SIGNIFICANT ACCOUNTING POLICIES: 1. Basis of brparation of Financial Statements The financial statements have been brpared in conformity with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of Companies Act, 2013 as applicable). The financial statements have been brpared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company are consistent with those used in brvious year. 2. Use of Estimate The brparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard. 3. Fixed Assets Fixed assets are stated at cost (or re-valued amounts, as the case may be), less accumulated debrciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statement. Debrciation Debrciation on the fixed assets has been provided for on written down value method at the rates brscribed and in the manner specified in Schedule II to the Companies Act, 2013. Impairment i. The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. 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 WACC. ii. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. iii. A brviously recognised impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have brvailed by charging usual debrciation if there was no impairment. 4. Intangible Assets Intangible assets include miscellaneous expenditures that are capitalized if specific criteria are met and are amortised over their useful life, generally not exceeding 5 years. The recoverable amount of an intangible asset that is not available for use or is being amortized over a period exceeding 5 years should be reviewed at least at each financial year end even if there is no indication that the asset is impaired. 5. Leases Where the Company is the lessee Finance leases, where substantially all the risks and benefits incidental to ownership of the leased item, are transferred to the company, are capitalized at the lower of the fair value and brsent value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged to income. Lease management fees, legal charges and other initial direct costs are capitalised. If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease item, capitalized leased assets are debrciated over the shorter of the estimated useful life of the asset or the lease term. Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. Where the Company is the lessor Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including debrciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the P&L Account. 6. Inventories Inventories are valued at lower of cost or net realisable value. Raw material and manufactured finished goods are valued at cost .Cost is determined on using average cost method. 7. Revenue Recognition Revenue is recognised 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 Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. (ii) Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. (iii) Dividends Revenue is recognised when the shareholders' right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognised even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of revised schedule III of the Companies Act, 2013. 8. Foreign Exchange Transaction (a) Transaction denominated in foreign currencies is normally recorded at the exchange rate brvailing at the time of the transaction. (b) Monetary items denominated in foreign currency as at the balance sheet date are translated at the year end exchange rate. (c) Premium on forward cover contracts in respect of import of raw material is charged to profit & loss account over the period of contracts except in respect of liability for acquiring fixed assets, in which case the difference are adjusted in carrying cost of the same. 9. Employee benefits i Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the statutory authority are due. ii. Gratuity liability are defined benefit obligations and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. 10. Current Tax and Deferred Tax (i) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. (ii) Deferred tax resulting from timing difference between the book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. 11. Earning per share Basic EPS is computed using the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and diluted equity equivalent shares outstanding during the year except where the results would be anti-dilutive 12. Cash Flow Statement Cash flow statement is reported using the indirect method as specified in the Accounting standard AS-3, 'Cash Flow Statement' issued by The Institute of Chartered Accountants of India. 13. Provision, Contingent Liabilities and Contingent Assets Provision involving substantial degree of estimation in measurement is 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. 2. In the opinion of the Board, sundry debtors, loans and advances and other current assets and unsecured loans are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities is adequate and not in excess of the amount reasonably necessary. Some balances are subject to confirmation and reconciliation. 3. Segment Reporting: The Company operates in only one reportable segment that is trading of fabrics and readymade garments. Therefore no separate disclosure of segment wise information is required. 4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence discloses, if any relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given. 5. Previous year figure has been regrouped, rearranged and restated whenever necessary As per our report of even date attached For Rajendra K. Gupta & Associates Chartered Accountants Firm Registration No:108373W Sd/- Rajendra Kumar Gupta Partner Membership No. 9939 For and on behalf of Board of Directors Thomas Scott (India) Limited Sd/- Brijgopal Bang Managing Director (DIN: 00112203) Sd/-Raghvendra Bang Director ( D IN: 003 56811) Sd/-Madhusudan Indoria Chief Financial Officer Rashi Bang Company Secretary Place : Mumbai Date : 30th May 2015 |