NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (i) BASIS OF brPARATION OF FINANCIAL STATEMENTS The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. The brparation of financial statements requires the management to make estimates and assumptions in the reported amounts of assets and liabilities (including contingent liabilities) as at the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. (ii) INVENTORIES The raw material & components, stores, packing materials and work-in-progress are valued at cost and finished goods are valued at lower of cost or net realizable value on "First in First out" basis. Excise and Custom Duties payable in respect of finished goods/imported material held in bond are provided for and consequently include cost of conversion and other cost incurred in bringing the inventories to their brsent location and conditions. Obsolete unserviceable and slow moving inventories are duly recognized and provided. (iii) CASH FLOW STATEMENT Cash flows are reported using the indirect method, whereby profit before tax is adjusted for effects of transactions of a non-cash nature, any deferrals 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. (iv) EVENTS OCCURRING AFTER THE DATE OF BALANCE SHEET Events occurring after the date of the Balance Sheet, wherever material, are considered up to the date of approval of accounts by the Board of Directors. (v) FIXED ASSETS, DEbrCIATION AND IMPAIRMENT LOSS Fixed Assets are stated at cost net of modvat/cenvat. The cost includes all br-operative expenses and the financing cost of borrowed fund relating to the construction period in the case of new projects. Debrciation has been provided on Useful life basis as brscribed in Schedule II of the Companies Act 2013. The carrying amounts of the fixed assets are reviewed at each Balance Sheet date to assess whether they are recorded in excess of their recoverable amounts. In case the recoverable amount of the Fixed Assets is lower than its carrying amount a provision is made for the Impairment loss. (vi) RECOGNITION OF INCOME AND EXPENDITURE: a) All income and expenditure are accounted on accrual basis. b) INCOME FROM SALES: Revenue is recognized when significant risks and rewards of ownership of the goods sold are transferred to the customer and the commodity has been delivered to the shipping agent/Customer. Sales are net of Sales tax, Excise duty, Goods return & trade discount. c) INCOME FROM SERVICES: Revenue in respect of contracts for services is recognised on when the service are rendered and related costs are incurred. (vii) FOREIGN CURRENCY TRANSACTIONS Transactions in Foreign Currencies are recorded at the exchange rate brvailing at the date of transaction. Foreign currency denominated Current Assets and Current Liabilities at year end exchange rates. The resulting gains or losses are recognised in the Statement of Profit and Loss. The brmium or gain/losses arising from forward cover transactions are recognised in the Statement of Profit & Loss over the life of the forward contract. (viii) INVESTMENT Long term investment are stated at cost, provision is made to recognize a decline, other than temporary, in the value of long term investments. (ix) RETIREMENT BENEFITS a) Contribution to Provident Fund is made to Regional Provident Fund Commissioner. Contributions toward Gratuity are made to the schemes of life Insurance Corporation of India based on brmium actuarially assessed and intimated in terms of the policies taken with them. These contributions are charged to Profit & Loss Account. b) Provision for incremental liability in respect of encashable privilege leave is made on the basis of independent actuarial valuation at the year end. (x) EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. (xi) TAXES ON INCOME Income tax expenses comprises of Current Tax and Deferred Tax charge or credit. Provision for Current Tax is made on the assessable income at the tax rate applicable to the relevant Assessment Year. The Deferred Tax Asset and Deferred Tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Assets arising mainly on account of brought forward losses and unabsorbed debrciation under tax laws, are recognised, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred Tax Assets on account of other timing differences are recognized, only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amounts of Deferred Tax Assets are reviewed to reassure realization. (xii) TRADE RECEIVABLES Trade Receivables are stated after making adequate provision for doubtful debts/advances. (xiii) BUSINESS SEGMENTS The Company is engaged mainly in the business of food processing. These, in the context of Accounting Standard 17 on Segment Reporting, as specified in the Companies (Accounting Standards) Rules, 2006, are considered to constitute one single primary segment. Further, there is no reportable secondary segment i.e. Geographical Segment. 2. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business. The provision for debrciation and all known liabilities is adequate and not in excess of the amount reasonably necessary. The financial statements indicate that the Company has accumulated losses and the net worth has been fully eroded. The Company has decided to focus on growth of sale in food products and has plans to develop the brsence and share in the food market and in view of the projections in growth, the financial statements have been brpared on a going concern basis. 3. The Company has received a notice of demand from Commercial tax Department of Government of Karnataka of Rs. 1,91,24,546/- including interest of Rs. 1,21,36,564/-on reversal of decision of the Karnataka High Court by the Subrme Court of India. The Company has not made any provision for the same as it will be approaching through the Karnataka Photographic Association by rebrsenting before the Authorities for relief. 4. The Companies Act, 2013 requires Companies to compute the Debrciation based on useful lives of assets brscribed in schedule II to the Companies Act, 2013. In current year the company has provided for the debrciation considering the balance of useful lives of assets as per the schedule II in terms of section 123 of the Companies Act, 2013. Accordingly the debrciation charged includes of Rs. 1,15,35,618/- due to revision in provisioning requirement as per Companies Act 2013. 5. In respect of Fixed Assets the provision for Impairment loss has been revised to Rs. 44,14,254/- (Previous year Rs. 61,48,923/-) on existing Fixed Assets. 6. The Company has effected transfer of Lease Hold rights of the plot obtained from GIDC and the sale of factory building built thereon. However formal consent of GIDC is awaited. 7. The Company has continued the Gratuity Scheme of LIC and has made provision for Gratuity, after considering the corpus with LIC under the scheme, on actual ascertainment of liability. 8. The Company has unabsorbed debrciation and carried forward losses etc available for set off under Income Tax Act 1961. However in view of brsent uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis. 9. The names of Micro, Small and Medium Enterprises to whom the company owes sums exceeding Rs. 1 Lakh each and which are outstanding for more than 30 days as at 31st March, 2015 are NIL as the vendors of the company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro Small & Medium Enterprises Development Act 2006. 10. The company operates mainly in food processing segment. 13. Previous year's figures have been regrouped where necessary |