Notes to financial statements for the year ended 31 March 2016 1 Significant Accounting Policies : i) Basis of Preparation:- The financial statements have been brpared to comply in all material respects with Accounting Standards notified under section I33 of the Companies Act, 20I3 (the Act) read with rule 7 of the Companies (Accounts) Rules, 20I4. The financial statements have been brpared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and except for the changes, if any, in accounting policy discussed below, are consistent with those used in the brvious year. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criterion set out in the Schedule III to the Act. ii) Use of Estimates:- The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. iii) Revenue Recognition:- Revenue is generally recognised on accrual basis. Revenue from Site Contracts is accounted for on the basis of reaching relevant milestones. iv) Tangible Assets:- a) Tangible Assets are stated at cost, less accumulated debrciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquision of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready for use. vi) Impairment of Assets:- The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to Statement of Profit and Loss. If at the Balance Sheet date, there is any evaluation that a brviously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect. vii) Capital Work-in-Progress:- These are stated at cost to date relating to items or project in progress, incurred during construction / br-operative period. viii) Leases:- Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. ix) Investments:- Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. x) Inventory:- Raw materials, Work-in-Progress, Stock- in- transit, Packing materials, Stores and spares have been valued at cost, arrived on weighted average method. Traded goods and Finished goods have been valued at lower of cost and net realisable value. Cost of finished goods includes direct material, excise duty, freight and forwarding and apportion of manufacturing overheads based on normal operating capacity, and is determined on a weighted average basis. Cost of traded goods includes Cost of Purchase and other direct costs incurred and is determined on a first in first out basis. xi) Borrowing Costs:- Borrowing costs directly attributable to the acquision, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. xii) Foreign Exchange Transactions:- Transactions in foreign currencies are accounted for at the exchange rate brvailing on the date of transaction. Gains and Losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss. In case of forward contracts (non speculative), the exchange difference are dealt with in the statement of profit and loss over the period of contracts. xiii) Retirement and other Employee Benefits:- a) Retirement benefits in the form of Provident Fund, Employee State Insurance and Superannuation Fund is a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds. b) Gratuity and Compensated Absences liability is defined benefit obligations and are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. c) Actuarial gains / losses are immediately taken to Statement of Profit and Loss and are not deferred. xiv) Income Tax :- Tax expense comprises of current and deferred tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, I96I. Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities, as measured by the enacted / substantively enacted tax rates. Deferred tax Expense / Income is the result of changes in the net deferred tax assets and liabilities. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed debrciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised. xv) Segment Reporting:- a) The Company's operating businesses are organised and managed separately according to the nature of products and services provided, with each segment rebrsenting a strategic business unit that offers different products and serves different markets. b) Common allocable costs are allocated to each segment in proportion of respective segment to total revenue of the Company. c) Assets and liabilities in relation to segments are categorized based on items that are individually identifiable in that segment. Certain assets and liabilities, which form component of total assets and liabilities, are not identifiable to specific segments as the underlying resources are used interchangeably. Assets and Liabilities, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated Assets/Liabilities" d) The Company brpares its segment information in conformity with the accounting policies adopted for brparing and brsenting the financial statements of the Company as a whole. xvi) Earning per Share:- Basic earnings per share are 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 the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. xvii) Provisions:- A provision is recognised when an enterprise has a brsent obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. xviii) Contingent Liabilities:- A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability, but discloses its existence in the financial statements. xix) Cash and Cash Equivalents:- Cash and Cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 2 Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) Rs. 491.88 lacs(PY Rs. 2.95 lacs). 3 In respect of Sundry Creditors which are Micro,Small and Medium Enterprises, the Company has not availed credit facility beyond 45 days. Further, there is no outstanding payable to such Enterprises beyond 45 days as on Balance Sheet date. 4 The Company's main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. However, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required 5 Disclosure in respect of Operating Lease in accordance with AS 19 on 'Leases' a) The Company has taken on lease various Office Premises, Residential Premises and Godowns for the periods ranging from 3 years to 6 years. b) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:- i) Not later than one year Rs. 22.58 lacs (PYRs.20.52 lacs). ii) later than one year and not later than five years- Rs.47.44 lacs (PYRs. 69.43 lacs). iii) later than five years - Nil c) lease payments recognised in the Statement of Profit and Loss for the period from 1.4.2015 to 31.3.2016 is Rs. 105.31 lacs (PYRs. 102.62 lacs). 6 The figures for the brvious year have been regrouped/reclassified wherever necessary. As per our attached Report of even date For HARIBHAKTI AND CO. LLP Chartered Accountants ICAI FRN I03523W For and on behalf of the Board ASHOK V. CHOWGULE Chairman S.L. CHOWGULE Managing Director CHETAN DESAI Partner Membership No. 17000 P. PRABHUDEV Chief Financial Officer Ms.SHALU TIBRA Company Secretary Place : Mumbai Date : 20th May, 2016 |