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Accounting Policies of Flora 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 accrual 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 Companeis 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 & 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

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.

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.

The Company has not accounted for Deferred Tax in accordance with the Accounting Standard issued by the Institute of Chartered Accountants of India. The deferred tax asset on account of opening unabsorbed loss and unabsorbed depreciation has not been recognised as the Company is of the opinion that there is no virtual certainty of realisation of the same

(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.

(I) Provisions, Contingent Liabilities and Contingent Assets

The company does not have any contingent liabilities and contingent assets. So the company does not provide any provision for the same.

(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 fabric. 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

The company does not have any lease or rental income during the year


Mar 31, 2013

I. Accounting convention :

The financial statements have been prepared under Historical Cost Convention on the basis of going concern and in accordance with the accounting standards referred to inSection211 (3C) of the Companies Act, 1956, wherever applicable.

II. Fixed Assets & Depreciation

a) Fixed Assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortization and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has been provided on Straight-line method at the rates specified in the Schedule XIV of the Companies Act ,1956. Depreciation on tolls and dies are provided on the basis of useful life as determined by the Company.

Depreciation in respect of other assets has been calculated on written down value method as perthe rates specified in Schedule XIV of the Companies Act, 1956.

c) As at each balance sheet date, the carrying amount of assets is tested for mpairment so as to determine;

I. The provision for impairment loss, if any, required or;

ii. The reversal, if any , required for impairment loss recognized in previous periods, impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Ill Valuation of Inventories

a) Inventories are valued at lower cost and estimated net realizable value. Cost is arrived at on weighted average basis.

b) The basis of determining cost for various categories of inventories are as follows:

I. Raw Materials, Packing Materials and Stores and spares : Weighted Average basis.

II. Finished Goods and Work-in-Progress : Cost of Direct, Material, Labour and other Manufacturing overheads.

IV Revenue Recognition

a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

b) Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.

c) Claims made by the company and those made on the company are recognized in the Profit and Loss Account as and when the claims are accepted.

V. Research and Development

Revenue expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

VI. Employee Benefits

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

b) Post employment and other long term benefits which are defined benefit plans are recognized as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognized based on the present value of the obligation determined in accordance with Revised Accounting Standard 15 on Employee Benefits. Actuarial gains & Losses are charged to the Profit and Loss Account.

c) Payment to defined contribution schemes are charged as expense as and when incurred.

d) Termination benefits are recognizee! expense as and when incurred.

VII. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. All other borrowing costs are charged to revenue. A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

VIII.Taxes on Income

Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals. Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

IX Cash flow Statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard 3 issued by the Institute of Charted Accountants of India.

XI Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made.

XII Accounting Standards

Accounting Standards prescribed under Section 211 (3c) of the Companies Act, 1956, have been followed wherever applicable.


Mar 31, 2012

I. Accounting convention :

The financial statements have been prepared under Historical Cost Convention on the basis of going concern and in accordance with the accounting standards referred to inSection211 (3C) of the Companies Act, 1956, wherever applicable.

II. Fixed Assets & Depreciation

a) Fixed Assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortization and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Depreciation on Plant and Machinery, Motor Cars, Trucks and Veins has been provided on Straight-line method at the rates specified in the Schedule XIV of the Companies Act ,1956. Depreciation on tolls and dies are provided on the basis of useful life as determined by the Company.

Depreciation in respect of other assets has been calculated on written down value method as per the rates specified in Schedule XIV of the Companies Act, 1956.

c) As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine;

I. The provision for impairment loss, if any, required or;

ii. The reversal, if any, required for impairment loss recognized in previous periods, impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

III Valuation of Inventories

a) Inventories are valued at lower cost and estimated net realizable value. Cost is arrived at on weighted average basis.

b) The basis of determining cost for various categories of inventories are as follows:

I. Raw Materials, Packing Materials and Stores and spares: Weighted Average basis.

II. Finished Goods and Work-in-Progress; Cost of Direct, Material, Labour and other Manufacturing overheads.

IV Revenue Recognition

a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

b) Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.

Claims made by the company and those made on the company are recognized in the Profit and Loss Account as and when the claims are accepted.

V. Research and Development

Revenue expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

VI. Employee Benefits

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

b) Post employment and other long term benefits which are defined benefit plans are recognized as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognized based on the present value of the obligation determined in accordance with Revised Accounting Standard 15 on Employee Benefits. Actuarial gains & Losses are charged to the Profit and Loss Account.

c) Payment to defined contribution schemes are charged as expense as and when incurred.

d) Termination benefits are recognized expense as and when incurred.

VII. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. All other borrowing costs are charged to revenue. A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

VIII. Taxes on Income

Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals. Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

IX Cash flow Statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in Accounting Standard 3 issued by the Institute of Charted Accountants of India.

X Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made.

XI Accounting Standards

Accounting Standards prescribed under Section 211 (3c) of the Companies Act, 1956, have been followed wherever applicable.


Mar 31, 2010

A. The Company has been adopting accrual basis of accounting for all its regular sources of income and expenditure including sale of its manufactured goods and purchases of raw materials, stores, packing and other materials.

b. Fixed assets have been represented and disclosed in the Balance Sheet at their historical cost. Cost includes Excise Duty paid on machinery purchased on which no claim for MODVAT was made. Provision for depreciation has been made adopting straight line method at the rates prescribed in the Schedule XIV to the Companies Act, 1956.

c. Inventories:

Stock of finished goods and stock of waste are valued at cost or at net realisable value, which ever is less.Stock of raw materials, stores, packing materials and work in progress are valued at cost.

d. Retirement Benefits:

There was no liability to the company as at the close of the year towards retirement benefits to the employees.

B. BALANCE SHEET:

e. Working Capital Loan from Catholic Syrian Bank is secured by equitable mortgage of the companys land and building by deposit of title deeds and also by hypothecation of the plant and machinery, stores and spares acquired under the project for manufacture of fabric. This loan is secured by the personal guarantee of the chairman, managing director and ex director of the company.

f. Auditors Remuneration consists of Audit fee Rs.44,120/- towards Tax Audit and Taxation Services (including Service Tax).

g. Tax deducted at source from Interest, Commission and Job Work Charges amounted to Rs. 109802/- (Previous Year Rs.121926/-)


Mar 31, 2003

A. ACCOUNTING POLICIES

a) The Company has been adopting accrual basis of accounting for all its regular sources of income and expenditure including sale of its manufactured goods and purchases of raw materials, stores, packing and other materials.

b) Fixed Assets have been represented and disclosed in the Balance Sheet at their historical cost, Cost includes Central Excise Duty paid on machinery purchased on which no claim for MODVAT was made. Provision for depreciation has been made adopting straight line method at the rates prescribed in the Schedule XIV to The Companies Act, 1956.

c) Inventories:

i) Stock of finished goods and stock of waste are valued at cost or at net realisable value, whichever is less. ii) Stock of raw materials, stores and packing materials and work in progress are valued at cost.

d) Retirement benefits:

There was no liability to the Company as at the close of the year towards retirement benefits to the employees.

e) Preliminary and Share Issue Expenses are being amortised and 1/10th of the same is written off every year.

B. BALANCE SHEET :

f) Term Loan from Catholic Syrian Bank is secured by equitable mortgage of the Companys land and building by deposit of title deeds and also by hypothecation of the plant and machinery, stores and spares acquired under the project for manufacture of fabric. This loan is secured by the personal guarantee of the Chairman, Managing Director and a Director of the Company.

g) Auditors remuneration consisted of Audit fee Rs. 15,000/- towards Tax Audit and Taxation Services (including Service Tax) Rs. 11,600/-

h) Tax deducted at source out of interest, commission and job work charges amounted to Rs. 2,24,696/- (Previous year Rs. 36,410/-)


Mar 31, 2002

A) The Company has been adopting accrual basis of accounting for all its regular sources of income and expenditure including sale of its manufactured goods and purchases of raw materials, stores, packing and other materials.

b) Fixed Assets have been represented and disclosed in the Balance Sheet at their historical cost, Cost includes Central Excise Duty paid on machinery purchased on which no claim for MODVAT was made. Provision for depreciation has been made adopting straight line method at the rates prescribed in the Schedule XIV to The Companies Act, 1956. For items costing Rs. 5000 or below, 100% depreciation has been charged and on prorate basis for additions made during the year.

c) Inventories:

i) Stock of finished goods and stock of waste are valued at cost or at net realisable value, whichever is less. ii) Stock of raw materials, stores and packing materials and work in progress are valued at cost.

d) Retirement benefits:

There was no liability to the Company as at the close of the year towards retirement benefits to the employees.

e) Preliminary and Share Issue Expenses are being amortised and 1/10th of the same is written off every year.

 
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