NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (i) BASIC OF brPARATION OF FINANCIAL STATEMENTS (a) The financial statements have been brpared 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 (b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company. (ii) USE OF ESTIMATES The brsentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue 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. ' (iii) FIXED ASSETS Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less debrciation. (iv) DEbrCIATION AND AMORTISATION (a) Debrciation on fixed assets are provided on straight line method at the rates brscribed under Schedule XIV of the Companies Act, 2013, subject to writing off of 95% of the original cost. (b) Difference in Debrciation due to changes in the Companies Act, 2013 have been debited / credited to the Capital Reserves. (v) IMPAIRMENT Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. (vi) INVESTMENTS All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature. (vii) INVENTORIES (a) Inventories of fabric and garments are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and, where applicable, excise duty. (viii) SALES Sales comprises of sale of fabric, garments and flats less rebates, incentives and returns. (ix) RECOGNITION OF REVENUE (a) Sales : Sales of fabrics and garments are recognized as and when the goods are dispatched to the party. (b) Other Income: Other Income is recognized as and when it has become due. (x) RETIREMENT BENEFIT SCHEMES Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows: (a) Provident Fund is not applicable to the Company. (b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid. (c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid. (xi) TAXATION Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. (xii) METHOD OF ACCOUNTING The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated. (xiii) BORROWING COSTS Interest and other costs incurred for acquisition of qualifying assets, upto the date of commissioning / installation, are capitalized as part of the cost of the said asset. (xiv) FOREIGN CURRENCY TRANSLATION Liabilities / Assets in foreign currencies are reckoned in the accounts as per the following governing principles : (a) All foreign currency transactions, except (b) below mentioned, are recorded at the rate brvailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account. (b) All foreign currency Assets and Liabilities are restated at the exchange rate brvailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Debrciation on such variation is provided for the full year. (xv) PROVISIONS, CONTINGENT LIABILITIES 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. NOTE 2: OTHER NOTES: (1) CONTIGENT LIABILITIES (a) The Company has to make payment of Rs.1.2 Crores towards Income Tax Dues for the year ended 31-Mar-2014. (2) The Company has shown Sundry Debtors and Loans and Advances over six months as good as in the opinion of the management the same is recoverable and no provision is required to be made. (3) Retirement Benefit Scheme a) The Company has not provided for Leave Encashment which is unascertained and will be provided as and when it is paid by which the profit of the Company has been overstated to that extent. b) The Company has not provided for Gratuity which is unascertained and will be provided as and when it is paid by which the profit of the Company has been overstated to that extent. (4) The Company has not made any provisions for deferred tax asset as it is not certain that this amount will be realized in the near future. (5)As per the Accounting Standard (AS) 28 - Impairment of Assets, the Management carried out an internal impairment test as of 31s1 March 2014 and provided for the impairment loss where recoverable amount was lower than the amount carried in the accounts by providing for the same in the books of account. 5) SEGMENT REPORTING Since the Company is dealing in only one segment i.e. Textile and hence Segment reporting is not applicable. (6) Figures have been rounded off to the nearest rupee. (7) Previous years figures have been regrouped wherever necessary. (8) The statement of significant accounting policies and the notes form an integral part of the accounts for the period ended. (9) Previous period figures have been regrouped/reclassified wherever necessary. As per our report of even date For S. M. Kapoor & Co. Chartered Accountants Shekhar Gupta Partner For and on Behalf of the Board Director Director Director Place : Mumbai Date: 6th August, 2015 |