Accounting Policies of Sri Ganapathy Mills Company Ltd. Company

Mar 31, 2014

A) The Accounts of the Company have beer prepared under the Historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the company. The Company follows the Mercantile system of accounting and recognizes significant items of Income and Expenditure on accrual basis, except provident fund and employees state insurance contributions. Bonus, interest due from trading advances to sister concerns and interest due to NBFCs, which are accounted on payment basis.

b) A Sale is net of excise, charity, cess and sales tax collected from customers.

C) DEPRECIATION

Fixed Assets are stated at acquisition cost less accumulated depreciation.

The Company provides depreciation under the Straight line method at the rates and in the manner prescribed by Schedule XIV of The Companies Act, 1956 in respect of Assets acquired in Unit A after 31/03/93 and in respect of all assets acquired in Unit B.

However, in respect of assets acquired in unit A prior to 31/03/93, the Company provides depreciation under the Written Down Value method at the rates prescribed under the Income Tax Rules, 1962.

However the company has obtained opinion from the certified engineer relating to the residual useful life of the assets. Further during the year the critical power position in Tamil Nadu TNEB has reduced demand KVA by 40% and running only two shifts per day, resulting in lower utilization of the machineries. Taking the above in to the consideration, the depreciation has been provided on the plant and machinery at 605i of the prescribed rate under the companies Act. Depreciation at normal rate will be higher by Rs. 61.36 lacs

d) INVENTORIES

The Company values its stock of Raw materials and Stores at Cost and values its Finished Goods at Sales/realizable value. The Process Stock is valued at Average Cost

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Mar 31, 2012

A. The Accounts of the Company have been prepared under the Historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the company. The Company follows the Mercantile system of accounting and recognizes significant items of Income and Expenditure on accrual basis, except provident fund and employees state insurance contributions, Bonus, interest due from trading advances to sister concerns and interest due to NBFCs, which are accounted on payment basis.

b. A Sale is net of excise, charity, cess and sales tax collected from customers.

c. DEPRECIATION

Fixed Assets are stated at acquisition cost less accumulated depreciation.

The Company provides depreciation under the Straight line method at the rates and in the manner prescribed by Schedule XIV of The Companies Act, 1956 in respect of Assets acquired in Unit A after 31/03/93 and in respect of all assets acquired in Unit B. However, in respect of assets acquired in unit A prior to 31/03/93, the Company provides depreciation under the Written Down Value method at the rates prescribed under the Income Tax Rules, 1962.

However the company has obtained opinion from the certified engineer relating to the residual useful life of the assets. Further during the year the critical power position in Tamil Nadu TNEB has reduced demand KVA by 30% resulting in lower utilization of the machineries. Taking the above in to the consideration, the depreciation has been provided on the plant and machinery at 60% of the prescribed rate under the companies Act. Depreciation at normal rate will be higher by Rs. 49.27 lacs

d. INVENTORIES

The Company values its stock of Raw materials and Stores at Cost and values its Finished Goods at Sales/ realizable value. The Process Stock is valued at Average Cost

2. CONSIGNMENT SALES

The Company records sales to the extent of statements received from the consignees in respect of stock of finished goods despatched to the consignees.

3. FOREIGN CURRENCY TRANSACTION.

Liability in Foreign Currency has been shown at cost incurred at the time of the transaction. Any fluctuation in the liability arising out of the exchange rates will be accounted for at the time of repayment and hence no provision has been made for the difference.

4. RETIREMENT BENEFITS AS - 15

a. GRATUITY

In respect of Unit A, all the employees except few staffs have opted for Voluntary Retirement Scheme and hence in respect of the new employees there is no gratuity liability. In respect of staffs in the Unit A and employees of Unit B, gratuity is payable as and when the employee leaves and the same is accounted on cash basis. However the Company is taking necessary steps to obtain Actuarial valuation certificate in respect of anticipated future gratuity liability.

b. LEAVE ENCASHMENT.

The Company normally allows its employees to utilize the leave and no encashment leave has been demanded. In the event of leave entitlement being en-cashable in future it will be accounted on payment basis. However, as at the end of the year no employees have accumulated leave to encash.

c. PROVIDENT FUND

The Company deposits the Provident fund contribution under the Employees Provident Fund Scheme run by the Government.

5. BORROWING COSTS - AS - 16.

The Company is following AS-16 with regard to the treatment of borrowing costs. But there are no borrowing costs to be capitalized during the year.

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Mar 31, 2010

A. The Accounts of the Company have been prepared under the Historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the company. The Company follows the Mercantile system of accounting and recognizes significant items of Income and Expenditure on accrual basis, except provident fund and employees state insurance contributions, Bonus, interest due from trading advances to sister concerns and interest due to NBFCs, which are accounted on payment basis.

b. A Sale is net of excise, charity, cess and sales tax collected from customers.

c. DEPRECIATION

Fixed Assets are stated at acquisition cost less accumulated depreciation.

The Company provides depreciation under the Straight line method at the rates and in the manner prescribed by Schedule XIV of The Companies Act, 1956 in respect of Assets acquired in Unit A after 31/03/93 and in respect of all assets acquired in Unit B.

However, in respect of assets acquired in unit A prior to 31/03/93, the Company provides depreciation under the Written Down Value method at the rates prescribed under the Income Tax Rules, 1962.

However the company has obtained opinion from the certified engineer relating to the residual useful life of the assets. Further during the year the critical power position in Tamil Nadu TNEB has reduced demand KVA by 30% resulting in lower utilization of the machineries.

Taking the above in to the consideration, the depreciation has been provided on the plant and machinery at 70% of the prescribed rate under the companies Act. Depreciation at normal rate will be higher by Rs. 38.38 lacs

d. INVENTORIES

The Company values its stock of Raw materials and Stores at Cost and values its Finished Goods at Sales/ realizable value. The Process Stock is valued at Average Cost