Accounting Policies of GB Global Ltd. Company

Mar 31, 2024

NOTE 2: MATERIAL ACCOUNTING POLICIES

This Note provides a list of the Material Accounting Policies adopted by GB global Limited formerly Known as Mandhana
Industries Limited; in the preparation of the Financial Statements. These policies have been consistently applied to all the
years presented, unless otherwise stated.

A. STATEMENT OF COMPLIANCE

These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), and the provisions
of the Companies Act ,2013 (''the Act'') (to the extent notified). The Ind AS are prescribed under Section 133 of the Act
read with Rule-3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued
thereafter.

B. BASIS OF PREPARATION AND PRESENTATION

These financial statements have been prepared and presented under the historical cost convention, on the accrual
basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the
end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been
applied consistently over all the periods presented in these financial statements except where a newly issued
accounting standard is initially adopted or a revision to an existing accounting standard requires a charge in the
accounting policy in use.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure
purposes in these financial statements is determined on such a basis, except for share-based payment transactions
that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 116, and measurements
that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use
in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on
the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to
the fair value measurement in its entirety, which are described as follows:

â¢ Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;

â¢ Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and

â¢ Level 3 inputs are unobservable inputs for the asset

C. FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the financial statements of Company are measured using the currency of the primary economic
environment in which the Company operates ("the functional currency"). Indian rupee is the functional currency of
the Company.

The financial statements are presented in Indian Rupees which is the Company''s presentation in Indian Rupees has
been rounded up to the nearest lacs except where otherwise indicated.

D. CURRENT Vs. NON-CURRENT CLASSIFICATION

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

â¢ Expected to be realised or intended to be sold or consumed in normal operating cycle

â¢ Held primarily for the purpose of trading

â¢ Expected to be realised within twelve months after the reporting period, or

â¢ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

â¢ It is expected to be settled in normal operating cycle

â¢ It is held primarily for the purpose of trading

â¢ It is due to be settled within twelve months after the reporting period, or

â¢ There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash
equivalents. The Company has identified twelve months as its operating cycle.

E. USE OF ESTIMATE AND JUDGEMENTS

The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the
Company and are based on historical experience and various other assumptions and factors (including expectations
of future events) that the Company believes to be reasonable under the existing circumstances. Differences between
actual results and estimates are recognized in the period in which the results are known/materialized.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that
date but provide additional evidence about conditions existing as at the reporting date.

F. REVENUE RECOGNITION

Effective April 1, 2018, the Company adopted Ind AS 115 ''Revenue from Contracts with Customers''. First time
adoption has been conducted retrospectively with cumulative effect of initially applying this standard as on the
transition date. The effect on the transition to Ind AS 115 is insignificant.

Revenue is measured at the fair value of the consideration received or receivable. Amount disclosed as revenue are
net of returns, rebates, goods & services tax and value added taxes.

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the Company''s activities, as
described below.

The Company bases its estimate of return on historical results, taking into consideration the type of customer, the
type of transaction and the specifics of each arrangement.

â¢ Revenue recognised from major business activities:- Revenue from sale of goods is recognised as and when
the Company satisfies performance obligations by transferring control of the promised goods to its
customers.

â¢ Revenue from a contract to provide services is recognised by reference to the stage of completion of the
contract.

â¢ Export Incentives under various schemes are accounted in the year of export on accrual basis.

â¢ Dividend income from investments is recognised when the shareholder''s right to receive payment has
been established (provided that it is probable that the economic benefits will flow to the Company and
the amount of income can be measured reliably).

â¢ Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on
a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to that asset''s net carrying amount on initial recognition.

â¢ The Company''s policy for recognition of revenue from operating leases is described below in point no. T
"Lease"

â¢ Government grants are not recognised until there is reasonable assurance that the Company will comply with
the conditions attaching to them and that the grants will be received.

G. FOREIGN CURRENCY TRANSACTIONS
Initial Recognition:

On initial recognition, for monetary items transactions in foreign currencies entered into by the Company are
recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot
exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange
differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit
and Loss.

For Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the
exchange rates at the date of the transaction. In case of an asset, expense or income where a non-monetary advance
is paid/received, the date of transaction is the date on which the advance was initially recognised. If there were
multiple payments or receipts in advance, multiple dates of transactions are determined for each payment or receipt
of advance consideration.

Measurement of foreign currency items at reporting date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items
that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the
transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the
exchange rates at the date when the fair value is measured.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the
recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair
value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit
and Loss, respectively).

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current income tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as
reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.

Current income tax assets/liabilities for current year is recognized at the amount expected to be paid to and/or
recoverable from the tax authorities.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form
of adjustment to future income-tax liability, is considered as an asset if there is convincing evidence that the Company
will pay normal income-tax. Accordingly, MAT Credit is recognised as asset in the Balance Sheet when it is probable
that future economic benefit associated with it will flow to the Company.

Current and deferred tax for the year :-

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively.

The appendix addresses the accounting for income taxes when tax treatments involve uncertainty that affects the
application of Ind AS 12 Income Taxes. It does not apply to taxes or levies outside the scope of Ind AS 12, nor does it
specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The
Appendix specifically addresses the following:

Whether an entity considers uncertain tax treatments separately.

The assumptions an entity makes about the examination of tax treatments by taxation authorities.

How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
How an entity considers changes in facts and circumstances.

The Company determines whether to consider each uncertain tax treatment separately or together with one or more
other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty. The
Company applies significant judgement in n identifying uncertainties over income tax treatments.

Mar 31, 2016

A. BASIS OF ACCOUNTING

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, including the accounting standards notified under the relevant provisions of the Companies Act, 2013.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortization.

E. DEPRECIATION

Tangible Assets

a. Depreciation on fixed Assets is charged as follows :

i) Depreciation on Fixed assets is provided base on useful life of assets as prescribed by schedule II to the companies Act 2013 or reassessed based on management evaluation . In case of following assets useful life is different than those prescribed in schedule II to The Companies Act,2013.

The useful life of those assets are as follows

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

F. INVESTMENT

Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realizable whichever is lower.

b. Work in progress valued at cost. Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following FIFO Method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realizable value.

d. Sample fabric purchases, are charged to profit and loss account in the year of purchase.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Profit or loss on cancellations/renewals of forward contracts is recognized during the year.

I. EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognized fund.

b. Defined Benefit Plan:

Company''s Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in Profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/ schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

M. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax: Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

N. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit''s selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)

Mar 31, 2015

A. BASIS OF ACCOUNTING

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, including the accounting standards notified under the relevant provisions of the Companies Act, 2013.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortization.

E. DEPRECIATION

Tangible Assets

a. Depreciation on fixed Assets is charged as follows :

i) Depreciation on Fixed assets is provided base on useful life of assets as prescribed by schedule II to the companies Act 2013 or reassessed based on management evaluation . In case of following assets useful life is different than those prescribed in schedule II to The Companies Act,2013.

The useful life of those assets are as follows

F. INVESTMENT

Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realizable whichever is lower.

b. Work in progress valued at cost. Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following FIFO Method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realizable value.

d. Sample fabric purchases, are charged to profit and loss account in the year of purchase.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Profit or loss on cancellations/renewals of forward contracts is recognized during the year.

I. EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognized fund.

b. Defined Benefit Plan:

Company's Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in Profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

M. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

N. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit's selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life).

Mar 31, 2014

A. BASIS OF ACCOUNTING

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 211 (3C) and the other relevant provisions of the Companies Act, 1956.

All the 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 VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash equivalent the Company has ascertained its operating cycle to be less than 12 month.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialised.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10 % capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortization.

E. DEPRECIATION

a. Depreciation on fixed Assets is charged as follows :

i) Premium on leasehold land is amortised in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortised at the depreciation rate applicable to factory building under the Companies Act, 1956.

iii) Depreciation on Factory Buildings, Plant and Machinery, Electrical Installations, Vehicles, Computers, Furniture & Fixture and Equipment is provided on the straight Line method (S.L.M.) in accordance with the provisions of Section 205 (2)(b) of the Companies Act, 1956.

iv) Computer Software is amortised over a period of five years. Amortisation is done on straight line basis.

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

F. INVESTMENT

Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realisable whichever is lower. The cost of finished goods is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost. Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following specific identification method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realisable value.

d. Stores and Spares and sample fabric purchases, are charged to profit and loss account in the year of purchase.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Further, in case of other contracts with committed exchange rates, the underlying is accounted at the rate so committed. Profit or loss on cancellations/renewals of forward contracts is recognized during the year.

I. EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognised fund.

b. Defined Benefit Plan:

Company''s Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in Profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the Employee Gratuity Scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

L. GOVERNMENT GRANTS:

Grants in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFS) and capital subsidy on processing and garmenting machinery are accounted for when it is reasonably certain that ultimate collection will be made.

M. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

N. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the IT Act.

b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

0. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit''s selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)

Mar 31, 2013

A. BASIS OF ACCOUNTING

These fnancial statements have been prepared on an accrual basis and under historical cost convention and in compliance'' in all material aspects'' with the applicable accounting principles in India'' the applicable accounting standards notifed under section 211 (3C) and the other relevant provisions of the Companies Act'' 1956.

All the assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act'' 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash equivalent the Company has ascertained its operating cycle to be less than 12 month.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual'' as they are earned or incurred.

(ii) Sale of Goods is recognised on transfer of signifcant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost'' which includes duties and other identifable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10% capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalised up to the date of attainment of commercial production.

c. Proft/ Loss on the sale of fxed assets is accounted for in the Proft and Loss Account and credited/debited respectively to proft and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortisation.

E. DEPRECIATION

a. Depreciation on fxed Assets is charged as follows

i) Premium on leasehold land is amortised in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortised at the depreciation rate applicable to factory building under the Companies Act'' 1956.

iii) Depreciation on Factory Buildings'' Plant and Machinery'' Electrical Installations'' Vehicles'' Computers'' Furniture & Fixture and Equipment is provided on the straight Line method (S.L.M.) in accordance with the provisions of Section 205 (2)(b) of the Companies Act'' 1956.

iv) Computer Software is amortised over a period of fve years. Amortisation is done on straight line basis.

b. On additions to the fxed assets made during the year'' depreciation is provided on pro-rata basis'' with reference to the date of addition.

c. On deletion or sale of assets'' no depreciation is provided.

F. INVESTMENT

Investments are classifed into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognise a decline'' other than temporary in the value of Long-term Investments. However'' fxed income long term securities are stated at cost'' less amortisation of premium/discount and provision for diminution to recognise a decline'' other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realisable whichever is lower. The cost of fnished goods is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost .Cost comprises all cost of materials'' cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving'' shirting and fabric division is valued at cost following specifc identifcation method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged'' unserviceable and inert raw materials are valued at net realisable value.

d. Stores and Spares and sample fabric purchases'' are charged to proft and loss account in the year of purchase.

e. Stock of unsold fats is valued at cost.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the proft & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks'' the difference between the forward rate and exchange rate at the inception of the contract is recognised as income or expense over the life of the contract. Further'' the exchange differences arising on such contracts are recognised as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Further'' in case of other contracts with committed exchange rates'' the underlying is accounted at the rate so committed. Proft or loss on cancellations/renewals of forward contracts is recognised during the year.

I. EMPLOYEE BENEFITS:

a. Defned Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognised fund.

b. Defned Beneft Plan:

Company''s Liabilities towards defned beneft scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognised in proft & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fxed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognised as an expense in Proft & Loss accounts on accrual basis. Lease payments relating to project under development are capitalised to respective projects.

L. GOVERNMENT GRANTS:

Grants in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFS) and capital subsidy on processing and garmenting machinery are accounted for when it is reasonably certain that ultimate collection will be made.

M. PROVISION'' CONTINGENT LIABILITIES AND CONTINGENT ASSETS: Contingent Liabilities are not recognised'' but disclosed in the case of''

a) A present obligation arising from a past event'' when it is not probable that an outfow of resources will be required to settle the obligation.

b) A possible obligation'' when the probability of outfow of resources is reasonably certain.

Contingent Assets are neither recognised'' nor disclosed. Provisions'' Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

N. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April'' 2002'' the differences that result between the proft offered for income tax and the proft as per fnancial statements are identifed and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences'' namely the differences that originate in one accounting period and reverse in another'' based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period'' based on prevailing enacted regulations.

O. IMPAIRMENT OF ASSETS

As at each Balance Sheet date'' the carrying amount of assets is tested for impairment so as to determine''

a) The provision for impairment loss'' if any required or''

b) The reversal'' if any'' required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined''

a) In the case of an individual asset'' at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit'' (a group of assets that generates identifed independent cash fows)'' at the higher of the cash generating unit''s selling price and the value in use.

(Value in use is determined as the present value of estimated future cash fows from the continuing use of an asset and from its deposal at the end of its useful life)

Mar 31, 2012

A. BASIS OF ACCOUNTING

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 211 (3C) and the other relevant provisions of the Companies Act, 1956.

All the 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 VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash equivalent the Company has ascertained its operating cycle to be less than 12 month.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10 % capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/ debited respectively to profit and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortization.

E. DEPRECIATION

a. Depreciation on fixed Assets is charged as follows :

i) Premium on leasehold land is amortized in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortized at the depreciation rate applicable to factory building under the Companies Act, 1956.

iii) Depreciation on Factory Buildings, Plant and Machinery, Electrical Installations, Vehicles, Computers, Furniture & Fixture and Equipment is provided on the straight Line method (S.L.M.) in accordance with the provisions of Section 205 (2)(b) of the Companies Act, 1956.

iv) Computer Software is amortized over a period of five years. Amortization is done on straight line basis.

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

F. INVESTMENT

Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realizable whichever is lower. The cost of finished goods is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost .Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following specific identification method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis.

The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realizable value.

d. Stores and Spares and sample fabric purchases, are charged to profit and loss account in the year of purchase.

e. Stock of unsold flats is valued at cost.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/ liabilities on the reporting date. Further, in case of other contracts with committed exchange rates, the underlying is accounted at the rate so committed. Profit or loss on cancellations/renewals of forward contracts is recognized during the year.

I. EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognized fund.

b. Defined Benefit Plan:

Company's Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

L. GOVERNMENT GRANTS:

Grants in the nature of interest subsidy under the Technology Up gradation Fund Scheme (TUFS) and capital subsidy on processing and garmenting machinery are accounted for when it is reasonably certain that ultimate collection will be made.

M. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

N. INCOME TAX

a. Current Tax: Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax: Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April, 2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

O. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit's selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)

Mar 31, 2011

A. Basis Of Accounting

The financial statements are prepared as a going concern under historical cost convention on an accrual basis except, those with significant uncertainty and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles, reasonable estimates and assumptions and prudent commercial practices.

B. Fixed Assets

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10% capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalised up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to Profit and Loss Account.

C. INTANGIBLE ASSETS

a. Intangible Assets are stated at cost of acquisition less accumulated amortization. Computer

Software is amortised over a period of five years. Amortisation is done on straight line basis.

D. DEPRECIATION

a. Depreciation on Fixed Assets is charged as follows :

i) Premium on leasehold land is amortised in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortised at the depreciation rate applicable to factory building under the Companies Act, 1956.

ii) Dyeing, Weaving, Shirting, Garment & Export Divisions-on Straight Line Method.

iii) Fabric Division - on Written Down value Method.

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

E. BORROWING COST

Interest and other cost in connection with the borrowing of funds to the extent related/attributed to the acquisition /construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

F. INVESTMENTS

Long term investments are valued at cost. Any decline other than temporary, in the value of long term investments is adjusted in the carrying value of such investments.

Current Investment are carried at Cost or Fair Market Value whichever is lower.

G. INVENTORIES

a. Finished goods are valued at cost or market value whichever is lower. The cost of finished goods is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost .Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following specific identification method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realisable value.

d. Stores and Spares and sample fabric purchases, are charged to Profit and Profit account in the year of purchase.

e. Stock of unsold flats is valued at cost.

H. SALES AND PURCHASES

a. Sales include sale of raw materials, semi-finished goods and finished goods. Sales also include Processing charges, Garment Stitching charges, Sample charges, Duty Drawback received and Export entitlement received.

b. Value Added Tax (VAT) collected is shown as liability and netted off against VAT refund.

c. Sales and purchases are accounted net of cash discount, returns, rebate, etc.

d. Purchases also include custom duty paid on raw material imports.

e. Export sales are accounted on CIF value or FOB value basis depending on the terms of sale.

f. Export sales of samples are accounted on realisation basis.

g. Export Incentives like DEPB license or Duty Drawback available on exports are recognised on accrual basis in the year of exports.

I. EXPENSES

All material known liabilities are provided for on the basis of available information/estimates.

J. FOREIGN CURRENCY TRANSACTION

a. Export sales are recorded at the exchange rate prevailing on the date of the transaction. Purchases & other expenditure in foreign currencies is accounted at the exchange rate prevailing on the date the transactions are recorded in the books of the Company.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the Profit and Loss account.

c. Premium receivable / payable on forward contracts is shown as Current Assets / Liabilities. Premium income / expense is amortised over the period of contract and the unamortised premium is shown under Current Liabilities / Assets.

d. Paris office transactions are accounted at the exchange rate prevailing at the time of payment.

K. CAPITAL ISSUE EXPENSES

'Miscellaneous Expenditure' representing share issue expenses amounting to Rs. 8,20,77,682/- adjusted against the Securities Premium Account. (Previous Year Rs. 2,67,99,077/-)

L EMPLOYEE BENEFITS

a. Defined Contribution Plan

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognised fund.

b. Defined Benefit Plan

Company's Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognised in Profit and Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes.

All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

M. OPERATIONAL LEASE:

Operational lease payments are recognised as an expense in Profit and Loss accounts on accrual basis. Lease payments relating to project under development are capitalised to respective projects.

N. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the IT Act.

b. Deferred Tax : Consequent to the Accounting Standard 22-Accounting for Taxes on Income becoming mandatory effective from 1st April, 2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter

a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

O. GOVERNMENT GRANTS

Grants in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFS) and capital subsidy on processing and garmenting machinery are accounted for when it is reasonably certain that ultimate collection will be made.

P. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognised in previous periods. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit's selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)

Q. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Contingent Liabilities are not recognised, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

Mar 31, 2010

A. BASIS OF ACCOUNTING

The financial statements are prepared as a going concern under historical cost convention on an accrual basis except, those with significant uncertainty and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles, reasonable estimates and assumptions and prudent commercial practices.

B. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10 % capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

C. INTANGIBLE ASSETS

a. Intangible Assets are stated at cost of acquisition less accumulated amortization. Computer Software is amortised over a period of five years. Amortisation is done on straight line basis.

D. DEPRECIATION

a. Depreciation on fixed Assets is charged as follows :

i) Premium on leasehold land is amortised in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortised at the depreciation rate applicable to factory building under the Companies Act, 1956.

ii) Dyeing, Weaving, Shirting, Garment & Export Divisions - on Straight Line Method.

iii) Fabric Division - on Written Down value Method.

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

E. BORROWING COST

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

F. INVESTMENTS

Long term investments are valued at cost. Any decline other than temporary, in the value of long term investments is adjusted in the carrying value of such investments.

G. INVENTORIES

a. Finished goods (other than finished fabrics) are valued at cost or market value which ever is lower. The cost of finished fabrics is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost .Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following specific identification method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realisable value.

d. Stores and Spares and sample fabric purchases, are charged to profit and loss account in the year of purchase.

e. Stock of unsold flats is valued at cost. H. SALES AND PURCHASES

a. Sales include sale of raw materials, semi-finished goods and finished goods. Sales also include Processing charges, Garment Stitching charges, Sample charges and Duty Drawback received.

b. Value Added Tax (VAT) collected is shown as liability and netted off against VAT refund.

c. Sales and purchases are accounted net of cash discount, returns, rebate, etc.

d. Purchases also include custom duty paid on raw material imports.

e. Export sales are accounted on CIF value or FOB value basis depending on the terms of sale.

f. Export sales of samples are accounted on realisation basis.

g. Export Incentives like DEPB license or Duty Drawback available on exports are recognised on accrual basis in the year of exports.

I. EXPENSES

All material known liabilities are provided for on the basis of available information/ estimates.

J. FOREIGN CURRENCY TRANSACTION

a. Export soles are recorded at the exchange rate prevailing on the date of the transaction. Purchases & other expenditure in foreign currencies is accounted at the exchange rate prevailing on the date the transactions are recorded in the books of the company.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. Premium receivable / payable on forward contracts is shown as Current Assets / Liabilities. Premium income / expense is amortised over the period of contract and the unamortised premium is shown under Current Liabilities / Assets.

d. Paris office transactions are accounted at the exchange rate prevailing at the time of payment.

K. CAPITAL ISSUE EXPENSES

Miscellaneous Expenditure representing share issue expenses amounting to Rs. 2,67,99,077/- adjusted against the Securities Premium Account.

L. EMPLOYEE BENEFITS:

a. Defined Contribution Plan

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognised fund.

b. Defined Benefit Plan

The Company has Defined Benefit Plan for gratuity for all the employees, the liability for which is determined on the basis of

an actuarial valuation at the year end and incremental liability, if any, is provided for in the books. Gratuity scheme is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes.

M. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

N. INCOME TAX

a. Current Tax: Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax ÃÂ¦. Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

0. GOVERNMENT GRANTS

Grants in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFS) and capital subsidy on processing machinery are accounted for when it is reasonably certain that ultimate collection will be made.

R IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating units selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)

Q. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

Mar 31, 2009

A. BASIS OF ACCOUNTING

The financial statements are prepared as a going concern under historical cost convention on an accrual basis except, those with significant uncertainty and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles, reasonable estimates and assumptions and prudent commercial practices.

B. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which, includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes and 10 % capital subsidy granted by the Central Government on processing and garmenting machinery.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/Loss On the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

C. INTANGIBLE ASSETS

a. Intangible Assets are stated at cost of acquisition less accumulated amortization. Computer Software is amortised over a period of five years. Amortisation is done on straight line basis.

D. DEPRECIATION

a. Depreciation on fixed Assets is charged as follows :

i) Premium on leasehold land is amortised in equal installments over the period of the lease.

ii) Capital expenditure on rented premises is amortised at the depreciation rate applicable to factory building under the Companies Act, 1956.

ii) Dyeing, Weaving, Shirting, Garment & Export Divisions - on Straight Line Method.

iii) Fabric Division - on Written Down value Method.

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

E. BORROWING COST

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowings cost are to revenue.

F. INVESTMENTS

Long term investments are valued at cost. Any decline other than temporary, in the value of long term investments is adjusted in the carrying value of such investments.

G. INVENTORIES

a. Finished goods (other than finished fabrics) are valued at cost or market value which ever is lower. The cost of finished fabrics is arrived after deducting estimated margin from the selling price of the goods.

b. Work in progress valued at cost .Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following specific identification method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realisable value.

d. Stores and Spares and sample fabric purchases, are charged to profit and loss account in. the year of purchase.

m Stoolt of unsold flats is valued at cost_

H. SALES AND PURCHASES

a. Sales include sale of raw materials, semi-finished goods and finished goods. Sales also include Processing charges, Garment Stitching charges, Sample charges and Duty Drawback received.

b. Value Added Tax (VAT) collected is shown as liability and netted off against VAT refund.

c. Sales and purchases are accounted net of cash discount, returns, rebate, etc.

d. Purchases also include custom duty paid on raw material imports.

e. Export sales are accounted on CIF value or FOB value basis depending on the terms of sale.

f. Export sales of samples are accounted on realisation basis.

g. Export Incentives like DEPB license or Duty Drawback available on exports are recognised on accrual basis in the year of exports.

I. EXPENSES

All material known liabilities are provided for on the basis of available information/ estimates.

J. FOREIGN CURRENCY TRANSACTION

a. Export sales are recorded at the exchange rate.prevailing on the date of the transaction. Purchases & other expenditure in foreign currencies is accounted at the exchange rate prevailing on the date the transactions are recorded in the books of the company.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. Premium receivable / payable on forward contracts is shown as Current Assets / Liabilities. Premium income / expense is amortised over the period of contract and the unamortised premium is shown under Current Liabilities / Assets.

d. Paris office transactions are accounted at the exchange rate prevailing at the time of payment.

K. EMPLOYEE BENEFITS:

a. Defined Contribution Plan

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognised fund.

b. Defined Benefit Plan

The Company has Defined Benefit Plan for gratuity for all the employees, the liability for which is determined on the basis of an actuarial valuation at the year end and incremental liability, if any, is provided for in the books. Gratuity scheme is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes.

L. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects. .

M. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided, for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

N. GOVERNMENT GRANTS

Grants in the nature of interest subsidy under the Technology Upgradation Fund Scheme (TUFS) and capital subsidy on processing machinery are accounted for when it is reasonably certain that ultimate collection will be made.

0. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating units selling price and the value in use. (Value in use is determined as the present value of estimated future cash the continuing use of an asset and from its deposal at the end of its useful life)

P. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article