39. During the year company has made sales on consignment basis Rs. 1,71,66,15,251/- (Pr. Yr. Rs. 1,40,76,33,513/-) commission income from which is included in sales of services. 43. Pursuant to enactment of new Companies Act 2013 and as per the Schedule II of the Companies Act 2013; with effect from 1st April 2015 Company has revised the useful life of fixed Assets for providing debrciation on it. Accordingly, carrying amount as on 1st April 2014 has been debrciated over the remaining revised useful life of the fixed assets. Due to this change the debrciation for the year ended 31st March, 2015 is lower by Rs. 96,17,670 and profit before tax for the year ended 31st March, 2015 is higher to the extent of Rs. 96,17,670. In accordance with transitional provision in respect of assets whose useful life is already exhausted as on 1st April 2014, debrciation Rs. 4,44,985 (Net of tax expenses of Rs. 235504) has been recognized in the opening balance of retained earnings in accordance with the requirements of Schedule II of the Act. 46. Intangible assets under development amounting to Rs 45,000 rebrsent fees paid for acquisition of Patent. 47. Interest Income Rs.3,57,20,715/- (Pre. Year Rs.4,09,27,293) included in Interest Received (Note 20 Other Income) rebrsents interest earned on FDRs pledged with banks for various credit facilities availed by the company. 48. Income Tax authorities have carried out a search u/s 132 of the Income Tax Act at the brmises of the company and others in November 2011. The Demand raised by Assessing Officer has been substantially been reduced in First Stage of Appeal i.e. CIT (Appeal) further in the opinion of the management and consultants the demand raised is likely to be either deleted or substantially reduced and accordingly no provision has been made for the liability and disclosed as contingent / disputed liability. 49. Previous year's figures are regrouped / rearranged wherever considered necessary to make them comparable with current year's figures. 50. Company Information, Significant Accounting policies and practices adopted by the Company are disclosed as under : COMPANY INFORMATION Signet Industries Limited was incorporated on January 29, 1985 under the Companies Act 1956, having its Registered Office in Mumbai. Company is engaged in Merchant Trading of All Kind of Polymers & Other Products and Manufacturing of Micro Irrigation System (DRIP), Sprinkler Pipe / PVC Pipe & Agro fittings and its Allied Products, all type of House Hold & Plastic Moulded Furniture. The Company's shares are already listed on Bombay Stock Exchange (BSE), Mumbai and also got listed on National Stock Exchange vide letter NSE/ LIST/17898 dated March 11, 2015 issued by National Stock Exchange of India Limited. The Company's shares are traded on both Bombay Stock Exchange and National Stock Exchange. SIGNIFICANT ACCOUNTING POLICIES i) Basis Of Accounting The Accounts have been brpared in accordance with the historical cost convention. The financial statements are brpared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India. These financial statements have been brpared to comply in all material aspects with the Accounting Standards notified under Companies (Accounting Standard Rules, 2006 read with Rule 7 of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies. ii) Use Of Estimates The brparation and brsentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates and difference between actual results and estimates are recognized in the period in which the results are known/materialize. iii) Valuation Of Inventories Inventories are valued at lower of cost or market value on FIFO basis. Cost of Inventory is generally comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their brsent location and condition. The excise duty in respect of closing inventory of finished goods is included as cost of finished goods and goods in transit stated at cost. iv) Debrciation Debrciation on fixed assets is provided in the manner specified in Schedule II to the Companies Act, 2013. Debrciation of an asset is the difference between Original cost / revalued amount and the estimated residual value and is charged to the statement of profit and loss over the useful life of an asset on straight line basis. The estimated useful life of assets and estimated residual value is taken as brscribed under Schedule II to the Companies Ac, 2013. Debrciation on additions during the year is provided on pro rata basis with reference to date of addition/ installation. Debrciation on assets disposed /discarded is charged up to the date on which such asset is sold. Intangible assets are amortized over a period of 3/5 year. v) Revenue Recognition The Company follows mercantile system of the accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties. Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty. Interest income is recognised on time proportion basis. Income from services is recognised as they are rendered (based on arrangement / agreement with the concern customers). Dividend income on investments is accounted for as and when the right to receive the payment is established. The Government Incentives are accounted for on accrual basis taking into account certainty of realisation or its subsequent utilisation. vi) Fixed Assets Fixed assets are stated at cost of acquisition or construction or development, net of tax /duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less debrciation, amortization and impairments, if any. Assets under erection / installation and advance given for capital expenditure are shown as "Capital work in progress". Expenditure during construction period are shown as "br-operative expenses" to be capitalized on erection / installations of the assets. vii) Foreign Currency Transaction All transactions in foreign currency are recorded at the rates of the exchange brvailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the Statement of Profit and Loss. Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange brvailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the Statement of Profit and Loss. In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities. viii) Investments Investments that are readily realisable and are intended to be held for not more than one year are classified as current investments. All other investments are classified as non-current investments. Current Investments are carried at lower of cost or market/fair value. Non-Current investments are carried at cost of acquisition. However, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary. ix) Employee Benefits (a) Post- employment benefit plans Defined Contribution Plan - Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities. Defined Benefit Plan - The company has carried out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) liability as per actuarial valuation as at year end is recognized in the financial statement. Actuarial gains and losses are recognized in full in Statement of Profit and Loss Account for the year in which they occur. (b) Short term employment benefits The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also. x) Borrowing Cost Borrowing costs attributable to acquisitions and construction of qualifying assets are added to / capitalized 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 Statement of Profit and Loss. xii) Segment Accounting Policies (1) The company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk return and the internal reporting system. The various segments identified by the company comprised as under:- Name of Segment Comprised of Manufacturing - Manufacturing of Irrigation and Plastic Products Wind Power Unit - Wind Turbine Power Unit Trading - Merchant Trading of Various Products (2) Segment revenue, segment results, segment assets and segment liabilities include respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities respectively. (3) The Company has identified geographical segments as the secondary segment. Secondary segments comprise of domestic and export markets. However, revenue from export sales do not exceed 10% of the total revenue. Segment assets/liabilities pertaining to export market also do not exceed 10%. Hence, no disclosure is required in respect of geographical segments. xiii) Lease Accounting As a Lessee Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rentals thereon are charged to the statement of profit and loss over the period of lease. xiv) Taxes on Income Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognized on timing difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent period. Deferred Tax assets are recognized and carried forward to the extent that there is a virtual certainty that sufficient future taxable leases and lease rentals thereon are charged to the statement of profit and loss over the period of lease. xiv) Taxes on Income Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognized on timing difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent period. Deferred Tax assets are recognized and carried forward to the extent that there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. xv) Impairment of Assets The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/ external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. 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 recognized in prior accounting period is reversed if there has been an indication that impairment loss recognised for an asset no longer exists or may have decreased. xvi) Provision, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. xvii) Cash Flow Statement Cash flows are reported using indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the company are segregated based on the available information. AS PER OUR REPORT OF EVEN DATE FOR ASHOK KHASGIWALA & CO. CHARTERED ACCOUNTANTS . CA Avinash Baxi Partner M.No.:79722 FOR AND ON BEHALF OF BOARD OF DIRECTORS Sumit Jamad Chief Financial Officer Mukesh Sangla Managing Director DIN-00189676 Saurabh Sangla Director DIN-00206069 Preeti Singh Company Secretary Place: Indore Date : 28th May, 2015 |