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Accounting Policies of Padam Cotton Yarns Ltd. Company

Mar 31, 2015

Corporate Information

The company is engaged in the business of providing consultation relating to textile industry and wholesale trading in Agricultural Pumping Seles and Implements during the year. The company Is having its Registered Office at 196,1st Floor. G.T. Road, Opp Road Cross Market, Karnal- 132001 & Corporate Office At C-5/2A, Rana Pratap Bagh, Opp Colony, New Delhi

2.1 Accounting Standards

The Company is non-SMC as defined In the General Instructions in respect of Accounting Standard notified under the companies (Accounting Standards) Rules, 2006 (as amended) 4 under section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules. 2014 Accordingly, the Company compiled with accounting Standards as applicable to a non Small and Medium Sited Company.

2.2 Basis of Accounting and Preparation of financial Statements

The financial statements of the Company have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP) Including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for adjustments required to compute financial accounts in accordance with the revised schedule VI.

2.3 Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates, judgments and assumptions to be made that affect the reporting amounts of assets and liabilities (including contingent liabilities) on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are knot/materialised. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised In the periods In which the results are known / materialise.

2.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts Of payments. The cash flows from operating, Investing and financing activities of the Company are segregated based on the available Information.

2.5 Inventor1es

Items of Inventories are valued at the lower of Cost and net realisable value after providing for. obsolescence. If any, except In case of by product which arc valued at net realizable value (on FIFO basis). Cost of inventories comprises or cost of purchase, cost of conversion and other cost is Including manufacturing overheads Incurred In bringing them to their respective present location and condition,

2.6 Depreciation and amortisation

Depreciation or. Fixed Assets provided to the Control or depreciable amount on the wrists down value (WDV) method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013.

2.7 Revenue Recognition

Sale of Goods

Revenue from operations including Sales of goods, services, service tax, excise duty and sales art recognised, adjusted net of returns and trade discounts, and gains on corresponding hedge contracts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery or goods to customers. Sales excludes Central sales. value added tax and TCS

2.8 Tangible fixed asset

Fixed assets, are carried at cost net of recoverable taxes, trade discounts and rebates and less accumulated depreciation and Impairment losses, I f any. The cost of Ta table fixed asset com praised Its purchase price, borrowing cost a any cost directly attributed We to bringing the asset to Is working conditions for is intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the assets. Subsequent expenditure related to an item of Tangible Asset are added to Is book value only If they Increase the future benefits from the existing assets beyond is previously asset behind is previously assessed standard or performance. Projects under which assets are not ready or their Intended use are disclosed under Capital Work-in Progress.

2.9 Intangible fixed assets

Intangible assets are stated at cost of acquisition net of recoverable taxed less accumulated amortisation/option and impairment loss, If any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to is working condition for is intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributed to the Intangible assets.

2.11 Employee Benefits

Defined Contribution Plans,

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made. These benefits Include performance incentive and compensated absences.

2.12 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax k recognised on timing differences, being the differences between the taxable Income and the accounting income that originate In one period and are capable of reversal In one or more subsequent periods. Deferred tax is measured using the rates and the lax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets In respect of unabsorbed depredation and carry forward of losses are recognised only It there Is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred lax assets are recognised for timing differences of other Items only to the extent that reasonable certainty exists that sufficient future taxable Income will be available against which these can be realised. Deferred assets and liabilities are offset if such Items relate to taxes on Income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their rachis ability 2.1) Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for Impairment. If any indication or impairment exists, the recoverable amount of such assets is estimated and Impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount.

2.14 Other Issues

The Company'* unit tor manufacturing of cotton yam, was destroyed in fire on 13/06/2001. The Insurance claim of the company was repudiated by the Insurance Company. The Hon' We National Consumer has decided the case of issuance of Insurance calm In favour of the company against which the Insurance company ha, filed an appeal before Hon'ble Supreme Court. The Company was allowed 50% clam by the Supreme Court against security, the same Is shown as new current liabilities as the matter is contingent and is tub Jud iced. The same has not been adjusted against the insurance claim receivable account, due to is contingent nature as a matter of abundant precaution and sheer uncertainly of the verdict of Hon' We Supreme court.


Mar 31, 2014

1.1 Accounting Standards

The Company is non-SMC as defined in the General Instructions in respect of Accounting Standard notified under the companies (Accounting Standards)

Rules, 2006 (as amended). Accordingly, the Company has compiled with accounting Standards as applica ble to a non Small and Medium Sized Company.

2.2 Basis of Accounting and Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for adjustments required to complile financial accounts in accordance with the revised shcedule VI.

2.3 Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in wh ich the results are known / materialise.

2.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary item s and tax is adjusted for the effects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow s from operating, investing and financing activities of the Company are segregated based on the available information.

2.5Inventories

Inventories are valued at the lower of Cost (on FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary

2.6Depreciation and amortisation

Depreciation has been provided on the writted down value method as per the rates prescribed in Sched ule XIV of the Companies Act, 1956. Regarding amortisation of MISC. Expenditure, these are being amortised over a period of 5 year from the commencements of operations of the company or from the year in which they are incurred whichever is later.

2.7 Revenue Recognition Sale of Goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales excludes Central sales,value added tax and TCS

2.8 Tangilble fixed assets

Fixed assets, are carried at cost less accumulated depreciation and impairment losses, if any. The c ost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

2.9 Intangible fixed assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses,

2.10 Foreing Exchange Differences Initial Recognition

Transactions in foreign currencies entered into by the Company and its transactions are accounted at the exchange rates prescribed under custom exchange rate notification.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company and its net invest ment in non-integral foreign operations outstanding at the Balance Sheet date are restated at the year-end bank ask rate.

Exchange differences arising out of these translations are charged to the Statement of Profit and L oss.

2.11 Employee Benefits

Defined Contribution Plans

The Company''s contribution to provident fund and superannuation fund are considered as defined contr ibution plans and are charged as an expense as they fall due based on the amount of contribution required to be made. The Company has created a Trust a Life Insurance Corporation of India under Group Gratuity Schem. The premium paid towards this scheme is charged to profit and loss account on accrual basis.

2.12 Segment Reporting

The Company has disclosed its business segment the primary segment as trading only hence there is no requirement for segment reporting as per AS 17 issued by ICAI. The company has provided consultancy to Firms from where it has earned the Income.

2.13 Earning Per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the number of equity shares outstanding during the year

2.14 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accorda nce with the provisions of the Income Tax Act, 1961.Deferred tax is recognised on timing differences, being the differences between the taxable inc ome and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured usin g the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences .Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that rea sonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities a re offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred t ax assets are reviewed at each Balance Sheet date for their realisability.

2.15 Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for im pairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount.

2.16 Other Issues

The Company''s unit was distroyed in fire on 13/06/2001. The Insurance claim of the company was repu diated by the Insurance Company. The Hon''ble National Consumer has decided the case in favour of the company against which the insurance company has filed an appeal before Hon''ble Supreme Court. The Company has been allowed 50% claim by the Supreme Court against security, the same is shown as n on current liabilities as the matter is contingent and is sub judiced. The same has not been adjusted against the insurance claim receiveable account. In Our opinion the Company should have adjusted the insurance claim received against the claimable amount and therefore, the non current assets and liab ilites should have been reduced by the amount received from New India Assurance Co Limited.


Mar 31, 2013

1.1 Accounting Standards

the Company is non-SMC is defined in the General Instruct*™ in respect of Accounting Standard notified under the companies (Accounting Standards) Rules, 1006 tas amended). Accordingly, the Company has compiled with accounting Sundardi at applira ble 1o a non Small and Medium Sited Company.

1.2 Bails of Accounting and Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accept
1.3 Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to mate estimates and assumptions considered In the reported amounts of duels and (iaMtties (including contingent liabilities} and the reported Income ano e.penses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future remits could differ due to these estimates and the differences between the actual results and the estimates arc recognised in the periods in which the results are known / materialise.

1.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (toss) before exraordlnary item s and Mi Is adjusted for the effectsof transactions of non- cash nature and any deferrals o. accruals of past or future cash receipts or payments. The cash flow s from operating, investing and flnanctni activities of [he Company are segregated based on the available Information.

1.5 Inventorles

Inventories are valued at the lower of Cost (on FIFO basis) and the net realisable value after providing for obsolescence and other tosses, where considered necessary

1.6 Depreciatlon and amortisation

Depreciation has been provided on thevrrltted down value method as per the rates prescribeoinScheduleXlvof the Companies Act, 19S6. ftegarding amortisation of MISC. E.pendllure. these .re being amortised over a period of S year from the commencements of operations of the company or from the year In which they are incurred whichever is later.

1.7 Revenue Recognition

Sale of Goods Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which genera* concedes with the delivery of goods to customers. Sales eidudes Central sales.vakje added tax and TCS

1.8 Tangllble liied assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses. If any, Thee ost of find assets includes interest on bo.row.ngs attributahle to acquisition of ou.lifying find assets up to the date the asset is ready for its Intended use and other incidental e.penses Incurred up to that date.

1.9 Intangible fixed assets

Inierlbte assets are carried at cost less accumulated amortisation and impairment losses,

1.10 Forcing Exchange Differences

currencies entered into by the Company and its transactions are accounted at the ..change rates prescribed under custom exchange rate notification.

Measurement of foreign currency monetary Items at the Balance Sheet data

Foreign currency monetary hems (other than derivative contracts) of the Company and Its net Invest mem in non-lntegral foreign operations outstanding at the Balance Sheet date are restated at the year-end bank ask rate.

Exchange differences arising out of these translations are charged to the Statement of Profit and L oss.

1.11 Employe* Benefits Defined Contribution Plant

The Company1! contribution 10 provident fune and superannuation fund are considered 11 defined contr ibutiofl plan* in arecharged is an e>penie at they fan due based on the amount ol contribution required to be made. The Company hai created » Trull a Life Insurance Corporation of Inoij under Group Gratuity Schem. Thepremkgm paid towards thh scheme it charged to profit and lots account on accrual turn.

1.12 Segment Reporting

The Company hai disclosed Its buiinelt segment tht primary segment as trading only hence there Is no requirement for legment reportingai per AS 17 issued by ICAI. The company has provided consultancy to firms from where It hai earned the income.

1.13 Earning Per Shire

Saik earnings cm ihart is competed by dividing the profit / (toss) after tin (including, tht oou ta> effect of extraordinary Itemi, if jny( by the number of equity tharet outstanding during the year

1.14 Taxes on Income

Current tax it the amount of ta> payable on the taxable Income for the year ai determined in accorda nee with the provisions of the Income Ta* Act. 1961. Defer red 1*1 Is recognised on timing differences, being the differences between the U.iW* inc ome and tht accounting income that originate in one period and are capable of reversal kn one or more subsequent periods. Deferred tan it measured using the tan rates and the la. laws enacted or substantially enacted ai at the reporting date. Deferred tai llabilttiet are recognised for an timing difference s. Deferred ta> assets in respect of unibtorbtd depreciation and carry forward of losset art recognised oniy If there it virtual certainty that there wMI be sufficient future taxable Income available to realise such assets. Deferred tai assets are recognised for timing differences of other Itemt onhy to the eitent that rea sonable certainty exbtt that sufficient future taxable income wi» be avaaable against which thttt can be rtalistd. Deferred la* assets and liabilities are offset if such rtemt relate 10 law on income levied by the same governing tan laws and the Company has a legally enforceable right for such set off. Deferred t a> astetl are reviewed at each Balance Sheet date for their realisabihty.

1.15 Impairment of Assets

The carrying values of assets /cash generating units at each Balance Sheet date are reviewed for Impairment. If any indication of impairment eihts, the recoverable amount of tuch assets it estimated and Impairment ii recognised, if the carrying amount of these assets eiceeds their recoverable amount.


Mar 31, 2010

A) GENERAL: The Accounts are prepared on the accounting principle of going concern Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting polices.

b) REVENUE RECOGNITION: Expenses and Income are considered payable and receivable on accrual basis. Except where stated otherwise.

c) FIXED ASSETS: There was no Fixed Assets with the Company during the FY. under audit.

d) INVENTORIES: There was no inventories as at the close of the Financial Year.

e) RETIREMENT BENEFITS: The Company has created a trust with Life Insurance Corporation of India under group gratuity scheme. The premium paid towards this scheme is charged to profit & loss account on accrual basis.

f) CURRENT ASSETS: Debtors & Loans & Advances are valued on net realisation basis.

g) PRELIMINARY EXPENSES: Preliminary Expenses are amortized over a period of 5 years.

 
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