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

1. GENERAL INFORMATION

ADINATH 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 Blended acrylic Yarn and Trading of Unstitched Suitings, Shirtings & Dress Materials.

2. SIGNIFICANT ACCOUNTING POLICIES

(A) Accounting Conventions:

The company's financial statements have been brpared in accordance with the historical cost convention on accural 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 Companies 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.

In view of this change carrying amounts of various tangible fixed assets as at 1st April, 2014. After retaining residual value of an amount of Rs.112619/- has been recognized in the opening balance of retained earning net of deferred tax of Rs.50360/- on account of change in useful life of assets. In other cases, the carrying amounts as at 1st April, 2014 have been debrciated over the revised useful life of the assets as per schedule-II. The debrciation for the year is higher to the extent of Rs. 788251/- on account of this change and accordingly the profit for the year is lower by Rs. 788251/-

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

(G) Accounting for Taxes 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.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

(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.

(iii) The liability for Gratuity is provided on the basis of actuarial valuation at the end of financial year.

(iv) Provision for leave encashment is made on the basis of actuarial valuation at the end of the year.

(I) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognised nor disclosed in financial statements.

(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 blended acrylic yarn. 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

Rental Income from factory building given on operating lease, which can be renewed by the mutual consent of the parties after the expiry date, is recognised as income in the profit & loss statement . 

2 In the opinion of the Board of Directors, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except as exbrssly stated otherwise.

3 Since the company has become sick and has been registered with the Board for Industrial and Financial Reconstruction.

4 Confirmation of balances, whether in debit or credit from parties have not been obtained. As such their effect on Profit & Loss Account cannot be reflected.

5 As per Accounting Standard (AS)-28 on "Impairment of Assets"At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

6 Previous year figures have been regrouped/recasted wherever necessary to make them comparable.

7 Sundry Debtors exceeding six month amount to Rs.11858779.89/- ,against which provision of Rs 5500000 /- has been made. However the company has filed suits against some of the debtors whose outstanding amount as on 31.03.2015 is Rs.4176132/-

 These are the notes to financial statements referred to in our report of even date.

For Dass Khanna & Co.

Chartered Accountants

(Rakesh Soni)

Partner

For and on behalf of the Board

 (Rajesh Kumar) CFO

(Preet Kanwar Singh) Company Secretary

(Arun K. Goel) Director

(Rajneesh Oswal) Managing Director

PLACE : LUDHIANA

DATED : 28.05.2015