SIGNIFICANT ACCOUNTING POLICIES: a. BASIS OF ACCOUNTING The financial statements are brpared under historical cost convention on an accrual basis and are in accordance with the requirement of the companies Act, 2013. b. FIXED ASSETS AND DEbrCIATION Fixed assets are stated at cost less accumulated debrciation/impairment losses if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation Debrciation on Fixed Assets is provided to the extent of debrciable amount provided on Straight Line Method (SLM). Debrciation is provided based on useful life of the assets as brscribed in Schedule II to the Companies Act, 2013. In respect of additions or extensions forming an integral part of existing Fixed Assets, debrciation is provided as aforesaid over the residual life of the respective assets. c. VALUATION OF INVENTORY Raw material is valued at cost & finished cloth is net of excise and valued at cost or market price whichever is lower on FIFO basis, Scrap is valued at realizable market value. Due allowances is made for defective & obsoletes wherever necessary based on the past experience of the company. Cost of work in progress and manufactured goods include material, labour and other appropriate overhead wherever applicable. d. EMPLOYEE BENEFIT Gratuity liability is not determined and not provided at the end of the each financial year however same is accounted on cash basis. e. REVENUE RECOGNITION Process charges are recognized as income as and when the invoice has been made in the name of customer. Process charges receipt and payment are net of discount, claim and excludes excise duty as applicable. Export sales are stated at C.I.F. value & Domestic sales are net of local taxes. Export Incentives are accounted for on accrual basis. Interest income is accounted on time proportionate basis. f. IMPAIRMENT OF ASSETS At balance sheet date, an assessment is done to determine whether there is any indication impairment in the carrying amount of the company's fixed assets. If any such indication exits, the asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. TAXES ON INCOME Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with income tax laws) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realized. g. FOREIGN CURRENCY TRANSACTION (i) Transactions of foreign currencies entered into and those settled during the year in foreign currency are recorded at the actual exchange rates brvailing at the time of the transactions. (ii) Foreign currency transactions remaining unsettled at the year end and not covered by forward contract are translated at the exchange rates brvailing at the year end. (iii) In case of item which are covered by forward exchange contract, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the brmium paid on forward contract is recognised over the life of the contracts. Forward exchange contracts outstanding as at year end are calculated at the year end rate and mark to market profit/loss is dealt in the statement of Profit & Loss Account. h. USE OF ESTIMATES The brsentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results arte known/materialized. i. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS Provisions involving degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are disclosed separately. j. INVESTMENTS Investments are classified into current and long-term investments. Current investments are stated at lower of cost or market value. Long-term investments are carried at cost less provisions, if any, for permanent diminution in the value of such Investment. NOTE:1.Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortized carrying value is being debrciated/amortized over the revised/remaining useful lives by a revised WDV rate on written down value method. The written down value of fixed assets whose lives have expired as at 01.04.2014 have been adjusted net of tax, in the opening balance of Profit and Loss Account amounting to Rs.2,80,404.94 NOTE:2Expenditure in Foreign Currency: - Foreign Traveling Expenses Rs.-16,18,171.00 (Previous Year Rs. 6,99,537.00) - Earning in foreign Currency (Export/F.O.B.) Rs. 92,10,50,598.47 (P. Y. Rs. 81,55,16,566.26 ) NOTE:3.The Company has not provided for gratuity liabilities and leave salaries as same has not been ascertained, however it will be recognized on cash basis. The method adopted by company & disclosures made hereinabove are not in accordance with AS-15 (Revised) issued by The Institute of Chartered Accountants of India. NOTE:4.Consequent to issue of Accounting standard 22 "Accounting for Taxes on Income" by 'The Institute of Chartered Accountant of India", the Company recorded the deferred Tax Liabilities on account of timing difference & deferred tax charge for the year is Rs 35,39,012.69 (P.Y. Rs. 33,65,267.56) which has been credited / debited to Statement of Profit & Loss. NOTE:5.Company has advanced unsecured loan of Rs. 933.60 Lacs of companies in which directors are interested. The maximum balance outstanding at any time during the year to such parties / companies is Rs. 1,017.63 Lacs. NOTE:6.Derivative Instruments: The Company uses forward contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes. Details of outstanding forward contract as on 31.3.2015 have been given below:- NOTE:7..Company does not have complete information to determine Micro, Small and Medium Enterprises as specified in Micro, Small and Medium Enterprises development Act, 2006 hence it is not possible for us to verify the amount due to such enterprises. NOTE:8.As at March 31, 2015, the company has reviewed the future earnings of all the cash generating units in accordance with the Accounting Standard 28 "Impairment of Assets. As the carrying amount of assets does not exceed the future recoverable amount, consequently, no adjustment to carrying amount of assets is considered necessary by the Management. NOTE:9.In the Opinion of the Management, the current Assets and Loans and Advances as shown in the books are expected to realise at their Book Values in the normal course of business and adequate provision have been made in respect of all known liabilities. NOTE:10.Certain balances under the heads Sundry Debtors, Loans & Advances, Sundry Creditors are subject to confirmations from the respective parties and consequential reconciliation, if any. NOTE:11. Previous year's figures have been regrouped/ rearranged/ reclassified wherever necessary to conform to this year's brsentation. As per our report of even date For : SUNDARLAL, DESAI & KANODIA CHARTERED ACCOUNTANTS FOR AND ON BEHALF OF THE BOARD OF DIRECTORS (M. B. DESAI) PARTNER DIRECTOR DIRECTOR Regd. Off: 384/M 5th Floor, Dhabolkarwadi, Kalbadevi, Mumbai:- 400002CIN: L17110MH1983PLC030245 Place: MUMBAI Dated: :29th May,2015 |