Sri Ramakrishna Mills (Coimbatore)

AS-1 DISCLOSURE AND BASIS OF ACCOUNTING
 
 a) The Financial Statements have been prepared under the Historical
 cost convention in accordance with the provisions of the Companies
 Act, 2013 and accounting principles generally accepted in India and
 comply with the Accounting Standards as prescribed under 133 of the
 Companies Act, 2013 read with Rule 7 of the Companies (Accounts)
 Rules, 2014, provisions of Companies Act, 2013 to the extent notified.
 Accounting policies have been consistently applied except where a
 newly issued Accounting Standard is initially adopted or a revision to
 an existing Accounting Standard requires a change in the accounting
 policy hitherto in use.
 
 b) The Company has been consistently following the accrual basis of
 accounting in respect of its Income and Expenditure.
 
 c) The Accounts are prepared on the basis of Going Concern concept
 only.
 
 AS-2 VALUATION OF INVENTORIES
 
 Inventories are valued at lower of cost and net realizable value,
 where
 
 a) Cost of raw materials is determined on specific identification
 method
 
 b) Stock of stores, spares and packing materials is determined on
 weighted average method.
 
 c) Finished goods and work in progress is determined under FIFO method
 where cost includes conversion and other costs incurred in bringing
 the inventories to their present location and condition.
 
 AS- 3 CASH FLOW STATEMENT
 
 Cash flows are reported using the indirect method, where by the profit
 before tax is adjusted for the effect of transactions of a non cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and items of income or expense associated with
 investing or financing cash flows. Cash and Cash equivalent include
 cash on hand and balances with banks in current and deposit accounts
 with necessary disclosure of cash and cash equivalent balances that
 are not available for use by the company.
 
 AS-6 DEPRECIATION ACCOUNTING
 
 Depreciation on Fixed Assets has been provided on Straight line basis
 based on the balance useful life of the assets applicable to
 continuous process plant in respect of Plant and Machineries and on
 WDV in respect of other assets as prescribed in Schedule II of the
 Companies Act, 2013 effective from 01/04/2014. In respect of additions
 and sales, pro rata depreciation is calculated from the date of
 purchase or to the date of sale as the case may be.
 
 AS-9 REVENUE RECOGNITION
 
 a) Revenue from sale transactions is recognised as and when the
 property in the goods sold is transferred to the buyer for a definite
 consideration. Revenue from service transactions are recognised on the
 completion of the contract at the contracted rate and when there is no
 uncertainty regarding the amount of consideration or collectability.
 
 b) Direct Sales as reported are net of Sales Tax.
 
 c) Dividend income from investments and interest on NSC is accounted
 in the year in which it is actually received.
 
 d) Other incomes are accounted on accrual basis.
 
 AS-10 ACCOUNTING FOR FIXED ASSETS
 
 The cost of fixed assets except Land, Building and Plant and
 Machineries are shown at historical cost less accumulated
 depreciation. Land, Building and Plant and Machineries are shown at
 revalued figure less accumulated depreciation.
 
 AS-11 FOREIGN CURRENCY TRANSACTIONS
 
 Foreign currency transactions are recorded at the prevailing exchange
 rates at the time of initial recognition. Exchange differences arising
 on final settlement are recognized as income or expense in the profit
 and loss account. Outstanding balances of monetary items denominated
 in foreign currency are restated at closing exchange rates.
 
 The premium or discount arising at the inception of forward exchange
 contracts is accounted as income or expense over the life of the
 contract. Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognized as income or as expense in the
 period in which they arise.
 
 AS-13 ACCOUNTING FOR INVESTMENTS
 
 Long term investments are stated at cost. A provision for diminution,
 if any, is made to recognise a decline, other than temporary, in the
 value of long term investments. AS-15 EMPLOYEE BENEFITS
 
 a) Short term employee benefits (other than termination benefits)
 which are payable within 12 months after the end of the period in
 which the employees render service are accounted on accrual basis.
 
 b) Defined Contribution Plans
 
 Company''s contributions paid / payable during the year to Provident
 Fund, Superannuation Fund and ESIC are recognized in the profit and
 loss account.
 
 c) Defined Benefit Plans
 
 Company''s liabilities towards gratuity is determined using the
 projected unit credit method which considers each period of service as
 giving rise to an additional unit of benefit entitlement and measures
 each unit separately to build up the final obligation. Past services
 are recognized on a straight line basis over the average period until
 the amended benefits becomes vested. Actuarial gains or losses are
 recognized immediately in the statement of profit and loss as income
 or expense. Obligation is measured at the present value of estimated
 future cash flows using a discounted rate
 
 AS-16 BORROWING COSTS
 
 Borrowing Costs that are attributable to the acquisition of
 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 intended use. All other
 borrowing costs are recognized as an expense in the period in which
 they are incurred.
 
 AS-19 LEASES
 
 Leases, where the lessor effectively retains substantially all the
 risks and benefits of ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognized as an
 expense in the statement of profit and loss on a straight line basis
 over the lease term.
 
 AS-20 EARNING PER SHARE
 
 The earning considered in ascertaining the Company''s earnings per
 share comprises of Net Profit after tax.
 
 AS-22 ACCOUNTING FOR TAXES ON INCOME
 
 Deferred tax resulting from timing differences between book and tax
 profits is accounted under liability method at enacted or
 substantively enacted rate as on the balance sheet date. Deferred tax
 asset, other than those arising on account of unabsorbed depreciation
 or carried forward of losses under tax loss, are recognised and
 carried forward subject to consideration of prudence only to the
 extent that there is reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax asset
 can be realized.
 
 Deferred tax asset, arising on account of unabsorbed depreciation or
 carried forward of losses under tax loss, are recognised and carried
 forward subject to consideration of prudence only to the extent that
 there is virtual certainty that sufficient future taxable income will
 be available against which such deferred tax asset can be realised.
 
 Current tax is determined at the amount of tax payable in respect of
 estimated taxable income for the year.
 
 AS-26 INTANGIBLE ASSETS
 
 Software is being amortised over a period of 1-3 years depending on
 the licenses of the respective software.
 
 AS-28 IMPAIRMENT OF ASSETS
 
 An asset is impaired when the carrying amount of the asset exceeds its
 recoverable amount. An impairment loss is charged to the statement of
 Profit and Loss in the year in which an asset is identified as
 impaired. An impairment loss recognized in prior accounting year is
 reversed if there has been a change in the estimate of the recoverable
 amount.
 
 AS-29 PROVISIONS, CONTINGENT LIABILITY AND CONTINGENT ASSETS
 
 a) Provisions involving degree of estimation in measurement are
 recognized when there is a present obligation as a result of past
 event and it is probable that there will be an outflow of resources.
 
 b) Contingent liabilities in respect of show cause notice received are
 considered only when they are converted to demands. Contingent
 liabilities are disclosed by way of notes to accounts.
 
 c) Contingent liability under various fiscal laws includes those in
 respect of which the company/department is in appeal.
 
 USE OF ESTIMATES
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and the disclosures of contingent liabilities as at the
 date of the financial statements and reported amount of revenues and
 expenses during the reporting period. Actual results could differ from
 these estimates. Any revision to the estimates is recognized
 prospectively.