Accounting Policies of Jinaams Dress Ltd. Company

Mar 31, 2018

A) CORPORATE INFORMATION:

JINAAM’S DRESS LTD (the company) is a limited company and has one unit named “Vidhata Textiles”, both domiciled in India and incorporated under the Companies Act, 1956. The company belongs to reputed industrial group in Surat. The core business of the company is manufacturing (through outsiders) and trading of Dyed - Printed and Un-Stitched dress materials / fabrics.

B) Significant Accounting Policies:

1) Basis of Preparation of Financial Statements: The Financial Statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The preparation of financial statements in conformity with accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting period.

2) Use of Estimates: The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3) Tangible Assets:

i) Fixed Assets are stated at cost of acquisition inclusive of freight, duties and taxes and all other attributable costs to bring the assets ready to use. Interest overhead up to date of asset put to use has been capitalized in respective assets purchased out of funds specifically borrowed for it.

ii) Cenvat Credit claims on purchase of fixed assets or other credit if any is reduced from the cost of respective asset in the year in which such claims are confirmed by the authority.

4) Depreciation on Tangible Assets / Intangible Assets:

Depreciation on tangible assets is provided on the straight line method over the useful lives of assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight line basis. The useful lives of the individual assets have been taken in view of the lives prescribed under part c of Schedule II of the companies Act, 2013.

5) Investments: there is no investment.

6) Cash Flow statement :

(i) Cash Comprises cash on hand and demand deposits with banks. Cash Equivalents are short term(within original maturity of 3 months or Less), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant of risk of changes in value.

(ii) Cash Flows are reported using the Indirect Method, whereby profit/ (loss) before extra ordinary items and cash is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipt or payments. The cash flows from operating, Investing and financing activities of the company are segregated based on the available information.

7) Foreign Currency Transaction:

i) Transactions denominated in foreign currencies are accounted for at exchange rates prevailing on the date of transactions. The resulting exchanges difference, if any, except on account of Fixed Assets is charged to the revenue account.

ii) Foreign currency assets/liabilities as on balance sheet date are stated at exchange rate prevailing on the date of the balance sheet.

8) Inventories: Inventories as at the end of the year are valued as below.

Raw Material : At Cost

Finished Goods & WIP : At Cost or Net Realisable Value whichever is less

9) Sales: Sales are inclusive all Taxes if any.

10) Purchases: Purchases (including sales return) are stated inclusive of taxes if any, which are confirmed by the respective authority and inclusive of, landed cost.

11) Borrowings Cost: The Interest on Working Capital Management and for Long Term Finance (Capital Assets) is charged against the profit for the year in which it is accrued. Interest on borrowing for capital assets, if any, is capitalised till the date of commencement of commercial use of the asset.

12) Earning Per Share: EPS is computed by dividing profit/(Loss) after tax by the weighted number of equity share outstanding during the year.

13) Taxes on Income: Income tax expense is accrued in accordance with AS 22 -’Accounting for taxes on Income” which includes current taxes and deferred taxes. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Impact of unrecognised past deferred taxes due to differences between past taxable income and past accounting income has been reflected and charged to brought forward balance of Profit & Loss Accounts. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available.