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Accounting Policies of Adinath Textiles Ltd. Company

Mar 31, 2015

(A) Accounting Conventions:

The company's financial statements have been prepared in accordance with the historical cost convention on accural basis of accounting , as applicable to going concern in accordance with generally accepted accounting principle in india( Indian GAAP), mandatory accounting standards prescribed in the companies (Accounting Standards) Rules 2006 issued by Central Government in consultation with the provisions of companies act, 2013 to the extent applicable. The financial statements are presented in Indian rupees.

All assets and liabilities have been classification as current or non current as per company's normal operating cycle and other criteria set out in the Schedule-III of Companies Act, 2013. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or non current classification of Assets and liabilities..

(B) Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Difference between the actual results and estimates are recognised in the year in which the results are known/materialised. Example of such estimates include provision for doubtful debts, employee benefits, provision for income tax, the useful lives of depreciable fixed assets and provision for impairment.

(C) Revenue Recognition

1. Sales are recognized at the time of delivery of goods from the factory,net of trade discount & sales tax.

2. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

(D) Fixed Assets:

Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidental expenses related to acquisition net of capital subsidy relating to specific fixed assets.

(E) Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net realisable value. The cost formula used for valuation of inventories are:-

1. Cost of stores & spares is calculated at weighted average of cost plus direct expenses.

2. Wastes are valued at net realisable value.

(F) Depreciation

i) Depreciation for the year has been provided on Straight Line Method on the basis of useful lives specified in the Schedule-II of Companies Act, 2013 as against the amount of depreciation calculated on the basis of rates of depreciation in respect of various assets contained in schedule XIV of the Companies Act, 1956.

In view of this change carrying amounts of various tangible fixed assets as at 1st April, 2014. After retaining residual value of an amount of Rs.112619/- has been recognized in the opining balance of retained earning net of differed tax of Rs.50360/- on account of change in useful life of assets. In other cases, the carrying amounts as at 1st April, 2014 have been depreciated over the revised useful life of the assets as per schedule-II. The depreciation for the year is higher to the extent of Rs. 788251/- on account of this change and accordingly the profit for the year is lower by Rs. 788251/-

ii) Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%.

(G) Accounting for Taxes on Income

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

(H) Employee Benefits

(i) Short - term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss statement of the year in which the related service is rendered.

(ii) Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the Profit and Loss statement.

(iii) The liability for Gratuity is provided on the basis of actuarial valuation at the end of financial year.

(iv) Provision for leave encashment is made on the basis of actuarial valuation at the end of the year.

(I) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognised nor disclosed in financial statements.

(J) Investments

Long term investments are carried "at cost" Less Provision, if any, for diminution in value, which is other than temporary.

(K) Segment Reporting

The Company is a single segment company engaged in manufacturing of blended acrylic yarn. Accordingly the disclosure requirement as prescribed in the Accounting Standard (AS) -17 on Segment Reporting issued by the institution of Charted Accountants of India is not applicable.

(L) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earning considered in ascertaining the Company's earnings per share is the net profit for the period after deducting preferences dividends and any attributable tax thereto for the period.

(M) Leases

Rental Income from factory building given on operating lease, which can be renewed by the mutual consent of the parties after the expiry date, is recognised as income in the profit & loss statement .

The Micro, Small and Medium Enterprises Development Act, 2006 has come into force with effect from October 2, 2006. As per the Act, the company is required to identify the Micro and Small Vendors/Service providers and pay interest to them on overdue beyond the specified period irrespective of the terms agreed upon. The company has not received any confirmation from its Vendors/Service Providers regarding their status of registration under the said Act, which has been relied upon by the auditors, hence prescribed disclosures under Section 22 of the said Act has been provided.


Mar 31, 2014

(A) Accounting Conventions:

The company''s financial statements have been prepared in accordance with the historical cost convention on accural basis of accounting , as applicable to going concern in accordance with generally accepted accounting principle in india, mandatory accounting standards prescribed in the companies (Accounting Standards) Rules 2006 issued by Central Government in consultation with the provisions of companies act, 1956 to the extent applicable. The financial statements are presented in Indian rupees.

All assets and liabilities have been classification as current or non current as per company''s normal operating cycle and other criteria set out in the Revised Schedule VI of Companeis Act, 1956. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or non current classification of Assets and liabilities.

(B) Use of Estimates

The preparation of financial statements requires the managaement to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provision for doubtful debts, employee benefits, provision for income tax, the useful lives of depreciable fixed assets and provision for impairment.

(C) Revenue Recognition

1. Sales are recognized at the time of delivery of goods from the factory,net of trade discount & sales tax.

2. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

(D) Fixed Assets:

Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidential expenses related to acquisition net of capital subsidy relating to specific fixed assets.

(E) Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net realisable value. The cost formula used for valuation of inventories are:- 1. cost of stores & spares is calculated at weighted average of cost plus direct expenses. 2. Wastes are valued at net realisable value.

(F) Depreciation

Depreciation has been provided on Straight Line basis in term of Schedule XIV to the Companies Act 1956. Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%.

(G) Accounting for Taxes on Income

The Company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the financial statements.

(H) Employee Benefits

(i) Short - term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss statement of the year in which the relatedservice is rendered.

(ii) Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the Profit and Loss statement.

(iii) The liability for Gratuity is provided on the basis of actuarial valuation at the end of financial year.

(iv) Provision for leave encashment is made on the basis of acturial valuation the close of the year.

(I) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result so past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognised nor disclosed in financial statements.

(J) Investments

Long term investments are carried "at cost" Less Provision, if any, for diminution in value, which is other than temporary.

(K) Segment Reporting

The Company is a single segment company engaged in manufacturing of blended acrylic yarn. Accordingly the disclosure requirement as prescribed in the Accounting Standard (AS) -17 on Segment Reporting issued by the institution of Charted Accountants of India is not applicable.

(L) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earning considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preferences dividends and any attributable tax thereto for the period.

(M) Leases

Rental Income from factory building given on operating lease, which can be renewed by the mutual consent of the parties after the expiry date, is recognised as income in the profit & loss statement.


Mar 31, 2013

(A) Accounting Conventions:

The company''s financial statements have been prepared in accordance with the historical cost convention on accrual basis of accounting, as applicable to going concern in accordance with generally accepted accounting principle in India, mandatory accounting standards prescribed in the Companies (Accounting Standards) Rules 2006 issued by Central Government in consultation with the provisions of Companies act, 1956 to the extent applicable. The financial statements are presented in Indian rupees.

All assets and liabilities have been classification as current or non current as per company''s normal operating cycle and other criteria set out in the Revised Schedule IV of Companies Act, 1956. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or noncurrent classification of Assets and liabilities.

(B) Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provision for doubtful debts, employee benefits, provision for income tax, the useful lives of depreciable fixed assets and provision for impairment.

(C) Revenue Recognition

1) Sales are recognized at the time of delivery of goods from the factory, net of trade discount & sales tax.

2) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

(D) Fixed Assets:

Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidentals expenses related to acquisition net of capital subsidy relating to specific fixed assets.

(E) Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net realizable value. The cost formula used for valuation of inventories are:-

1) cost of stores & spares is calculated at weighted average of cost plus direct expenses.

2) Wastes are valued at net realizable value.

(F) Depreciation

Depreciation has been provided on Straight Line basis in term of Schedule XIV to the Companies Act 1956. Assets costing Rs. 5000/-or less acquired during the year are depreciated at 100%.

(G) Accounting for Taxes on Income

The Company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the financial statements. Provisions for current income tax is not required as the company''s assessable income is NIL due to unabsorbed depreciation, carry forward of losses and non applicability of MAT.

(H) Employee Benefits

i) Short - term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss statement of the year in which the related service is rendered.

ii) Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the Profit and Loss statement.

iii) The liability for Gratuity is provided on the basis of actuarial valuation at the end of financial year.

iv) Provision for leave encashment is made on the basis of actuarial valuation the close of the year. (I) Provisions. Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result so past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognized nor disclosed in financial statements.

(J) Investments

Long term investments are carried "at cost" Less Provision, if any, for diminution in value, which is other than temporary.

(K) Segment Reporting

The Company is a single segment company engaged in manufacturing of blended acrylic yarn. Accordingly the disclosure requirement as prescribed in the Accounting Standard (AS) -17 on Segment Reporting issued by the institution of Charted Accountants of India is not applicable.

(L) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earning considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preferences dividends and any attributable tax thereto for the period.

(M)Leases

Rental Income from factory building given on operating lease, which can be renewed by the mutual consent of the parties after the expiry date, is recognized as income in the profit & loss statement.


Mar 31, 2012

A. Accounting Conventions:

The company's financial statements have been prepared in accordance with the historical cost convention on accural basis of accounting, as applicable to going concern in accordance with generally accepted accounting principle in india, mandatory accounting standards prescribed in the companies (Accounting Standards) Rules 2006 issued by Central Government in consultation with the provisions of companies act, 1956 to the extent applicable. The presented in Indian rupees.

Ail assetsand liabilities have been classification as current or non current as per company's normal operating cycle and other criteria set out in the Revised Schedule IV of Act, 1956. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or non current classification of Assetsand liabilities.

B. Revenue Recognition

1. Sales are recognized at the time of delivery of goods from the factory, net of trade discount & sales tax.

2. Interest income is on time proportion basis taking into account the amount outstanding and the rate applicable

C. Fixed Assets

Fixed assets are stated at cost of expenses related to acquisition net of capital subsidy relating to specific fixed assets.

D. Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net value. The cost formula used inventories are:-

1. In respect of raw material and stores and spares have been valued at cost on Fl FO basis.

2. cost of stores & spares is calculated at weighted average of cost plus direct expenses.

3. Wastes are valued at net value.

E. Depreciation

Depreciation has been provided on Straight Line basis in term of Schedule XIV to the Companies Act 1956. Assets costing Rs. 5000/- or during the year are depreciated at 100%.

F. Accounting for Taxes on Income

Deferred Tax is recognized subject to the consideration of Prudence on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal on one or more subsequent periods. Deferred Tax Assets are not recognized on unabsorbed depreciation and carry forwards of Losses unless there is virtual certainty that sufficient future Taxable income will be available against which such deferred Tax Assets can be realized.

G. Employee Benefits

i) Short-term employee benefits are amount in the profit

and loss statement of the year in which the is rendered. ii) Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident

Fund and Miscellaneous t, 1952 and to the Profit and Loss statement, iii) Gratuity

The liability for Gratuity is provided on the basis of actuarial valuation at the end of financial year. iv) Provision for leave encashment is made on the basis of H. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement when there is a present obligation as a result so past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognized nor disclosed in financial statements.

I. Investments

Long term investments are carried "at cost" Less Provision, if any, for diminution in value, which is other than temporary.

J. The Company is a single segment company engaged in manufacturing of blended acrylicyarn. Accordingly the disclosure requirement as prescribed in the Accounting Standard (AS) -17 on Segment Reporting issued by the institution of Charted Accountants of India is not applicable.

K. Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earning considered in ascertaining the Company's earnings per share is the net profit for the period after deducting preferences dividends and any attributable tax thereto forthe period.

L. Leases

Rent Income from factory building given on operating lease, which can be renewed by the mutual consent of the parties after the expiry date, is recognized as income in the profit & loss statement


Mar 31, 2010

A)Basis of preparation of accounts

i) These accounts are prepared under the historical cost convention in accordance with generally accepted accounting principles and provisions of the Companies Act 1956 as applied consistently by the Company.

ii) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

b)Revenue Recognition

Sale revenue is recognised on dispatch of goods, net of trade discount & sale tax.

c) Inventories

Inventories are valued at lower of cost or net realisable value except waste produced which is valued at realisable value. Cost of store and spares is calculated at weighted average of cost plus direct expenses.

d) Depreciation

Depreciation has been provided on Straight Line basis in term of Schedule XIV to the Companies Act 1956. Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%.

e) Fixed Assets

Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition.

f) Accounting for Taxes on income

Deferred Tax is recognized subject to the consideration of Prudence on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal on one or more subsequent periods. Deferred Tax Assets are not recognised on unabsorbed depreciation and carry forwards of Losses unless there is virtual certainty that sufficient future Taxable income will be available against which such deferred Tax Assets can be realised.

g) Employee Benefits:

i) Gratuity: The liability for gratuity is provided on the basis of actuarial valuation as at the close of year.

ii) Provident Fund : Contribution to The provident fund is provided in accordance with the Employees Provident Fund and Miscellaneous Provisions Act,1952 and recognized as expense in the Profit & Loss A/c.

iii) Leave Encashment: Provision for leave encashment is made on the basis of actuarial valuation as at close of the year.


Mar 31, 2009

A) Basis of preparation of accounts

i) These accounts are prepared under the historical cost convention in accordance with generally accepted accounting principles and provisions of the Companies Act 1956 as applied consistently by the Company ii) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

b) Revenue Recognition

Sale revenue is recognised on dispatch of goods, net of trade discount & sale tax

c) Inventories

Inventories are valued at lower of cost or net realisable value except waste produced which is valued at realisable value. Cost of store and spares is calculated at weighted average of cost plus direct expenses.

d) Depreciation

Depreciation has been provided on Straight Line basis in term of Schedule XIV to the Companies Act 1956. Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%

e) Fixed Assets

Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition.

f) Accounting for Taxes on income

Deferred Tax is recognized subject to the consideration of Prudence on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal on one or more subsequent periods. Deferred Tax Assets are not recognised on unabsorbed depreciation and carry forwards of Losses unless there is virtual certainty that sufficient future Taxable income will be available against which such deferred Tax Assets can be realised.

g) Employee Benefits:

i) Gratuity: The liability for gratuity is provided on the basis of actuarial valuation as at the close of year. ii) Provident Fund : Contribution to The provident fund is provided in accordance with the Employees Provident Fund and Miscellaneous Provisions Act,1952 and recognized as expense in the Profit & Loss A/c.Leave Encashment: Provision for leave encashment is made on the basis of actuarial valuation as at close of the year.

 
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