NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH, 2015 Note 1 : Accounting Policies 1. Basis of brparation of financial statement (a) Basis of Accounting: The financial statements have been brpared and brsented under the historical cost convention on accrual basis of accounting to comply with the accounting standards notified under the relevant provisions of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014. All Assets and Liabilities have been classified as current or non current as per the company's normal operating cycle and other criteria set out in Schedule III to Companies Act, 2013. Based on the nature of product and the time between the acquisition of assets for processing and their realisation in cash or cash equivalent, the company has ascertained its operating cycle to be 12 months for the purpose of current and non current classification of assets and liabilities. (b) Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. 2. Fixed Assets All Fixed Assets are stated at cost net of recoverable taxes, less of accumulated debrciation / amortisation and impairment loss if any. The cost of Fixed Assets comprises its purchase price, borrowing cost and any other cost directly attributable to bringing the assets to its working condition for its intended use. Capital Subsidy received for a specific asset is reduced from its cost.The expenditure incurred on commissioning of the project, including the expenditure incurred on test runs and experimental production, is capitalised. 3. Debrciation Debrciation on all tangible fixed assets is provided under Straight Line Method based on its useful lives as brscribed under Schedule II of Companies Act, 2013. Leasehold land is amortised over the primary lease period. Intangible assets are amortised over their estimated useful life. 4. Lease Accounting Lease rentals on assets taken on lease are recognised as expense in the statement of Profit and loss account on an accrual basis over the lease term. 5. Inventory a) Raw materials, work in progress, finished goods, packing materials, stores, spares, traded goods and consumables are carried at the lower of cost and net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis. Damaged, unserviceable and inert stocks are suitably debrciated. b) In determining cost of raw materials, packing materials, traded goods, stores, spares and consumables, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their brsent location and condition. c) Cost of finished goods and work-in-process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs 6. Investments Long term investments are carried at cost. Provision for diminution in the value of long term investments is made only if such a decline is not temporary in the opinion of the management. Short term investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Profit and loss on sale of investments is determined on a first in first out (FIFO) basis. 7. Revenue Recognition Revenue is recognised only when there is no significant uncertainty as to the measurability / collect-ability of amount. 8. Transactions in Foreign Exchange Transaction in foreign currency is recorded at the exchange rate brvailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the statement of profit and loss except in case of long term liabilities where they relate to acquisition of fixed assets in which case they are adjusted to carrying amount of fixed assets. The brmium on forward exchange contracts is recognized over the period of the contracts in the profit and loss account. 9. Employee Benefits (i) Short Term Employee Benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid. (ii) Post-Employment Benefits: (a) Defined contribution plans Defined contribution plans are, Government administered Provident Fund Scheme and Government administered Pension Fund Scheme for all employees and Superannuation scheme for eligible employees. The Company's contribution to defined contribution plans are recognized in the profit and loss account in the financial year to which they relate. The interest to the beneficiaries every year is being notified by the Government. (b) Defined benefit plans (i) Gratuity The Company provides for gratuity, a defined benefit retirement plan covering eligible employees, The Company makes a lump-sum payment to vested employees at retirement,death, incapacitation or termination of employment based on respective employee's salary and tenure of employment with the company. Liabilities with regard to gratuity are determined by actuarial valuation performed by an independent actuary at each balance sheet date using the Projected Unit Credit Method. The gratuity liability being unfunded, the company recognises the obligation in balance sheet as liability in accordance with Accounting Standard 15 Employee Benefits. Acturial Gain / Loss arising from experience adjustments and changes in actuarial assumptions are recognised in statement of Profit & Loss in period in which they arise. (ii) Compensated Absences (Leave Encashment) The Employees of the Company are entitled to compensated absences which are both accumulating (subject to maximum limit) and non accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation using the Projected Unit Credit Method on the additional amount expected to be paid or availed as a result of unused entitlement that has accumulated at balance sheet date. Expense on non accumulating compensated absences is recognised in the period in which absences occur. 10. Provision for Taxation Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed debrciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extant there is reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization. Minimum Alternate Tax credit (MAT Credit) is recognized as an asset only when and to the extant there is a convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT Credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period. 11. Provisions and Contingencies The company creates a provision when there exists a brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a brsent obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made. 12. Earnings per share The basic and diluted earnings per share ("EPS") is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year. 2 There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. 3 The Company is engaged in Manufacturing of textiles Products which is considered as the only reportable business segment. 4 The Company reviewed the old provision for expenses / liability and has written back the amount which are not payable, hence the expenses for the year are net of written back amount. 5 Mens Club s.p.a., the Company's subsidiary was liquidated and all the formalities with reference to the liquidation are in advance stage. Therefore the financials of the subsidiary is not consolidated. The loss on account of liquidation will not exceed original investment amount of R 3 lacs. 6 Related Parties transactions during the year. During the year Rent of R20226 (Previous year Nil ) has been paid to associate company i.e. Morarjee Textiles Ltd. As per our Report of even date For & on Behalf of D.Dadheech & Co Chartered Accountants FRN No.101981W Devesh H Dadheech Proprietor M.No.33909 For and on behalf of Board of Directors Mr. R. K. Rewari Managing Director Mr. Shardul Doshi Director Mr. Jagdish G. Sharma Chief Financial Officer Ms. Vrushali Nar Company Secretary Place : Mumbai , 27th May, 2015 |
