| (i) BASIC OF PREPARATION OF FINANCIAL STATEMENTS
(a) The financial statements have been prepared 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 presentation 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 depreciation.
(iv) DEPRECIATION AND AMORTISATION
(a) Depreciation on fixed assets are provided on straight line method
at the rates prescribed under Schedule XIV of the Companies Act, 2013,
subject to writing off of 95% of the original cost.
(b) Difference in Depreciation 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 prevailing 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 prevailing at the year end. The net variation arising out
of the said translation are adjusted to the cost of the Fixed Assets.
Depreciation 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 present 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.
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