Mar 31, 2015
I) ACCOUNTING CONCEPT:
a. These accounts are prepared on the historical cost convention and on
the accounting principle of a going concern.
b. Accounting policies not specifically referred to otherwise be
consistent and in consonance with generally accepted accounting
principle.
RECOGNITION OF INCOME AND EXPENDITURE
ii) Company accounts Incomes and Expenses on accrual basis in
accordance with the generally accepted accounting principles except
dividend which are accounted on cash basis.
USE OF ESTIMATES
The presentation 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 reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
FIXED ASSETS & DEPRECIATION
iv) The Gross Block of Fixed Assets is shown at historical cost, which
includes taxes and other identifiable direct Expenses, less impairment
loss. The cost of fixed assets includes the cost of acquisition
including freight, taxes, duties and other identifiable direct
expenses, except otherwise specifically excluded and expressed by way
of note, attributable to acquisition of assets up to the date the asset
put to use less the accumulated depreciation on it.
Depreciation is NOT provided on Written Down Value Method at the rates
and in the manner specified in Schedule XIV of the Companies Act, 1956.
The depreciation on addition / disposal is provided pro-rate basis.
v) SALES /TURNOVER
Sales are recognized, net of returns, on dispatch of goods to customers
the satisfaction of the customer and are reflected in the accounts at
net value.
INVESTMENT
vi) Investments are carried at cost. They are long-term investment. The
fall in value being temporary in nature, no provision is made for
diminution in value.
INVENTORY
vii) Inventories are valued on FIFO basis at lower of cost or market
price except cotton waste and scrap material, which are shown at Net
Realizable Value.
vii) TREATMENT OF RETIREMENT BENEFITS
1. Short Term Employee Benefits: The undiscounted amount of short term
employee benefits expected to be paid in exchange for the service
rendered by employee is recognized during the period when the employee
render the service.
2. Post Employee Benefits: Contribution to defined contribution scheme
such as provident fund etc. is charged to P&L Account as incurred.
viii) TAXATION
Tax liabilities of the company are estimated considering the provision
of the I.T. Act, 1961. The deferred tax Liability for timing
difference between the book and tax profit for the year is accounted
using the rates and Tax Laws that have been enacted or substantially
enacted at the balance sheet date. Deferred Tax assets arising from the
timing difference are recognized to the extent that there is reasonable
certainty that sufficient future taxable income will be available.
x) CONTINGENT LIABILITIES
Contingent liabilities are not provided for (unless otherwise stated)
and are disclosed by way of notes on account, if any.
Mar 31, 2014
I) ACCOUNTING CONCEPT:
a. These accounts are prepared on the historical cost convention and on
the accounting principle of a going concern.
b. Accounting policies not specifically referred to otherwise be
consistent and in consonance with generally accepted accounting
principle.
ii) RECOGNITION OF INCOME AND EXPENDITURE
Company accounts Incomes and Expenses on accrual basis in accordance
with the generally accepted accounting principles except dividend which
are accounted on cash basis.
iii) USE OF ESTIMATES
The presentation 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 reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
iv) FIXED ASSETS & DEPRECIATION
The Gross Block of Fixed Assets is shown at historical cost, which
includes taxes and other identifiable direct Expenses, less impairment
loss. The cost of fixed assets includes the cost of acquisition
including freight, taxes, duties and other identifiable direct
expenses, except otherwise specifically excluded and expressed by way
of note, attributable to acquisition of assets up to the date the asset
put to use less the accumulated depreciation on it.
Depreciation is provided on Written Down Value Method at the rates and
in the manner specified in Schedule XIV of the Companies Act, 1956. The
depreciation on addition / disposal is provided pro-rate basis.
v) SALES / TURNOVER
Sales are recognized, net of returns, on dispatch of goods to customers
the satisfaction of the customer and are reflected in the accounts at
net value.
vi) INVESTMENT
Investments are carried at cost. They are long-term investment. The
fall in value being temporary in nature, no provision is made for
diminution in value.
vii) INVENTORY
Inventories are valued on FIFO basis at lower of cost or market price
except cotton waste and scrap material, which are shown at Net
Realizable Value.
vii) TREATMENT OF RETIREMENT BENEFITS
1. Short Term Employee Benefits: The undiscounted amount of short term
employee benefits expected to be paid in exchange for the service
rendered by employee is recognized during the period when the employee
render the service.
2. Post Employee Benefits: Contribution to defined contribution scheme
such as provident fund etc. is charged to P&L Account as incurred.
viii) TAXATION
Tax liabilities of the company are estimated considering the provision
of the I.T. Act, 1961. The deferred tax Liability for timing difference
between the book and tax profit for the year is accounted using the
rates and Tax Laws that have been enacted or substantially enacted at
the balance sheet date. Deferred Tax assets arising from the timing
difference are recognized to the extent that there is reasonable
certainty that sufficient future taxable income will be available.
x) CONTINGENT LIABILITIES
Contingent liabilities are not provided for (unless otherwise stated)
and are disclosed by way of notes on account, if any.
Mar 31, 2013
I) ACCOUNTING CONCEPT:
a. These accounts are prepared on the historical cost convention and
on the accounting principle of a going concern.
b. Accounting policies not specifically referred to otherwise be
consistent and in consonance with generally accepted accounting
principle.
ii) RECOGNITION OF INCOME AND EXPENDITURE
Company accounts Incomes and Expenses on accrual basis in accordance
with the generally accepted accounting principles except dividend which
are accounted on cash basis.
iii) USE OF ESTIMATES
The presentation 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 reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
iv) FIXED ASSETS & DEPRECIATION
The Gross Block of Fixed Assets is shown at historical cost, which
includes taxes and other identifiable direct Expenses, less impairment
loss. The cost of fixed assets includes the cost of acquisition
including freight, taxes, duties and other identifiable direct
expenses, except otherwise specifically excluded and expressed by way
of note, attributable to acquisition of assets up to the date the asset
put to use less the accumulated depreciation on it.
Mar 31, 2011
A. Basis of accounting The financial statements have been prepared
under the historical cost convention and comply with the Accounting
Standards prescribed by the Institute of Chartered Accountants of India
and referred to in Section 211(3)(c) of the Companies Act, 1956.
b. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balance of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes, useful lives of fixed assets and intangible assets.
Contingencies are recorded when it is probable that a liability will be
incurred and the amount can be reasonably estimated. Actual results
could differ from such estimates.
c. Fixed Assets and Depreciation
i. Fixed assets should be stated at cost less accumulated depreciation.
Cost includes purchase price and all other attributable costs of
bringing the assets to working condition for intended use.
ii. Depreciation on all assets should be charged proportionately from
the date of acquisition/installation on written down value method at
rates prescribed in Schedule XIV of the Companies Act, 1956.
iii. Intangible assets should be stated at cost of acquisition less
accumulated amortization, other than Computer software, which is the
integral part of related hardware and has been treated as Fixed Assets,
is amortized over a period of three years on straight line basis, in
accordance with AS 26 issued by the Institute of Chartered Accountants
of India)
d. Revenue Recognition
When the outcome of a construction contract can be estimated reliably,
contract revenue and contract cost associated with the construction
contract should be recognized as revenue and expenses respectively by
reference to the stage of completion of the contract activity at the
reporting date.
The company at present has not recognized any revenue as work on the
construction contract has not yet started.
e. Foreign exchange transactions
Initial Recognition
Revenue and expenditure from transactions in foreign currency are
recorded at the average monthly exchange rate as on the date of the
respective transaction.
Monetary items denominated in foreign currency and outstanding at the
Balance Sheet date are translated at the exchange rate ruling on that
date.
Exchange Differences
Exchange differences arising on foreign currency transactions are
recognized as income or expense in the period in which they arise.
The company had made some investments in foreign currency during the
year under review. The exchange difference was recorded in the books as
discussed above.
f. Leases
i. Finance lease
The lower of the fair value of the assets and present value of the
minimum lease rentals is capitalized as fixed assets with corresponding
amount shown as lease liability. The principal components in the lease
rental are adjusted against the lease liability and the interest
components are charged to profit and loss account.
ii. Operating lease
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lesser, are recognized as
operating leases. Lease rents under operating leases are recognized as
an expense in the profit and loss account with reference to lease term.
g. Provision for Taxation
Income tax comprises of current tax and deferred tax. Deferred tax
assets and liabilities are recognized for the future tax consequences
of timing differences, subject to the consideration of prudence.
Deferred tax assets and liabilities are measured using the tax rates
enacted or substantively enacted by the Balance Sheet date.
Deferred Tax is measured based on the Tax rates & the Tax Laws enacted
or substantially enacted on the balance sheet date.
Deferred Tax Assets arising from timing differences are recognized only
to the extent there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. At each balance sheet date, the company re-assesses
unrecognized deferred tax assets. It recognizes unrecognized deferred
tax assets to the extent that it become reasonably certain or virtually
certain, as the case may be, that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
h. Impairment
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre- discount rate that reflects the
current market assessments of time value of money and the risks
specific to the asset.
Reversal of impairment loss is recognized immediately as income in the
profit and loss account.
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