A. Corporate Information:
N R VANDANA TEX INDUSTRIES LIMITED (the Company) is a Public Limited
Company (CIN - U17299WB1992PLC055341) incorporated under the provision of the
Companies Act, 1956 having its registered office at 220, M.G. Road ,Kolkata -700007 ,
West Bengal India . The company is a Manufacturing Company engaged in
manufacturing and trading of textile goods under the Brand Name - "Vandana"
B. BASIS OF PREPARATION OF FINANCIAL STATEMENT:
(i) The financial statements have been prepared in accordance with Historical Cost
convention on Going Concern Concept and on accrual basis except Rates and Taxes,
Insurance claims & Dividend.
(ii) The Company has prepared these financial statements to comply in all material
respects with the Accounting Standards as prescribed by the Companies
(Accounting Standards) Rules 2006, the provisions of the Companies Act, 2013 and
the Companies Act, 1956 (to the extent applicable);
(iii) The financial statements are presented in accordance with generally accepted
accounting principles in India. All the assets & liabilities have been classified as
current or non current as per Company's normal operating cycle and other criteria
set out in revised Schedule III to Companies Act, 2013. Based on the nature of the
product and the time between Revised Acquisition of the assets for processing and
their realization in cash and cash equivalent, the Company has ascertained its
operating cycle as 12 months for the purpose of current, non- current classification
of assets and liabilities. The reporting currency of the Company is the Indian Rupee.
C. Current and Non-Current classification
All assets and liabilities are classified into current and non-current generally based on
the criteria of realisation/ settlement within a twelve month period from the balance
sheet date. An asset is treated as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating
cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• 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:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• 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
realisation in cash and cash equivalents. The Company has identified twelve months as
its operating cycle.
D. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the
management to make judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities on the date of the
financial statements and reported amounts of revenues and expenses for the year.
Accounting estimates could change from period to period. Actual results could differ
from those estimates. Appropriate changes in estimates are made as Management
becomes aware of changes in circumstances surrounding the estimates. Changes in
estimates are reflected in the financial statements in the period in which changes are
made and if material, their effects are disclosed in the notes to the financial statements.
E. Property, Plant & Equipment:
Property, Plant & Equipment represent a significant proportion of the assets of the
Company. Property, Plant & Equipment are stated at their original cost less accumulated
depreciation/amortization. The Cost includes the purchase cost including import duties
and non-refundable taxes and any directly attributable costs of bringing a Property,
Plant & Equipment to the Location and Conditions of its intended use. Cost comprises of
expenditure incurred in respect of the asset under development and includes any
attributable/allowable cost and other incidental expenses.
F. Depreciation:
All fixed assets, are depreciated on WDV Method. Depreciation is provided based on
useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
Depreciation on additions to / deletions from fixed assets made during the period is
provided on pro-rata basis from / up to the date of such addition / deletion as the case
may be. In respect of an assets for which impairment loss is recognized, depreciation is
provided on the revised carrying amount of the assets over its remaining useful life. The
amortization period and the amortization method are reviewed at each reporting date. If
the expected useful life of the asset is significantly different from previous estimates, the
amortisation method is changed accordingly.
G. GOVERNMENT GRANT:
Grants of capital nature and related to specific Fixed Assets are deducted from gross
value of assets. Other grants of capital nature are credited to Capital Reserve. Grants
related to revenue are recognized in the statement of profit and loss on a systematic basis
to match them with related costs.
H. EMPLOYEE BENEFIT:
(i) Contributions to Provident Fund are accounted for on accrual basis.
(ii) Liability in respect of Gratuity is being provided on accrual basis.
(iii) Liability in respect to Leave encasement is being provided on cash basis.
I. FOREIGN CURRENCY TRANSACTION
Transactions in foreign currency are accounted for at the exchange rates prevailing on
the date of transaction. Monetary assets and liabilities related to foreign currency
transaction remaining unsettled at the end of the year are translated at year end
exchange rates Gains/Losses arising out of fluctuation in the exchange rates are
recognized in statement of Profit and Loss in the period in which they arise.
J. INVENTORIES:
As per AS-2, The inventories are physically verified at regular intervals by the
management. Raw materials and packing materials are valued at the lower of cost and
net realizable value. Finished goods, Stock-in-Trade and Work-in-Progress are valued at
lower of cost and net realizable value. Cost of inventories comprises of cost of purchase,
cost of conversion and other costs including manufacturing overheads net of recoverable
taxes.
K. REVENUE RECOGNITION:
Sales revenue is recognized when property in the goods with all significant risk and
rewards as well as the effective control of goods usually associated with ownership are
transferred to the buyer. Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be reliably measured.
Revenue is recognized when it is earned and no significant uncertainty exists as to its
realization or collection. Revenue from sale of goods or services are recognized on
delivery of the products or services, when all significant contractual obligations have
been satisfied, the property in the goods is transferred for price, significant risk and
rewards of ownership are transferred to the customers and no effective ownership is
retained. In the financial statement, revenue from operation does not include Indirect
taxes like Goods & Service Tax.
L. INVESTMENT:
Investment is treated as Non-Current assets & stated at cost. Provision for diminution in
the value of long-term investment is made only if such a decline is other than temporary
nature in the opinion of the management.
M. BORROWING COST:
Borrowing costs relating to the acquisition / construction of qualifying assets are
capitalized when all substantial activities necessary to prepare the qualifying assets for
their intended use are complete. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other costs related to
borrowings are recognised as expense in the period in which they are incurred.
N. TAXATION:
Tax expense comprises current and deferred tax. Tax on income for the current period is
determined on the basis of taxable income and tax computed in accordance with the
provisions of the Income tax is determined in accordance with the provisions of the
Income Tax Act, 1961 and based on expected outcome of assesment/ appeals. Current
income-tax is measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the
respective tax jurisdictions where the Company operates. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the
reporting date.
Deferred income taxes reflect the impact of timing differences between taxable income
and accounting income originating during the current year and reversal of timing
differences for the earlier years. Deferred tax is measured using the tax rates and the tax
laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax
assets are recognized for deductible timing differences only to the extent that there is
reasonable certainty that sufficient future taxable income will be available against which
such deferred tax assets can be realized.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right
exists to set-off current tax assets against current tax liabilities and the deferred tax assets
and deferred taxes relate to the same taxable entity and the same taxation authority.
O. Earnings Per Share:
In determining the Earnings Per share, the company considers the net profit after tax
including any post tax effect of any extraordinary / exceptional item. The number of
shares used in computing basic earnings per share is the weighted average number of
shares outstanding during the period. The number of shares used in computing Diluted
earnings per share comprises the weighted average number of shares considered for
computing Basic Earnings per share and also the weighted number of equity shares that
would have been issued on conversion of all potentially dilutive shares.
P. Impairment of Assets:
As at each Balance Sheet date, the carrying amount of assets are assessed for any
indication of impairment, so as to determine the provision for impairment loss, if any,
required or the reversal, if any, required of impairment loss recognized in previous
periods. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of impairment. Impairment loss is recognized when the
carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss
is recognised as income in the statement of profit and loss.
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