STATEMENT OF ACCOUNTING POLICIES Note – 1 a) Basis of Accounting The accompanying financial statements have been brpared under the historical cost convention, in accordance with Indian Generally Accepted Accounting Principles (Indian GAAP) and the provisions of the Companies Act, 2013. The Company follows mercantile system of accounting except for insurance claims which is accounted on cash basis. The accounting policies adopted in brparation of financial statements are consistent with those followed in the brvious year. b) Use of estimates The brparation of financial statements in conformity with Indian GAAP require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known/ materialize. c) Valuation of Inventories - Raw materials/Consumable Stores are valued at cost after providing for cost of obsolescence or depletion in value wherever applicable. Cost is determined on FIFO basis. - Work-in-Progress is valued at lower of cost or net realisable value. - Finished goods are valued at lower of cost or net realisable value. Value of finished goods includes applicable excise duty. - The cost for the purpose of Work-in-Progress and finished goods, includes direct costs and overheads incurred in bringing the inventory to their brsent location and condition. d) Cash Flow Statement The Cash Flow Statement is brpared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and brsents the cash flows by operating, investing and financing activities of the Company. Cash and Cash equivalents brsented in the Cash Flow Statement consist of cash on hand and demand deposits with banks. e) Fixed Assets - All fixed assets are valued at historical cost less accumulated debrciation and impairment losses. - Fixed Assets are capitalised at cost inclusive of freight, non refundable duties & taxes and all incidental expenses related thereto. - Expenditure related to and incurred during implementation of the project is included under capital work-in-progress and the same is capitalised under appropriate heads on completion of the project. - For the purpose of determining of appropriate debrciation rates, plant and machinery falling in the category of continuous process plant has been identified on the basis of technical opinion by the Company. - In case, the recoverable amount of the Fixed Assets is lower than its carrying amount, a provision is made for the impairment loss. f) Impairment of Assets The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, recoverable amount of the assets is estimated. If such recoverable amount of the Assets is less than its carrying amount, carrying amounts is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date, there is an indication that a brviously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets are reflected at the recoverable amount subject to maximum of the debrciable historical cost g) Debrciation - Debrciation on tangible assets is provided on straight line basis as per the useful life brscribed in Schedule II of the Companies Act, 2013. - The debrciation is calculated based on an independent technical evaluation of the useful life of Plant and Machinery. - The cost of leasehold rights of land is amortized in equal installments over the residual period of the lease. - Software cost is amortised over the estimated useful life. h) Revenue Recognition Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection. Revenue from sale of goods is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net of sales tax / Value Added Tax. Export benefits are accounted on mercantile basis. i) Foreign Exchange Transactions. - Import of raw materials/consumable stores are accounted on the basis of CIF value at the rate of exchange brvailing on the date of transactions. - Monetary assets and liabilities in foreign currency as at balance sheet date are translated at the rate of exchange brvailing at balance sheet date. All exchange differences, are dealt with in the statement of profit and loss except to the extent that they are regarded as an adjustment to interest costs and capitalized to fixed assets. - The brmium or discount on forward contracts is amortised as expense or income over the life of the contract. Any profit or loss on settlement/cancellation of forward contract is recognized as income or expenses for the year in which they arise. - The exchange difference relating to Foreign Currency long term monetary items are adjusted to the cost of Fixed Assets. J) Government Grants, Subsidy and Export Incentive Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attached to such grants and the grants will be received. The Company follows 'Capital Approach' or 'Income Approach' for accounting of such grants depending upon the nature of grant received. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. k) Employee Benefits Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render service) is measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations. Contributions to Provident Fund, Contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered service entitling them to the contributions. Provision for leave encashment is made on the basis of unutilised leaves of the employees as on balance sheet date. The gratuity benefit obligations recognised in the balance sheet rebrsents the brsent value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized in the statement of profit and loss. l) Borrowing Costs - Borrowing costs directly attributable to the acquisition and construction of qualifying assets are capitalised as a part of the cost of respective asset up to the dates such asset is ready for intended use. Other borrowing costs are charged as an expense in the period in which they are incurred. - Interest income earned from deposits is reduced from Interest and Finance charges. [Refer Note 23] m) Lease Operating Leases: Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of lease. [Refer note 25(13)] n) Earnings Per Share The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares. [Refer Note 25(12)] o) Taxes on Income - Current Tax is determined as the amount of tax payable in the respect of taxable income for the year in accordance with the Income Tax Act. The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations as at the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent there is reasonable certainty that sufficient taxable income will be available in future, against which the deferred tax assets can be realized; however where there is unabsorbed debrciation and carried forward losses, deferred tax assets is created only if there is virtual certainty of realisation of assets - Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JAA of the Income tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and is reviewed at each balance sheet date. p) Provisions and Contingent Liabilities A provision is recognized when there is a brsent obligation as a result of past event, based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts. NOTES ON ACCOUNTS (1) Contingent Liabilities: i. Counter Guarantees given to the banks in respect of: Bank Guarantees of Rs. 279.44 lacs given to the Electricity Departments / Various Government Authorities (Previous year Rs.101.71 lacs) ii. Disputed demands of Rs.267.04 lacs respect of various orders passed by Central Excise /Income Tax authorities (Previous year Rs. 294.68 lacs) for which appeals are made. (2) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.3150.01 lacs (Previous year Rs.2535.69) (3) Other Commitments: The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports. Such export obligations at year end aggregate to Rs.4432.98 lacs (Previous year Rs.4834.14 lacs) (4) In the opinion of the Board, Current Assets, Loans and Advances (including Capital Advances) have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated. The accounts of certain Sundry Debtors, Sundry Creditors, Advances and Lenders are subject to confirmation / reconciliation and adjustments, if any, the management does not expect any material difference affecting the current year's financial statements. (5) The Company is engaged in the segment packaging and there are no reportable segments as per Accounting Standard 17.(6) Previous year’s figures have been re-arranged and regrouped wherever considered necessary. As per our Report of even date attached For and on behalf of Shah Gupta & Co. Chartered Accountants Firm Registration No. 109574W Vipul K Choksi Partner Membership No. 037606 For and on behalf of Board of Directors K K Kanoria, Chairman Atul Sud, Director Saket Kanoria, Managing Director Sudhir Merchant, Director Akshay Kanoria, Executive Director Sunil Talati, Director Rishav Kanoria, Director Sonal Agarwal, Director S G Nanavati, Executive Director Rabindra Jhunjhunwala, Director Vivek Poddar, Chief Financial Officer Harish Anchan, Company Secretary Place : Mumbai Date : 27th May, 2016 |