NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2015

Notes Forming part of the Financial Statements

1. [A] GENERAL INFORMATION

FLORA TEXTILES LIMITED is a public limited company incorporate in India under the provisions of the Companies Act, 1956. The company is engaged in the business of Manufacturing of fabric.

1[B]. SIGNIFICANT ACCOUNTING POLICIES

(A) Accounting Conventions:

The company's financial statements have been brpared in accordance with the historical cost convention on accrual basis of accounting, as applicable to going concern in accordance with generally accepted accounting principle in India (Indian GAAP), mandatory accounting standards brscribed in the companies (Accounting Standards) Rules 2006 issued by Central Government in consultation with the provisions of companies act, 2013 to the extent applicable. The financial statements are brsented in Indian rupees.

All assets and liabilities have been classification as current or non current as per company's normal operating cycle and other criteria set out in the Schedule-III of Companeis Act, 2013. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or non current classification of Assets and liabilities.

(B) Use of Estimates

The brparation of financial statements requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Difference between the actual results and estimates are recognised in the year in which the results are known/materialised. Example of such estimates include provision for doubtful debts, employee benefits, provision for income tax, the useful lives of debrciable fixed assets and provision for impairment.

(C) Revenue Recognition

1. Sales are recognized at the time of delivery of goods from the factory,net of trade discount & sales tax.

2. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

(D) Fixed Assets:

Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidential expenses related to acquisition net of capital subsidy relating to specific fixed assets.

(E) Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net realisable value. The cost formula used for valuation of inventories are:-

1. Cost of stores & spares is calculated at weighted average of cost plus direct expenses.

2. Wastes are valued at net realisable value.

(F) Debrciation

i) Debrciation for the year has been provided on Straight Line Method on the basis of useful lives specified in the Schedule-II of Companies Act, 2013 as against the amount of debrciation calculated on the basis of rates of debrciation in respect of various assets contained in schedule XIV of the Companies Act, 1956.

ii) Assets costing Rs. 5000/- or less acquired during the year are debrciated at 100%.

(G) Accounting forTaxes on Income

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed debrciation or losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

The Company has not accounted for Deferred Tax in accordance with the Accounting Standard issued by the Institute of Chartered Accountants of India. The deferred tax asset on account of opening unabsorbed loss and unabsorbed debrciation has not been recognised as the Company is of the opinion that there is no virtual certainty of realisation of the same

(H) Employee Benefits

(i) Short - term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss statement of the year in which the related service is rendered.

(ii) Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the Profit and Loss statement.

(I) Provisions, Contingent Liabilities and Contingent Assets

The company does not have any contingent liabilities and contingent assets. So the company does not provide any provision for the same.

(J) Investments

Long term investments are carried "at cost" Less Provision, if any, for diminution in value, which is other than temporary.

(K) Segment Reporting

The Company is a single segment company engaged in manufacturing of fabric. Accordingly the disclosure requirement as brscribed in the Accounting Standard (AS) -17 on Segment Reporting issued by the institution of Charted Accountants of India is not applicable.

(L) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earning considered in ascertaining the Company's earnings per share is the net profit for the period after deducting brferences dividends and any attributable tax thereto for the period.

(M)Leases

The company does not have any lease or rental income during the year

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015

1. The balance in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock in trade/sundry debtors and loans and advances in the normal course of business would realize the value atleast to the extent stated in the Balance sheet.

2. Based on information available with Company, there are no outstanding dues to enterprise under MSMED Act 2006, at the year end.