1. Significant Accounting Policies (a) Basis of Preparation of Financial Statements (i) The financial statements of the company have been brpared and brsented in accordance with the generally accepted accounting principle under the historical cost convention on an accrual basis. These financial statements have been brpared as going concern and comply, in all material respects, with the Accounting Standards as brscribed under section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014. (ii) The accounting policies adopted in the brparation of the financial statements are consistent with those of brvious year. (b) Use of Estimates These financial statements have been brpared on the basis of estimates, wherever necessary, which have an effect on the reported amounts of assets and liabilities as on the date of the statements and the reported amounts of income and expenditure for the reporting period. The difference between actual and estimates is recognized in the subsequent period when the actual are known. (c) Revenue Recognition (i) Sales are recognized upon delivery of goods and are recorded net of trade discount. (ii) Revenue from job work processes are recognized as and when the related jobs are performed, the cost incurred up to reporting date for the in-completed jobs are carried to balance sheet under the head cost on job work in process. (iii) The company accounts for pro forma credits, refunds of duty of customs or excise,or refunds of sales tax in year of admission of such claims by the concerned authorities. Export benefits are accounted for as other operation income in the year of export based on eligibility and when there is no uncertainty on receiving the same. (d) Fixed Assets and Debrciation (i) Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation, less accumulated debrciation. Cost comprises of the purchase price and any other attributable cost of bringing the assets to its working condition for its intended use. At the balance sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of Company's fixed assets. If any such indication exists, the asset's recoverable amount is estimated .An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. After recognition of impairment loss, the debrciation charge for the assets is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any), on straight line basis over its remaining useful life. (ii) Debrciation on Tangible Fixed Assets is provided on straight line method over the useful lives of assets specified in Part C of Schedule II to the Companies Act 2013 read with the relevant notifications issued by the Department of Company affairs.Debrciation on assets acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal. (iii) Fixed Assets retired from active use has been stated at Net Realizable Value or Written down Value whichever is lower. (e) Impairment of Assets An asset is treated as impaired when its carrying cost exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. (f) Borrowing Costs Borrowing Costs that are directly attributable to acquisition of qualifying assets are capitalized for the period until the asset is ready for intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred. (g) Investments Long Term Investments are carried at cost less provision for permanent diminution in the value of such investments, if any. Current Investments are carried at the lower of cost and market value. (h) Inventories Raw Materials, Stock-in-process, Finished Goods are valued at lower of cost or net realizable value. Stores, Colours & Chemicals and Coal are valued at cost. Processed Goods Returned is valued at net realizable value. Cost of stock-in-process and finished goods include materials, labour, manufacturing overhead and other cost incurred in bringing the inventories to their brsent location. Items of Colour and Chemicals, Stores and Spares are charged to revenue at the stage of purchase and stock of such items as at the end of the year is accounted at cost. The stock of scrap / waste materials are valued at estimated net realizable value. (i) Foreign Currency Transactions: Transactions in foreign currencies are recorded at the exchange rate brvailing on the date of the transaction. (j) Taxes on Income (i) Current tax provision is based on the taxable income computed in accordance with the provision of the Income Tax Act, 1961. (ii) Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets are recognized on unabsorbed debrciation and carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The deferred tax in respect of timing differences which had originated during the tax holiday period and reversed during the tax holiday period had not been recognized to the extent the enterprise's gross total income is subject to the deduction during the tax holiday period. However deferred tax in respect of timing differences which had originated during the tax holiday period but reversed after the tax holiday period had been recognized in the year in which the timing differences originated. (k) Employee Benefits Defined Contribution Contributions to Provident/Pension Funds etc. are charged to Profit and Loss Account as incurred. Defined Benefit Plans The company provides retirement benefit in form of Gratuity on the basis of valuation, as at the Balance Sheet date, carried out by independent actuaries in accordance with AS-15 (Revised). The cost of non accumulating short term compensated absences with vesting rights are provided for as computed by the company. (l) 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. (m) Earning per Share Earning per share is calculated by dividing the profit attributable to the equity shareholder by weighted averages number by equity shares outstanding during the year. 34. The company operates in a solitary business segment i.e. textile business. Accordingly no further financial information for business segment is required to be given. 36. Assets retired from active use amounting to Rs. 4,02,05,150/- (P.Y. Rs. 4,08,82,000/-) being assets retired from active use on which debrciation has not been charged from the date of retirement. 37. Balances of sundry creditors sundry debtors loans and advances and amounts due to sundry debtors are subject to confirmations and reconciliation if any by the respective parties. 39. Pursuant to section 203 of The Companies Act, 2013("the act"), every listed company is required to appoint whole time Key Managerial Personnel as referred at section 2(51) of the act. During the current financial year the company has made sincere attempt to recruit such personnel through advertisement in print media however the company could not found the Company Secretary and the company is still in process of appointing the same. 40. Previous year figures have been regrouped, reclassified and reworked wherever necessary for comparative purpose. As per our attached Report of even date. FOR G. K. CHOKSI & Co. [Firm Registration No. 101895W] Chartered Accountants SANDIP A. PARIKH Partner Mem. No. 040727 FOR AND ON BEHALF OF THE BOARD SUNIL R. AGARWAL Chairman & Managing Director Din No. 00265303 YASH S. AGARWAL Director Din No. 02170408 DILIP P. NIRMAL Chief Financial Officer Place: Ahmedabad Place: Ahmedabad Date: 29th May, 2015 |