GRASIM - OVERVIEW

Incorporated on 25 August 1947, exactly 10 days after Indian independence Originally a textile manufacturer, they have successfully diversified into VSF(viscose staple fibre), cement and chemicals as well

It signifies power of fashion.

It has 65 exclusive company showrooms within the country, plans to take the figure to 100 by the end of this year.

They are eyeing a turnover of Rs 500 crores by the end of 2012 as against the turnover of Rs 250 crores in 2011.

Grasim Basic Accounting Policies

In accordance with

Generally Accepted Accounting Principles (GAAP) in India Accounting Standards (AS) by the Institute of Chartered Accountants of India Companies Act, 1956, Guidelines issued by Securities and Exchange Board of India.

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research.
*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Investments

Investments are classified as Current and Non-Current.

Current investments are stated at lower of cost and fair value determined for each category of investments. Long term investments are stated at cost after deducting provisions made for permanent diminution in value.

*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Inventories

Inventories, except scrap, are valued at the lower of cost and net realisable value. Waste/Scrap is valued at net realisable value.
Computed on weighted-average basis.

*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Depreciation

Fixed assets - On written-down-value method.

Revalued Fixed Assets - On straight line method. Fixed assets added/disposed off during the year - On pro-rata basis

*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Revenue Recognition

Accrual Basis

*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Contingencies/Provisions

A provision is recognised when there is a present obligation as a result of past event. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date. Contingent Liabilities are not recognised but are disclosed. Contingent Assets are neither recognised nor disclosed.

*Source: Annual report 2010-2011 and 2011-2012, Grasim Industries Limited

Figures in Crores Rs.

RAYMOND OVERVIEW

Incorporated in 1925 Manufactures worlds finest fabrics

Wool to wool-blended worsted suiting

Ring denims High value shirting

Respected fabric and apparel brands in the portfolio: Raymond, Raymond Premium Apparel, Park Avenue, ColorPlus, Parx, Makers and Notting Hill.

Targeting 20-25 per cent growth in its turnover in financial year 2012-2013
A turnover of Rs 1500 crores in the last fiscal year.

They have 543 stores in the country and 40 overseas stores.

Stock Performance:
The performance of the Companys shares in BSE Sensex:

Raymond Basic Accounting Policies

Revenues/Incomes and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred. Revenue expenditure, including overheads on Research and Development, is charged out as an expense through the natural heads of account in the year in which incurred. Expenditure which results in the creation of capital assets is taken as Fixed Assets and depreciation is provided on such assets as are depreciable.

*Source: Annual report 2010-2011 and 2011-2012, Raymond Limited

Investments

Investments are classified as Current and Non-Current.

Current investments are stated at lower of cost and fair value determined for each category of investments. Long term investments are stated at cost after deducting provisions made for permanent diminution in value.

*Source: Annual report 2010-2011 and 2011-2012, Raymond Limited

Inventories

First-in-First-out - Inventories of Raw Materials, Goods-inProcess, Stores and spares, Finished Goods and Merchanting Goods
Weighted Average cost Goods in Transit

*Source: Annual report 2010-2011 and 2011-2012, Raymond Limited

Depreciation

Straight Line Method (S.L.M.) - On Factory Buildings, Plant and Machinery, Electrical Installations and Equipment and Aircraft. Written Down Value Method (W.D.V.) - On other Fixed Assets at the rates specified in the Companies Act, 1956. Depreciation on additions to assets or on sale of assets, is calculated pro rata from the month of such addition or up to the month of such sale.

*Source: Annual report 2010-2011 and 2011-2012, Raymond Limited

Contingencies/Provisions

A provision is recognised when there is a present obligation as a result of a past event. Provision is not discounted to its present value and is determined based on the last estimate required to settle the obligation at the year end.

Contingent liabilities are not recognised but disclosed in the financial statements.
Contingent assets are neither recognised nor disclosed in the financial statements.

*Source: Annual report 2010-2011 and 2011-2012, Raymond Limited

Figures in Crores Rs.

INTERPRETATION

Not only a company follows same methods to compute its inventory, investments, depreciation and other elements of financial statements, an industry also follows almost same methods. Both the companies are following same methods in both the years.
Because these are the requirements of the government policies, and these help in depicting profits in a better way.