NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 1. Company overview Cenlub Industries Limited is an engineering company primarily engaged in designing, engineering, manufacturing, supply, installation and erection of Lubrication systems. 2. Significant Accounting Policies 2.1 Basis of brparation of financial statements The financial statements are brpared on accrual basis under the historical cost convention, modified to include revaluation of certain assets, in accordance with applicable Accounting Standards (AS) specified in the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. 2.2 Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting year. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future years. 2.3 Revenue recognition Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership in the goods to the customer. Revenue from services is recognised on rendering of services to customers. Interest income is recognised using the time proportion method, based on underlying interest rates. 2.4 Tangible fixed assets and capital work-in-progress Fixed assets, including capital work in progress are stated at cost of acquisition or construction less accumulated debrciation. Cost comprises the purchase price and any directly attributable costs of bringing the asset to its working condition for the intended use. Tangible fixed assets under construction are disclosed as Capital work-in-progress. 2.5 Intangible assets Intangible assets comprising computer software are stated at cost, including taxes, less accumulated amortisation. Computer software is amortised on a straight line basis at the rates brscribed for the computers in schedule II of Companies Act. 2.6 Borrowing Cost Financing costs relating to borrowed funds attributable to construction or acquisition of qualifying assets for the period up to the completion of construction or acquisition of such assets are included in the cost of the assets. All borrowing costs are charged to Statement of Profit and Loss. 2.7 Impairment The carrying values of assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the amount recoverable towards such asset is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net of debrciation or amortisation, if no impairment loss has been recognised. 2.8 Debrciation Debrciation is calculated on fixed assets on Straight line method in accordance with schedule XIV of the Companies Act, 1956 prorata from the month in which assets are acquired & put to use and in respect of deductions, up to and including the month in which such deductions are made. 2.9 Inventories Inventories are valued at the lower of cost and net realisable value. Cost includes all applicable costs incurred in bringing goods to their brsent location and condition, determined on a first in first out basis. 2.10 Foreign currency transactions Foreign currency transactions are recorded by applying the brvailing exchange rate on transaction date. All exchange rate differences are dealt with in Profit and Loss Account. 2.11 Provisions and contingencies A provision is created when there is a brsent obligation as a result of a past event that entails a probable outflow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure of a contingent liability is made when there is a possible but not probable obligation or a brsent obligation that may, but probably will not, entail an outflow of resources. When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. 2.12 Taxation Tax expenses for the period, comprising current tax and deferred tax, is included in determining the net profit/(loss) for the year. The company provides for deferred tax using the net liability method based on the tax effect of timing differences resulting from recognition of items in the financial statement. The deferred tax charge of credit is recognised using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. 2.13 Employee benefits (a) Defined-contribution plans Contributions to the Employees' Regional Provident Fund, Superannuation Fund, Employees Pension Scheme and Employees' state Insurance are recognised as defined contribution plant and charges as expenses during the period in which the employees perform the services. (b) Defined-benefit plans Retirement benefits in the form of gratuity and Leave Encashment are considered as defined benefit plant and determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date. Actuarial Gains and Losses are recognised immediately in the Profit & Loss Accounts. (c) Short term employee benefits: Short term benefits are charged off at the undiscounted amount in the year in which the related service is rendered. 2.14 Investments Long term investments are valued at cost. Any decline other than temporary, in the value of long-term investments, is adjusted in the carrying value of such investments. Diminution, if any, is determined individually for each long-term investment. Current investments are valued at the lower of cost and fair value of individual scrips. 2.15 Earnings per share Basic earnings per share are computed by dividing the net profit/(loss) for the year attributable to the equity shareholders with the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year, except where the results would be anti-dilutive. 2.16 Leases Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are classified as operating leases. Lease rents under operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term. 2.17 Events occurring after the balance sheet date Adjustment to assets and liabilities are made for events occurring after the balance sheet date that provide additional information materially affecting the determination of the amount of assets and liabilities relating to condition existing at the balance sheet date. 2.18 During the year a fraud of Rs. 18,23,877 was detacted, conducted by HR Manager. Appropriate action against him and FIR in this respect has also been made with jurisdiction police station. 3. Employee Benefits Provision for Gratuity & Leave encashment has been made by management's own calculation & not by Actuary valuation which is required as per Accounting Standard No. 15. 4. No Interest has been paid/ provided on credit from Micro, Small & Medium enterprises as no amount was overdue at any time. 5. Debrciation has been provided as per Scheduoe XIV of the Compnies Act, 1956. As per the management debrciation as per Schedule II of the Companies Act, 2013 will be provided from the FY 2015-16 onwards. For and on Behalf of For SATISH SINGLA & CO. (Chartered Accountants) CA SATISH SINGLA (Proprietor) Membership No.: 080836 Firm Reg. No.: 000882N For and on behalf of the Board VIJENDRA KUMAR MITTAL MANAGING DIRECTOR VIRENDRA KUMAR GUPTA DIRECTOR MADHU MITTAL DIRECTOR Place : Faridabad Date : 28-05-2015 |