NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Basis of Accounting: The financial statements are 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"), as applicable. The financial statements have been brpared as a going concern 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 except for change in the accounting policy for debrciation as more fully described in Note 28. b) Use of Estimates: The brsentation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively. c) Fixed Assets: (i) Fixed assets are capitalised at cost inclusive of freight, duties, taxes and all incidental expenses related thereto and net of cenvat credit. (ii) Pre-operative expenses incurred during construction period are allocated to various assets in proportion to their capital cost. (iii) Fixed assets are stated at cost less accumulated debrciation thereon. d) Debrciation / Amortisation: As per the Schedule II of the Companies Act 2013, effective 1st April 2014, the management has internally reassessed the useful lives to compute debrciation wherever necessary, to conform to the requirements of the Companies Act, 2013. Debrciation on Fixed Assets is provided: I. For assets purchased on or before April 1, 2014. (i) Whose remaining useful life is completed as at 1st April 2014, the carrying value of fixed assets is reduced from the retained earnings as at said date. (ii) For remaining assets the carrying value of Fixed assets is debrciated equally over the balance useful life of the assets. II. For assets other than covered under clause (I) above, on Straight Line Method as per Schedule II to the Companies Act, 2013. e) Investments: Long-term investments are stated at cost of acquisition less provision for permanent diminution in the value of such investments determined for each investment individually. Current investments are valued at lower of cost and fair value. f) Inventories: (i) Raw materials are valued at lower of cost and net realisable value. Cost is computed on FIFO basis. (ii) Finished goods and stock-in-process include estimated cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. (iii) Stores and spares are charged to consumption in the year of procurement. (iv) Valuation of stock in trade of shares is carried out at lower of its cost and quoted market price, computed scrip wise. Cost is ascertained on FIFO basis. g) Operating Cycle: Assets and Liabilities have been classified in to current and non-current based on the Operating Cycle. h) Revenue Recognition: Revenue from sales of goods is recognised on dispatch of material and when risk and reward are transferred to the customers. Revenue from sale of shares is recognised on the basis of broker's contract note. i) Accounting for Taxes on Income: Provision for taxation comprises of current tax and deferred tax. Current tax rebrsents tax on Profits for the current year as determined as per the provisions of the Income Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year are accounted based on tax rates in force and tax laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences, are recognised to the extent there is reasonable / virtual certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. j) Borrowing Costs : Borrowing Costs attributable to acquisition and construction of qualifying assets are capitalised as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss. k) Transactions in Foreign Currency: Foreign currency transactions are recorded at the exchange rates brvailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange brvailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and liabilities are recognised in the Statement of Profit and Loss. Nonmonetary foreign currency items are carried at cost. l) Retirement Benefits: Liability in respect of retirement benefits is provided and charged to the Statement of Profit and Loss on accrual basis as follows: a) Provident / Pension Funds: At a specified percentage of salary / wages for eligible employees. b) Leave Entitlements: As determined on the basis of accumulated leave to the credit of the employees as at the year end as per the Company's rules. c) Gratuity is provided in accordance with the provisions of Accounting Standard (AS) - 15 "Employee Benefits" on the basis of actuarial valuation carried out as at year end by an independent actuary m) Impairment of Assets: The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and recognised in the Statement of Profit and Loss. If at the balance sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciated historical cost. n) Accounting for Provisions and Contingent Liabilities: The Company creates a provision when there is a brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. 2. Working capital facilities from a bank are secured by hypothecation of stocks of raw materials, finished goods, stock in process and book debts and further secured by equitable mortgage of plot of land measuring about 3,000 square meters bearing Survey No. 26, Plot No. 87 in the Govt. Industrial Estate, Village Khadoli, Dadra & Nagar Haveli, Silvasa and also the personal guarantee of a Director of the Company.There are no borrowings under the said facilities as at the year end. 3. No provision has been considered necessary for diminution in fair value of a long term unquoted equity investment, as in opinion of the management, such diminution is not of permanent nature and the investment was made on long term basis. 4. Pursuant to enactment of the Companies Act, 2013 and its applicability for accounting period commencing from 1st April, 2014, the estimated useful lives of fixed assets have been reviewed and revised generally to align with the provisions of Schedule II to the Act. Consequently: a) The Company has fully debrciated the carrying value of assets, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of X 52,25,180 against the opening Surplus in the Statement of Profit and Loss under Reserves and Surplus. b) As a result, debrciation charge for the year is higher by X.9,02,784. 5. 'Stock in process' rebrsents salvaged/ pelletised materials accumulated over a period of time to be consumed in the due course of time. 6. a) The balances in accounts of certain trade receivables, trade payables and loans and advances given are subject to confirmation, and consequent reconciliations. Adjustments in this respect in the opinion of the management are not likely to be material and would be carried out as and when ascertained. b) In the opinion of the management, assets other than Fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. 7. The management based on their review of assets and operation of the Company has determined that there is no indication of potential impairment and that the recoverable amount of its fixed assets is not lower than its carrying amount. Accordingly, no provision for impairment has been considered necessary as at 31st March, 2015. 8. Previous year figures have been regrouped / rearranged, wherever considered necessary. For and on behalf of the Board RAKESH TAINWALA Managing Director CHANDRA PRAKASH DOSHI Director MS. POOJA KHEDKAR Company Secretary Place : Mumbai Date : 26th May,2015 |