposal.
16 SEGMENT REPORTING
Segments have been identified in line with the Accounting Standard-17,
taking into account the organisational structure as well as the
differing risks and returns. The business segment is disclosed as
primary segment.
17 BORROWING COSTS
The company capitalises interest and other costs incurred by it in
connection with funds borrowed for the acquisition of fixed assets.
Where specific borrowings are identified to a fixed asset or a new
unit, the company uses the interest rates applicable to that specific
borrowing as the capitalisation rate. Capitalisation of borrowing
costs ceases when all the activities necessary to prepare the fixed
assets for their intended use are substantially complete. Other
borrowing costs are charged to Profit & Loss Account.
18 TRANSACTION IN FOREIGN CURRENCIES
a) Transactions denominated in foreign currencies are recorded by
applying the exchange rates prevailing at the date of the transactions.
b) Monetary items denominated in foreign currencies remaining unsettled
at the end of the year, are restated using the closing rates. The
exchange difference arising as a result of the above is recognised in
the profit and loss account.
c) In case the monetary items are covered by the forward exchange
contracts, the difference between the year end exchange rate and the
exchange rate at the date of the inception of the forward exchange
contract is recognised as exchange difference.
d) In respect of hedging transactions, the premium/discount represented
by difference between the exchange rate at the date of the inception of
the forward exchange contract and forward rate specified in the
contract is amortised as expense or income over the life of the
contract.
Exchange differences on such contracts are recognised in the statement
of profit and loss account in the year in which the exchange rate
changes.
Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognised as income or as expense for the year.
e) Non-monetary foreign currency items such as investments are carried
at cost.
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Tuni Textile Mills Ltd. Tools
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Tuni Textile Mills Ltd. Company Details
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Company History
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Tuni Textile Mills Ltd. Key Financial Ratios
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Tuni Textile Mills Ltd. Results
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Tuni Textile Mills Ltd. Financial Data
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Tuni Textile Mills Ltd. Reports
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Tuni Textile Mills Ltd. Corporate Announcements
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