NOTE '1' : SIGNIFICANT ACCOUNTING POLICIES I. Basis of brparation of financial statements The financial statements have been brpared and brsented complying the section 134(5) of Companies Act, 2013 in accordance with the accounting principles generally accepted in India and in accordance with the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Guidance Notes and other relevant provisions of the Companies Act, 2013. Accounting polices not specifically referred to otherwise are consistent with generally accepted accounting principles. II. Use of estimates The brparation of financial statements in conformity with the generally accepted accounting principles in India requires the management to make estimates and assumptions, that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized. III. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will accrue to the Company and the revenue can be reliably measured and also when it is reasonably certain that the ultimate collection will be made and that there is buyers' commitment to make the complete payment. A. Revenue from sale In case of Sales of Goods - When the property and all significant risk and rewards of ownership are transferred to the buyer or no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. It excludes amounts recovered towards Sales Tax and includes amount received towards processing activities done for other, if any. B. Interest and dividend: Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognized when right to receive dividend is established. C. Others: Other revenues / incomes and costs / expenditure are accounted on accrual, as they are earned or incurred IV. Tangible assets and debrciation / amortisation A. Tangible fixed assets are stated at cost of acquisition less accumulated debrciation / amortisation and accumulated impairment losses, if any. B. Fixed Assets are shown at Original cost of acquisition less accumulated debrciation. Fixed Assets were revalued as on 31.03.2015. The surplus arising from the revaluation has been transferred to "Revaluation Reserve" and shown under the head "Reserves & Surplus". As the Fixed Assets were revalued on the last day of the Balance sheet, no debrciation has been provided on Revalued Figures C. Debrciation is provided on the straight line method on the basis of useful life of the asset in the manner specified in Schedule II to the Companies Act, 2013. Debrciation on additions to assets or on sale/disposal of assets is calculated pro-rata from the month of such addition, or upto the month of such sale/disposal, as the case may be. i In respect of assets acquired on 01.01.1994 and thereafter at revised rates specified in the said Schedule vide Notification No 756 E dated 16.12.93 and as clarified in Circular No. 14 dated 20.12.1993 issued by the Department of the Company Affairs. ii In respect of assets on hand as on 31.12.93 at the rates in force prior to the abovementioned notification. V. Inventories Raw materials and consumable Stores are valued at cost. Finished and Semi Finished goods are valued at lower of cost or market value. VI. Investments Investments are classified into Current and Non Current / Long Term Investments. Current investments are stated at lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognize decline, other than temporary, in the value of long term investments. VII. Operating Cycle Receivables and Payables in relation to operations are considered as "Current Assets" and "Current Liabilities" as the case may be considering the nature of business of the Company. All other Assets and Liabilities have been classified as provided in Revised Schedule VI, issued by the Institute of Chartered Accountants of India. VIII. Employee benefits A. Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related service is rendered; B. Post Employment Benefits Defined contribution plans: Company's contribution to State governed Provident Fund Scheme is recognized during the year in which the related service is rendered; C. The company has not ascertained liability towards payment of gratuity and hence no provision has been made in accounts. It is accounted for on the basis of payment. D. Benefits payable to employees during their tenure of employment viz. Bonus, Leave Encashment etc are accounted on cash basis. Retirement benefits are accounted as and when the same become due for payment. IX. Foreign currency transactions A. All transactions in foreign currency are recorded in the reporting currency, based on closing rates of exchange brvalent on the dates of the relevant transactions. B. Monetary assets and liabilities in foreign currency, outstanding as on the Balance Sheet date , are converted in reporting currency at the closing rates of exchange brvailing on the said date. Resultant gain or loss is recognized during the year in the statement of profit and loss. C. Non monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate brvalent on the date of the transaction. D. Import and Export of goods in foreign currency are accounted at exchange rates brvailing on the date of payment, whenever made. E. Term loans in foreign currency for financing capital expenditure were accounted at rupee equivalent values on the date of loans disbursement. Till 31.12.2001 year-end outstanding loans were reconverted at the rate brvailing on Balance Sheet Date. F The audited Statement of Accounts of USA Branch have not been received till 30.05.2015 i.e. the date of signing the Audit Report of the Company. All original Documents are lying with US Office. We have verified the same on the basis of Xerox / Scanned Copy. The value of Total Transactions is Rs. 15,120,042/- as against Total turnover of Rs. 741,234,178/- i.e. 2.04% which is from the materiality point of view is insignificant. X. Segment reporting The Company is engaged in the business of Polymer Processing and manufacturing of Spun bond non woven fabrics, which as per Accounting Standard - 17 'Segment Reporting' is considered to be the only reportable business segment. The Company is also operating within the same geographical segment. Hence, disclosures under AS-17 are not applicable. XI. Impairment of assets The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favourable change in the estimate of the recoverable amount. XII. Miscellaneous Expenditure The balance amount of Expenses on Exhibition Index II Trade fair have been amortised in the current financial year. XIII. Treatment of Contingent Liabilities & Contingent Assets The amount of contingent losses are charged to the Profit & Loss Account on a reasonable estimated basis that probable future event confirm that an asset has been impaired or a liability has been incurred as at the Balance Sheet Date and contingent gains are not recognized in the accounts. NOTE '2' : OTHER NOTES ON ACCOUNTS I. Pursuant to a reference mace by the Company, the Hon'ble Bench of the BIFR, New Delhi, has by their Order dated 18th January 2007, declared the Company as a "SICK INDUSTRY". Rehabilitation Scheme (DRS) is under final stage of acceptance and all creditors ahave been settled. II. The Company has revalued Fixed Assets, Investments and Loans & Advances for the year ended 31.12.2007; Fixed Assets & Investments for the year ended 31.03.2009, Fixed Assets for the year ended 31.03.2012 and Fixed Asset for the year ended 31.03.2015. The Revaluation of the year ended 31.012.2007 has resulted into a Loss of Rs. 477,458,372/- and the same has been debited to Profit & Loss Account and shown below the line as "Extra Ordinary Items". Similarly, the Revaluation of the year ended 31.03.2009 has resulted into a Profit of Rs. 222,550,613/- and the same has been credited to Profit & Loss Account as "Profit on Revaluation of Assets" and shown below the line.The Revaluation of the year ended 31.03.2012 has resulted into a Profit of Rs. 276,887,178/- and the same has been credited to the Revaluation Reserve Account and shown in the Balance Sheet as at 31.03.2012 under the head, Reserves & Surplus. So as Revaluation of the year ended 31.03.2015 has resulted into a profit of Rs. 173,101/- and the same has been credited to the revaluation reserve account and shown in the balance sheet as at 31.03.2015 under the head reserves & surplus. At the time of earlier revaluations carried out as on 31.12.2007 & 31.03.2009, the Gross Block was shown at Revalued Figures instead of Cost. Hence the same has been rectified in the year ended 31.03.2012 by replacing the Gross Cost of the Assets deducting the loss on revaluation and adding the profit on revaluation carried out as at 31.12.2007 & 31.03.2009 respectively. The difference of Rs. 122,351,108/- between the under debrciation provided on reduced value of the said assets for the year commencing from 01.01.2008 to 31.03.2009 (i.e. for a period of 15 months) and the over debrciation provided on the increased value of the said assets has been debited to the Revaluation Reserve Account of the year ended 31.03.2012. III. The Company has availed non funding facilities from its bankers. In this connection Rs. 2,297,790/- (brvious year Rs. 2,215,895/-) are kept with Banks as lien / margin money against guarantees opened by the bankers and guarantees issued by them. Contingent liability for bills discounted with Dena Bank is NIL. b) Debtors and Creditors balances are subject to confirmations from the parties. IV. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet. V. Modvat credit of Excise duty taken on purchase of Raw Materials is not included in the value of inventory of Raw Material. Also value of inventory of finished goods does not include excise duty payable on manufacture. This has no effect on the profit of the Company. VI. Figures of the brvious year have been re-grouped / rearranged /reclassified wherever necessary. As per our report of even date For P.M.Turakhia & Associates Chartered Accountants Firm Registration No: 111086W M.D.Turakhia Partner Membership No. 017399 For A.V. Jobanputra & Co. Chartered Accountants Firm Registration No: 104314W A.V.Jobanputra Proprietor Membership No. 016352 For and on behalf of the Board of Directors Pravin V. Sheth Chairman & Managing Director P. S. Krishnan Executive Director Abdullah Ebrahim Chief Finance Officer G. Ravindran Executive Director Sunita Agarwal Company Secretary Place : Mumbai Date : 30.05.2015 |