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Accounting Policies of Vandana Knitwear Ltd. Company

Mar 31, 2015

1. SYSTEM OF ACCOUNTING

A) The Company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis

B) Financial statements are based on historical cost. These costs are not adjusted to reflect the impact of the changing value of purchase power of money.

C) Accounting policies, not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles followed by the company.

2. USE OF ESTIMATE

The presentation of the financial statements in conformity with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on the Management's evaluation of relevant facts and circumstances as on the date of the financial statements. The actual outcome may diverge from these estimates.

3. FIXED ASSETS

Fixed assets are stated at cost less depreciation. Depreciation has been provided on the written down value method and at the rates and in the manner specified in Schedule II of the Companies Act, 2013.

4. INVESTMENT

Long term unquoted investment in companies have been valued at cost

5. INVENTORIES

Inventories are valued at cost (on FIFO basis) or at realizable value whichever is less.

6. DEPRECIATION

Depreciation has been provided on the written down value method and at the rates and in the manner specified in Schedule II of the Companies Act, 2013.

7. INCOME FROM INVESTMENT

Income from investments, where appropriate are taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

8. TREATMENT OF CONTINGENT LIABILITES

Contingent liabilities are disclosed by way of note to the accounts, if any.

9. ACCOUNTING FOR TAXES ON INCOME

Income tax expenses comprises current tax (i.e. amount of tax for the year determined in accordance with the income tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year)

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets / liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be ) to be realized.

The company offsets assets and liabilities representing current tax and deferred tax where it has a legally enforceable right to set off the recognized amounts and it intends to settle those assets and liabilities on a net basis.

10. BORROWING COSTS

The company has charged the entire borrowing costs to the Profit & Loss Account there being no qualifying asset with the company.

11. The company does not have any intangible assets

12. IMPAIRMENT OF ASSETS

Impairment is ascertained at each balance sheet date in respect of Cash Generating Units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable value. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

13. EMPLOYEE BENEFITS:

1. Short Term Employee benefits have been accounted for either as an expenses as a charge to Profit & Loss Account or as a liability if unpaid.

2. Post Employment Benefits:

a. Defined Contributions Plans: The Company has no liability towards any defined contributions plans.

b. Defined Benefit Plans: The Company accounts for expenditure on defined benefits plans on actual payment basis. It is the view of the management that, due to a small number of workers the liability of the company under defined benefit plans (i.e. gratuity) is not material considering the present composition of the work force and its volume of business. The company has no liability towards retirement benefits as on 31.03.2015.


Mar 31, 2014

1. SYSTEM OF ACCOUNTING

a) The Company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis except in respect of interest income on Non Performing Assets which is reckoned on realization basis as per the norms set by the Reserve Bank of India.

b) Financial statements are based on historical cost. These costs are not adjusted to reflect the impact of the changing value of purchase power of money.

c) Accounting policies, not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles followed by the company.

2. USE OF ESTIMATE

The presentation of the financial statements in conformity with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on the Management''s evaluation of relevant facts and circumstances as on the date of the financial statements. The actual outcome may diverge from these estimates.

3. FIXED ASSETS

Fixed assets are stated at cost less depreciation. Depreciation has been provided on the written down value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

4. INVESTMENT

The Investments in quoted equity shares have been treated as long term investment. Accordingly, these investment have been valued at cost.

5. INVENTORIES

Inventories are valued at cost (on FIFO basis) or at realisable value which ever is less.

6. DEPRECIATION

Depreciation has been provided on the written down value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

7. PRIOR PERIOD EXPENSES / INCOME

The Company follows the practice of making adjustments through "Expenses / Income under / over provided in previous year in respect of all material transactions pertaining to the period prior to current accounting year, if any.

8. INCOME FROM INVESTMENT

Income from investments, where appropriate are taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

9. TREATMENT OF CONTINGENT LIABILITES

Contingent liabilities are disclosed by way of note to the accounts, if any.

10. ACCOUNTING FOR TAXES ON INCOME

Income tax expenses comprises current tax (i.e. amount of tax for the year determined in accordance with the income tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year)

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets / liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be ) to be realised.

The company offsets assets and liabilities representing current tax and deferred tax where it has a legally enforceable right to set off the recognised amounts and it intends to settle those assets and liabilities on a net basis.

11. BORROWING COSTS

The company has charged the entire borrowing costs to the Profit & Loss Account there being no qualifying asset with the company.

12. The company does not have any intangible assets

13. IMPAIRMENT OF ASSETS

Impairment is ascertained at each balance sheet date in respect of Cash Generating Units. An impairment loss is recognized whenever the arrying amount of an asset exceeds its recoverable value. The recoverable amount is the greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

14. EMPLOYEE BENEFITS:

1. Short Term Employee benefits have been accounted for either as an expenses as a charge to Profit & Loss Account or as a liability if unpaid.

2. Post Employment Benefits:

a. Defined Contributions Plans: The company has no liability towards any defined contributions plans.

b. Defined Benefit Plans: The Company accounts for expenditure on defined benefits plans on actual payment basis. It is the view of the management that, due to a small number of workers the liability of the company under defined benefit plans (i.e. gratuity) is not material considering the present composition of the work force and its volume of business. The company has no liability towards retirement benefits as on 31.03.2014.


Mar 31, 2012

I SYSTEM OF ACCOUNTING

A) The Company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis.

B) Financial statements are based on historical cost. Theses costs are not adjusted to reflect the impact of the changing value of purchase power of money.

C) Accounting policies, not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles followed by the company.

II REVENUE RECOGNITION

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

III FIXED ASSETS

a) Fixed assets are carried at cost of acquisition inclusive of other incidental expenses directly related to respective fixed assets.

b) Depreciation on fixed assets have been provided on written down value method at the rates prescribed under schedule XIV to the Companies Act, 1956.

c) In case of additions to the fixed assets made during the year, depreciation has been provided on pro-rata basis from the date of addition.

d) Assets below 5000/- charged 100% depreciation.

IV INVESTMENTS : Investments are valued at Costs.

V CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Events accruing after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently are considered upto the date of approval of accounts by the Board of Directors, where material.

VI DEFERRED TAXATION

Deferred Tax resulting from timing differences between book and tax profits is accounted for under the liability method at the current rate of tax, to the extent that the timing differences are expected to crystallized as deferred tax charge/ benefits in the profit and loss account and as deferred tax asset / liabilities in the Balance Sheet.

VII TAXATION:

Current tax is determined as the amount of tax payable to the taxation authorities in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence, on timing difference being differences between taxable incomes and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods.

VIII USE OF ESTIMATE

The presentation of the financial statements in conformity with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on the Management's evaluation of relevant facts and circumstances as on the date of the financial statements. The actual outcome may diverge from these estimates.

IX The company does not have any intangible assets



X INVENTORIES

a) Raw materials are valued at cost or realizable value whichever is lower. The cost includes purchase price as well as incidental expenses like freight and octroi.

b) Finished goods are valued at estimated cost or realizable value whichever is lower.

c) Cost is arrived at on first in first out basis.

XI RETIREMENT BENEFITS

Retirement benefits are dealt with in the following manner:

a) Provision for gratuity is made as and when an employee put in the qualifying period of service for entitlement of this benefit.

b) Liability on account of encashable leave salary is determined and such liability is provided in the accounts.

XII PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Contingent Liabilities, if material are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statements. A provision is recognized when an enterprise has a present obligation as a result of pass event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations in respect of which a reliable estimate can be made for the amount of obligation.


Mar 31, 2009

Basis of Preparation of the Financial Statement:

The financial Statements are prepared under the Historical Cost Convention on a Going Concern basis.

Revenue Recognition:

The Company generally follows the mercantile system of accounting and recognizes the income and expenditure on an accrual basis except those with significant uncertainties & complies with accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

Fixed Assets / Intangible Assets:

Fixed Assets are stated at cost of acquisition. For this purpose, cost includes cost of acquisition and all costs directly attributable to bringing the asset for its present use and condition, including borrowing cost of qualifying assets.

Depreciation:

Depreciation on Fixed Assets is not provided because of the depreciable assets not found in the company.

Taxation:

Provision for taxation provided in accordance with the income tax laws prevailing for the relevant assessment years.

Investments:

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

Contingent Liabilities

The liabilities of contingent in nature are not found, hence not provided in the Accounts.


Mar 31, 2008

1. The Accounts are prepared under the historical cost convention and on the basis of going concern. Expenses and Income are accounted on accrual basis.

2. Fixed assets: Fixed Assets are accounted for at the cost incurred at the time of acquisition.

3. Depreciation: There is no depreciable assets in the company hence depreciation not provided.

4. Amortization: preliminary expenses have been written off over period of 10 years.

 
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