1. GENERAL INFORMATION
Active Clothing Co. Limited ( the Company ) is a Public Company, which
was incorporated under the provisions of the Companies Act, 1956 on
27.02.2002 and has its registered office at E-225, PHASE-VIII-B, MOHALI. The
Company is engaged in manufacturing and trade of apparels. The
Company is listed on Bombay Stock Exchange.
The financial statements were approved for issue in accordance with a
resolution of the directors on May 30, 2025.
2. SIGNIFICANT ACCOUNTING POLICES, SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND ASSUMPTIONS AND APPLICABILITY OF NEW AND
REVISED IND AS
2.1 Statement of Compliance
These financial statements have been prepared on a going concern basis
following the accrual basis of accounting in accordance with the Generally
accepted Accounting Principles (GAAP) in India (Indian Accounting
Standards referred to as “IndAS”) as specified under the section 133 of the
Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting
Standard) Rules, 2015 and relevant amendments rules issued thereafter.
These financial statements are the Company’s first Ind AS financial
statements and are covered by Ind AS 101, First time adoption of Indian
Accounting Standards (Ind AS 101). The transition to Ind AS has been
carried out from the accounting principles generally accepted in India
(“Indian GAAP”) which is considered as the “Previous GAAP” for the purpose
of Ind AS 101. Under previous GAAP financial statements were prepared in
accordance with the Accounting Standards notified under section 133 of
the Act read together with paragraph 7 of the Companies (Accounts) Rules
2014 (“Indian GAAP”) and other relevant provisions of the Act as applicable.
2.2. Basis of preparation and presentation
The financial statements have been prepared on the historical cost basis
except for certain financial instruments that are measured at fair value at
the end of each reporting period, as explained in the accounting policies
below. 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. Preparation of
the standalone financial statements requires the use of certain critical
accounting judgments, estimates and assumptions. It also requires the
management to exercise judgment in the process of applying the
Company’s accounting policies. The areas involving a higher degree of
judgment of complexity, or areas where assumptions and estimates are
significant to the standalone financial statements.
The financial statements are presented in Indian Rupees in Lacs, the national
currency of India which the Company has selected as its functional
currency.
CASH FLOW STATEMENT
Cash flow statement is prepared segregating the cash flows from operating,
investing and financing activities. Cash Flow from operating activities is
reported using indirect method as set out in Indian Accounting Standard
(INDAS)-7 “Statement of Cash Flows”.
a) Transactions of a non -cash nature
b) Any deferrals or accruals of past or future operating cash receipts or
payment and
Items of income or expense associated with investing or financing cash
flows
Cash and cash equivalents comprise cash at bank and in hand and
demand deposits with banks and are reflected as such in the cash flow
statement. Cash equivalents are short term balances ( with an original
maturity of three months or less from the date of acquisition ), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
2.3 Property, Plant and equipments (PPE)
Land and buildings held for use in the production or supply of goods or
services, or for administrative purposes, are stated in the balance sheet at
cost less accumulated depreciation and accumulated impairment losses.
Land is not depreciated.
The Cost of an item of Property, plant and equipment comprises:
a. Its purchase price including import duties and non-refundable
purchase taxes after deducting trade discount and rebates.
b. Any attributable expenditure directly attributable for bringing an asset
to the location and the working condition for its intended use and
c. the initial estimate of the costs of dismantling and removing the item
and restoring the site on which it is located, the obligation for which an
entity incurs either when the item is acquired or as a consequence of
having used the item during a particular period for purpose other than
to produce inventories during that period.
The Company has elected to continue with the carrying value of all its PPE
recognized as on April 1, 2015 measured as per the previous GAAP and
use that carrying value as its deemed cost as on transition date.
Depreciation is provided on Written down value Method on the basis of
useful lives of such assets specified in Schedule-ll to the Companies Act,
2013.
The estimated useful life of the assets have been assessed based on
technical advice, taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset, past
history of replacement, anticipated technological changes,
manufactures warranties and maintenance support etc and are as under:
Building 30-60 Years
Plant & equipment 15 Years
Furniture and Fixtures & Office Equipment 10 Years
Vehicles 8Years
Computer and Others 3-5 Years
Advances paid towards the acquisition of property, plant and equipment
outstanding at each balance sheet date is classified as capital advances
under other non-current assets and the cost of assets not put to use
before such date are disclosed under ‘Capital work-in-progress’.
Subsequent expenditures relating to property, plant and equipment is
capitalized only when it is probable that future economic benefits
associated with these will flow to the Company and the cost of the item
can be measured reliably. Repairs and maintenance costs are
recognized in net profit in the statement of profit and loss when incurred.
The cost and related accumulated depreciation are eliminated from the
financial statements upon sale or retirement of the asset and the resultant
gains or losses are recognized in the statement of profit & loss. Assets to be
disposed off are reported at the lower of the carrying value or the fair
value less cost to sell.
Depreciation is recognized so as to write off the cost of assets (other than
freehold land and properties under construction ) less their residual values
over their useful lives, using the Written down value method. The
estimated useful lives, residual value and depreciation method are
reviewed at the end of each reporting period, with the effect of any
changes in estimate for on a prospective basis.
For items produced during testing/ trail phase, clarification added that
revenue generated out of the same shall not be recognized in Statement
of Profit and Loss and considered as part of cost of PPE in line with
amended Ind AS 16.
2.4. Intangible assets
There are no intangible assets.
Current and non-current Classification
Ind AS requires that an entity shall present current and non-current assets,
and current and non-current liabilities, as separate classification in its balance
sheet.
Any asset or liability is classified as current of it satisfies any of the following
conditions:
a) it is expected to be realized or settled or is intended for sale or
consumption in the Company’s normal operating cycle which is
ascertained by the Company as 12 month;
b) It is expected to be realized or settled within twelve months from the
reporting date.
c) In the case of an asset.
• it is held primarily for the purpose of providing services; or
• it is cash equivalent unless it is restricted from being exchange or used;
to settle a liability for at least twelve months after the reporting date;
d) in the case of a liability, the company does not have an unconditional
right to defer settlement of liability for at least twelve month from the
reporting date.
All other assets and liabilities are classified as non-current.
2.5 Financial Instruments
Financial assets include cash and cash equivalents, trade receivables,
employees and other advances and eligible current and non current
assets.
Subsequent to initial recognition, financial assets are measured as
described below:
Trade Receivables
Trade receivables that do not contain a significant financing component
are initially recognized at transaction price. They are subsequently
measured at amortised cost less any Impairment losses. Due to their short
term maturity, the carrying amount approximate fair value.
2.6 Other Financial Assets
Other financial assets, cash and cash equivalents and other assets. They
are presented and current assets, expect for those maturing later that 12
months after the reporting date which are presented as non current
assets.
2.7 Inventories
Inventories are valued at cost or net realizable value, whichever is lower.
The cost in respect of the various items of inventory is computed as under:
In case of raw material at cost plus direct expenses. The cost includes cost
of purchase and other costs incurred in bringing the inventories to their
present location and condition.
In case of stores and spares at cost plus direct expenses. The cost
includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition.
In case of work in progress at raw material cost plus conversion costs
depending upon the stage of completion.
In case of finished goods at raw material cost plus conversion costs,
packing cost, non recoverable indirect taxes ( if applicable) and other
overheads incurred to bring the goods to their present location and
condition.
In case of by-products at estimated realizable value.
Net realizable value is the estimated selling price in ordinary course of
business, less estimated costs of completion and the estimated costs
necessary to make the sale.
Financial Liabilities
Financial liabilities include long and short term borrowings, bank
overdrafts, trade payables, eligible current and non current liabilities.
Trade Payable
Trade Payable, which consist of Trade Creditors, other current liabilities
and borrowings are recognized initially at fair value.
Cash & Cash Equivalents
Cash & Cash equivalents comprise of cash on hand , cash at banks, short
term deposits and short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
2.7. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessary take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted
from the borrowing costs eligible for capitalization.
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