PROVISIONS, CONTINGENT LIABILITY & CONTINGENT ASSETS
(A) Provisions involving substantial degree of estimation in measurement, are recognized when the present obligation of or past events gives rise to a probable outflow embodying economic benefits on settlement and the amount of obligation can be reliably estimated.
(B) Contingent liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved.
(C) Contingent assets are neither recognized nor disclosed in financial statements.
(D) Provisions and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
*We have already completed the Export obligation but we are still awaiting redemption certificate from Govt. Authorities.
11. PRELIMINARY EXPENSES
Preliminary Expenses are written off over a period of 5 years in equal proportion from the date of commencement of commercial activity.
12. EVENTS OCCURRING AFTER BALANCE SHEET DATE
No significant events which could affect the financial position as on 31.03.2023 to a material extent have been reported by the Assesse, after the balance sheet date till the signing of report.
13. PRIOR PERIOD AND EXTRAORDINARY ITEMS
There are no material changes or credits which arise in the current period on accounts of errors and omission in the preparation of the financial statements for the one or more period.
14. BORROWING COST
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other cost is recognized as expenses in the year in which they are incurred.
15. EMPLOYEE BENEFIT EXPENSES
A) Defined Contribution Plan: The Company makes defined contribution to provided fund which are accounted on accrual basis.
B) Defined Benefit Plan: The company’s Liability on account of Gratuity of employee is determine at the end of each financial year on the basis of actuarial valuation certificate obtained from Registered Actuary in accordance with the measurement procedure as per revised accounting standard (AS) - 15 “Employee Benefit”. The liability is funded on year to year basis by contribution to respective fund. The cost of providing benefit under this plan also determine on the basis of actuarial valuation at each year end.
16. CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
17. IMPAIRMENT OF FIXED ASSETS
Impairment of assets is being measured on factors giving rise to any indication of impairment, by comparing the recoverable amount, higher of value in use and net selling price of an asset, with carrying amount of an asset as per the Accounting Standard 28 “Impairment of Assets” issued by ICAI.
18. FOREIGN EXCHANGE TRANSACTION /TRANSLATION
A) Foreign currency transactions arising during the year are recorded at the exchange rates prevailing on the dates of transactions.
B) Any income or expense on account of exchange difference either on settlement or on translation is recognized
in the Statement of Profit and Loss.
C) All foreign exchange assets/Liabilities on the closing day are converted at closing exchange rate.
D) Exchange loss on outstanding derivatives transaction are computed on mark to market basis on the closing date and accounted for as expenses of period. However gain is not recognized as income of the period, following conservative approach.
19. CASH AND CASH EQUIVALENTS
Cash and Cash equivalents for the purpose of cash flow statement comprise cash at bank, Cash in hand, Cheque in hand and other permissible instruments as per AS 3.
20. SEGMENT REPORTING
The dominant source of income of the company is from the manufacturing of fabric of various qualities which do not materially differ in respect of risk perception and the return realized/to be realized. Even the geographical environment in which the company operates does not materially differ considering the political and economic environment, the type of customers, assets employed and the risk and return associated in respect of each of the geographical area. So, the disclosure requirements pursuant to AS17 -Segment Reporting issued by the ICAI are not applicable to the company
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