NOTES FORMING PART OF THE ACCOUNTS: Note- (1) Significant Accounting Policies: (i) Basis of accounting: The financial statements have been brpared to comply in all material respects with the Notified Accounting Standard by Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been brpared under the historical cost convention on an accrual basis and in accordance except in case of assets for which provision for impairment is made and revaluation is carried out. The Accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year. (ii) Fixed Assets: Fixed Assets (except land) are stated at cost of acquisition (or revalued amount as the case may be) (net of CENVAT) less accumulated debrciation and impairment losses if any. Cost comprised purchase price and any attributable cost of bringing the asset to its working condition for its intended use. (iii) Debrciation: Debrciation on all assets is provided on Straight Line Method basis over the useful lives of the assets estimated by the Management in accordance with Part C of the Schedule II of the Companies Act, 2013. (iv) Impairment: The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. (v) Investments: All investments have been classified as long term Investments, which are stated at lower of cost of acquisition or net realisable value. No provision is made in respect of diminution in the value of investment, which is temporary in nature. (vi) Inventories: Inventories were valued at cost and each year reasonable price is reduced for providing for decline in Net Realizable Values. (vii) Borrowing Costs: Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of asset upto the date when such asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred. (viii) Revenue Recognition: Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. i) Sale of Goods: Sales revenue comprises sale value of goods, and is accounted net off sales returns, discount and rate difference. ii) Interest: Revenue is recognized on a time proportion basis taking into account the amount accrued and the interest rate applicable. iii) Dividends: Dividend is recognized when the shareholders' right to receive payment is established till the balance sheet date. (ix) Provisions, Contingent Liabilities and Contingent Assets: a. 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. b. Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts. c. Contingent Assets are neither recognized nor disclosed in the financial statement, Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date. (x) Taxes on income: In accordance with the Accounting Standard - 22, Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India ('ICAI'), the company has recognized deferred tax assets resulting from timing differences between book and tax profits, unabsorbed debrciation, loss and other provisions at the rate of tax applicable to the company. (xi) Employee Benefits: i) Short term Employee Benefits: All employee benefits falling due within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave salary, ex-gratia are recognized in the period in which employee renders the related services. ii) Post Employment Plans: a) Defined Contribution Plan: Provident fund and pension scheme are the defined contribution plan in the company. The contribution paid /payable under the scheme is recognized during the period in which the employee renders the related services. b) Defined Benefit Plans: Employee Gratuity fund scheme is the defined benefit plan. The Company makes annual contributions for gratuities to funds administered by trustees and managed by insurance company for amounts notified by the said insurance company. The brsent value of obligation under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary. (2) Disclosure as required by AS 29 "Provisions, Contingent Liability and contingent Assets" in respect of provisions as at 31st March, 2015: (a) Uncalled liability on partly paid up Shares Rs. 2500 (P.Y. Rs.2500). (b) Excise matters under appeal Rs. 30.42 Lacs (P.Y. Rs. 30.42 lacs) (c) Sales Tax matter under appeal Rs. 33.00 Lacs (P.Y. Rs. 33.00 Lacs) (d) Income Tax disallowance, matter pending under appeal Rs. 18.64 Lacs (P.Y Rs.18.64) (e) Income Tax disallowance, matter pending under appeal Rs. 50.64 Lacs (P.Y Rs. 50.64) (f) The Company has imported certain Plant and Machinery at concessional rate of custom duty under Export promotion Capital Goods (EPCG) scheme. The unit has been granted license for br-decided export obligation. As such, the liability that may arise for nonfulfillment of export obligation is currently non ascertainable. The said matter is pending with Deputy Commissioner of Customs, Raigad, Maharastra. (3) The company has identified only one segment i.e. Textiles. (4) Sundry debtors and Sundry creditors are subject to Confirmations and reconciliation, if any. (5) Provision for taxation for the year ended 31st March, 2015 has not been made in view of unabsorbed debrciation / Business losses brought forward from brvious years. (6) In the brvious years, the Company had undertaken the analysis to determine impairment of assets. Accordingly, the Company already has provided for the impairment of assets in terms of Para 112, 114 and 115 of the Accounting Standard 28 in the brvious years. The company is of the opinion that there are no further assets that needs to be provided for, in respect of impairment during the year 01.04.2014 to 31.03.2015. (7) Previous year's figures have been regrouped/recast, wherever considered necessary to make them comparable with current year's figure. Signature to Notes 1 to 25 As per our report of even date For Natvarlal Vepari & Co. Chartered Accountants Firm Reg. No. : 123626W Ravindra N. Vepari Partner Mem. No. : 006728 Place : Surat Date : 30th May, 2015 For and on behalf of the Board Mansukh K. Patel Wholetime Director Kiran M. Virani Director Dipak S. Patel CFO Place : Ankleshwar Date : 30th May, 2015 |