a. Basis of accounting
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company
has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the
Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017.
These financial statements have been prepared in accordance with Ind AS as notified under
the Companies (Indian Accounting Standards) Rule, 2015 read with Section 133 of the
Companies Act, 2013.
b. Use of estimates
The presentation of Financial Statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses
and disclosure of contingent liabilities. The estimates and assumption used in the
accompanying Financial Statements are based upon management's evaluation of the
relevant facts and circumstances as of the date of the financial statement. Actual results
may differ from the estimates and assumptions used in preparing the accompanying
Financial statements.
c. Basis of preparation
These financial statements have been prepared on the historical cost basis, except for
certain financial instruments which are measured at fair values 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.
d. Property, plant & equipment
Property, Plant and Equipments are stated at cost of acquisition, including any attributable
cost for bringing the asset to its working condition for its intended use, less accumulated
depreciation and impairment loss except plant & machinery, which have revalued, are
stated at revalued figure.
Intangible assets purchased are measured at cost or fair value as of the date of acquisition,
as applicable, less accumulated amortization and accumulated impairment, if any.
e. Depreciation
Depreciation is provided on the Straight-Line Method at the manner prescribed under
schedule II of the companies Act, 2013.
f. Inventories
Inventories of Fabrics is valued at Lower of cost and market value
g. Investment
i) Non-current investment is carried at fair value through OCI.
ii) Current investment is carried at fair value through OCI.
h. Revenue recognition
i) The revenue is recognized as and when goods are dispatched to the party, in case of
sale of services on completion of Job and in case of sale of trading, on raising of
invoice and transfer of material to the party.
ii) Other income is recognized on accrual basis.
i. Retirement benefits
PF and other retirement benefits are not applicable to the Company.
Gratuity is accounted for as per Ind AS-19 issued by the Institute of Chartered Accountants
of India, on the basis of actuarial valuation.
j. Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of
transaction. Gains & Losses arising out of subsequent fluctuations are accounted for on actual
payment or realization. Current assets & liabilities denominated in foreign currency as at the
Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange
differences are recognized in the Profit & Loss Account.
k. Taxes on income
Current tax is determined as the amount of tax payable in respect of estimated taxable income
for the year. Deferred tax is recognized subject to the consideration of prudence, on timing
deference, being the difference between taxable income & accounting income that originate
in one period and are capable of reversal in one or more subsequent periods.
l. Financial assets and liabilities
Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial assets or financial liability.
m. Borrowing cost
Borrowing cost incurred in relation to the acquisition, construction of asset is capitalized as
the part of the cost of such assets up to the date when such assets are ready for intended use.
Other borrowing costs are charged as expenses in the year in which these are incurred.
n. Impairment of assets
Impairment loss is provided to the extent the carrying amounts of assets exceed their
recoverable amount. Recoverable amount is the higher of an assets net selling price and its
value in use. Value in use is the present value of estimated future cash flows expected to arise
from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arms length transaction between
knowledgeable, willing parties, less the costs of disposal.
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