NOTE NO. 1: SIGNIFICANT ACCOUNTING POLICIES
A. CORPORATE INFORMATION:
Yajur Fibres Limited (the "Company") is a public limited company duly incorporated on the 7th day of August, 1980, under the provisions of the Companies Act, 1956. The registered office of the Company is situated at 5, Middleton Street, Kolkata, West Bengal, 700071. The Company is primarily engaged in the manufacturing of textile goods.
B. BASIS OF ACCOUNTING OF FINANCIAL STATEMENT:
The Financial statements have been prepared in accordance with historical Cost convention as going concern and on mercantile basis.
The Financial statements are presented in accordance with generally accepted accounting principles in India. All the assets & liabilities have been classified as current or non-current as per company’s normal operating cycle and other criteria set out in Schedule III to Companies Act, 2013. Based on the nature of the product and the time between acquisition of the assets for processing and their realization in cash and cash equivalent, the company has ascertained its operating cycle as 12 months for the purpose of current, non-current classification of assets and liabilities.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
D. PROPERTY. PLANT & EQUIPMENT:
Properties, Plant & Equipment including intangible assets of the Company have been stated at cost of acquisition, less accumulated depreciation. Cost includes all expenses incurred to bring the assets to its present location and condition. Capital Work in Progress comprises the cost to fixed assets that are not ready for the intended use at the reporting date.
The Company has adopted the cost model for all classes of Property, Plant, and Equipment, except in case of the factory Land and Building situated at Phuleswar, Howrah, where the revaluation model has been followed.
E. DEPRECIATION:
Depreciation is provided on Straight line method over the useful life of the assets in accordance with schedule - II of Companies Act, 2013 except for the plant and machinery. Depreciation @ 2.5% p.a. (on pro rata basis) is charged for Plant & Machinery under SLM method based upon evaluation carried by the technical valuer.
Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis to the statement of profit and loss till the date of acquisition/sale.
The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on intemal/extemal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
F. INVESTMENT:
Investment is treated as Non Current assets and stated at cost. Provision for Diminution in the value of long term investment is made only if such a decline is other than temporary nature in opinion of the management.
G. INVENTORIES:
Inventory of the Company have been valued at lower of Cost or Net Realisable Value and cost is determined on following basis :
i) Raw Material :At FIFO
ii) Work in Progress : At Estimated Cost
iii) Stores & Spares : At Weighted average Cost.
iv) Finished Goods : At FIFO
H. REVENUE RECOGNISITION:
i) Sale of Product
a) Sales are stated at net of sales returns and Discounts. Raw material consumed are shown net of Sale of Raw materials.
b) All Export Sales in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
ii) Interest Income
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
iii) Insurance Claim
The company recognizes insurance claims when the recoverability to the claim is established with a reasonable certainty which generally coincide as and when received.
I. GOVERNMENT GRANT:
i) Governments grants which are given on the basis of total Investments on Plant & Machinery, other assets and all conditions relating thereto are completed, the grant are deducted from gross value of assets.
ii) Grant/subsidy linked to the incurrence of revenue expenditure sanctioned by the government under notified scheme are recognized as income on disbursement by the Government.
J. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or construction of the qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended uses or sale. All other borrowing costs are charged to revenue in the year of incurrence.
K. EMPLOYEE BENEFITS:
i) Contributions to Provident Fund are accounted for on accrual basis.
ii) On or before March 31, 2024, the Company recognized gratuity liabilities on a cash basis, accounting for them only when payments were made to employees. However, effective from April 1, 2024, the Company has adopted a defined benefit plan for gratuity, under which liabilities are determined and recognized based on actuarial valuation using the Projected Unit Credit (PUC) method. (Refer Note 40)
L. FOREIGN CURRENCY TRANSACTIONS:
Functional and presentation currency
The financial statements are presented in Indian Rupee (INR), which is entity's functional and presentation currency.
Transactions and Balances
Foreign currency transactions are initially recorded in the functional currency using the exchange rates prevailing on the dates of the transactions.
At each reporting date, all monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates prevailing on that date. Exchange differences arising on the settlement or translation of such monetary items are generally recognized in the Statement of Profit and Loss.
However, in the case of long-term foreign currency monetary items, the exchange differences arising due to translation at rates different from those at which they were initially recorded, or reported in previous financial statements, are treated differently:
-If they relate to the acquisition of a depreciable capital asset, such differences can be added to or deducted from the cost of the asset and depreciated over its remaining useful life.
-In other cases, such differences can be accumulated in the “Foreign Currency Monetary Item Translation Difference Account" and amortized over the balance period of the related long-term asset or liability by recognizing the amount as income or expense in each of those periods.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS-29):
Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.
Contingent Liabilities is disclosed in Notes to the account for:-
i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or
ii) Present Obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the financial statement since this may result in the recognition of the income that may never be realized.
N. EARNINGS PER SHARE:
Basic earnings per share are computed using the weighted average number of equity shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of shares and dilutive equity equivalent shares outstanding during the period, except when results would be anti-dilutive.
O. TAXES ON INCOME:
Current tax is determined on the basis of the amount of tax payable on taxable income for the year. Deferred tax is calculated at current income tax rate and is recognized on timing differences between taxable income & accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. At each Balance Sheet date, the carrying amount of deferred tax is reviewed to reassure realization
GENERAL:
Except wherever stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.
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