NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED ON 31" MARCH, 2015 1. SIGNIFICANT ACCOUNTING POLICIES: A. GENERAL Financial statements have been brpared under 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. B. USE OF ESTIMATE The brparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized. C. FIXED ASSETS (a) Fixed Assets are stated at cost net of recoverable taxes and includes amounts added revaluation, less accumulated debrciation and impairment loss, if any. All costs, including trial run production and financing cost till commencement of commercial production are capitalized net of cenvat. (b) Capital Work in Progress: Capital work in progress includes cost of assets at sites, Construction expenditure, advances made for acquisition of capital assets and interest on the funds deployed. D. DEbrCIATION i) Debrciation on the fixed assets has been provided as per schedule II of CompaniesAct, 2013, and useful life of the assets have been assessed as per same schedule. ii) Debrciation on fixed assets addition/deletion during the year has been provided on pro-rata basis with reference to the day of addition/deletion. E. IMPAIRMENT OF ASSETS An assets is treated as impaired, when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, charged to profit and loss account, in the year in which an asset is identified as impaired. The impairment less recognized is prior accounting period is reversed if there has been a change in estimate of recoverable amount. F. INVESTMENT Long-term investments are stated at the cost of acquisition. Provision for diminution in the value of Long term Investment has been made during the year whenever there is decline other than temporary in the opinion of the Management. G. INVENTORIES In general, all inventories of finished, work-in-progress etc. are stated at lower of cost or net realizable value. Cost of inventories comprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their brsent location and condition. Raw materials & Stores and Spares are stated at cost on FIFO basis. Waste and by product are valued at net realizable value. Inventory of finished goods and waste include excise duty, wherever applicable. H. TRANSACTIONS IN FOREIGN EXCHANGE Transactions denominated in foreign currency are normally recorded at the customs exchange rate brvailing at the time of transaction. Monetary Items denominated in foreign currencies at the year end are restated at year end rates. Revenue from sale of goods is recognized when significant risk and rewards of ownership of goods have passed to the buyer. I. SALES & PURCHASE Sales are recorded net of return, rate difference and sales claim. Purchases are recorded inclusive of all taxes excluding VAT net of return rate differences and purchase claim. J. BORROWING COST Borrowing cost that is attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessary takes substantial period of the time to get ready for intended use. All other cost is charged to revenue. K. EXPORT INCENTIVES. Benefit on account of entitlement of Duty Draw Back and others are recognized as and when right to receive is established as per the terms of the scheme. L. EMPLOYEES RETIREMENT BENEFIT Contribution to Provident fund and leave encashment benefits are charged to profit and loss account on actual basis. Gratuity and other retirement benefits have been recorded on cash basis. M. PROVISION FOR CURRENT AND DEFERRED TAX Provision for Taxation has been made in the accounts under Minimum Alternate Tax (MAT) as per provision of Section 115JB of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between books and taxable profit is accounted for using the tax rates and loss that have been enacted or substantially enacted as on the Balance Sheet date. The deferred tax Assets is recognized and carried forwarded only to the extent that there is a reasonable certainty that the assets will be realized in future. N. PROVISION, CONTINGENT LIABILITY AND CONTINGENT ASSETS. Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements. NOTES ON ACCOUNTS 1. No provision for gratuity has been made during the year as the Company has not gone for actuarial valuation as brscribed by AS 15 "Employee Benefits". It is accounted on as and when it is paid. Since the amount is unascertainable, the impact of the same on Profit and Loss statement cannot be stated. 2. During the year Company has revised the useful life of its fixed assets based on Schedule II of the Companies Act, 2013 for the purpose of providing debrciation on fixed assets. Accordingly, the carrying amount of the fixed assets as on 1st April 2014 has been debrciated over the remaining revised useful life of the fixed assets. Consequently, an amount of Rs. 99.12 Lac has been reduced from retained earnings. 3. Due to change the rates of the debrciation on fixed assets as per schedule II of the Companies Act, 2013 Debrciation amount of the current financial year is excess by Rs. 1.36 Lac, hence the profit of the company has reduced by the same amount during the year. 4. The Company is operating in single segment i.e. Textiles and thus there is no reportable segments as per Accounting Standard 17 "Segment Reporting". There is no reportable geographical segment either. 5. Contingent Liability/ Capital Commitments The Bankers of the Company have given Guarantees to various Government Authorities amounting to Rs.47.36 Lac (P. Y. Rs.58.49 Lac) for which the Company has given counter guarantee and margin money to the bankers amounting to Rs.12.25 Lac(P.Y. Rs.13.66 Lac). The Company has given a Counter Guarantee of Rs.5960.00 Lac (P.Y. Rs. 3190.00) to the bankers of its subsidiary; India Denim Limited against the subsidiary's sanctioned Term Loan and Working Capital Facilities. The Company does not expect any outflow of resources in respect of the above. The company has no capital and other commitments as on the Balance Sheet date. 6. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated in the Balance Sheet realizable in the ordinary course of business. Sundry Debtors, Creditors & Advances are subject to reconciliation with parties. 7. Income Tax Assessment of the company has been completed up to the Financial Year ended on 31st March, 2012. 8. Disclosure as per Micro, Small, and Medium Enterprises Development Act, 2006 The Company has not received information from the vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 hence disclosure required by notification dated 16th November, 2007 issued by Ministry of Company Affairs have not been given. 9. The Financial Statements have been brpared in the format brscribed by the Revised Schedule VI to the Companies Act, 1956. Previous year figures have been regrouped / rearranged wherever necessary to make them comparable with those of the Current Year. As per our reports of even date attached For BHUWANIA & AGRAWAL ASSOCIATES CHARTERED ACCOUNTANTS (Firm Registration No. 101483W) Niranjankumar Agrawal Partner Membership No. 34659 FOR AND BEHALF OF THE BOARD PRAKASHCHAND DALMIA Chairman & Managing Director AMITABH KEJRIWAL Whole Time Director MAHENDRA AGARWAL Director RAMNIWAS B SOMANY Chief Finance Officer Place: MUMBAI Dated: 30th May, 2015 |