1' : CORPORATE INFORMATION Kunststoffe Industries Limited is a listed public limited Company, incorporated under The Companies Act, 1956. The Company is engaged in the business of "Job Works for Processing of HDPE/PP Pipes, etc." NOTE '2' : 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 No Debrciation has been provided on Office Building as same has not been in use for the business of the company during the Current year. ii 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. iii In respect of assets on hand as on 31.12.93 at the rates in force prior to the abovementioned notification. V. 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. VI. 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. VII. Segment reporting The Company is engaged in the business of Jobworks for Processing of HDPE/PP Pipes, etc, 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. VIII. 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. IX. 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 I. Pursuant to reference made by the company, The Hon. Bench of BIFR, New Delhi by their order dated 18.01.2007 declared the Company as Sick Industry. Rehabilitation Scheme has been approved by BIFR during the year. 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 and Fixed Assets for the year ended 31.03.2012. The Revaluation of the year ended 31.012.2007 has resulted into a loss of Rs. 14,79,06,784/- 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 31.003.2009 has resulted into a Profit of Rs. 2,89,66,113/- and the same has been credited to Profit & Loss Account as "Profit on Revaluation of Assets" and shown below the line. So also, the Revaluation of the year ended 31.03.2012 has resulted into a Profit of Rs. 12,15,19,764/- 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. 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 under consideration i.e. as at 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. 4,48,55,306/- 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 under consideration viz. 31.03.2012. III. "The liability of Rs. 46,98,30,496.00/- was created in favour of Gayatri Pipes & Fittings Pvt. Ltd. As under: 1) Rs. 26,70,72,939.00/- by debiting IDBI A/c for taking over it's liability on 31.03.2008. 2) Rs. 20,27,57,557.00/- by debiting P/L A/c as Prior year adjustment on 20.03.2011. In the year 2012-13, the Company has transferred Rs. 26,70,72,939.00/- to General reserve as the said liability is waived by Gayatri Pipes & Fittings Pvt. Ltd. as per their undertaking given to BIFR. Also, the Company has transferred Rs. 20,27,57,557/- to P/L A/c and shown under the head "Prior year Adjustment" as Gayatri Gayatri Pipes & Fittings Pvt. Ltd. as per the same undertakings given to BIFR." IV. No Provision for Income Tax liability has been made in terms of BIFR Order dated 08.03.2013 under which vide clause 10.3(iii) the company is exempt form the applicability of minimum Alternate tax (MAT) under section 115JB of the income Tax Act, 1961. V. Debtors and Creditors balances are subject to confirmations from the parties. VI. 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. VII. 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 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 Soniya P. Sheth Managing Director M. D. Turakhia Partner Membership No. 017399 S. Chacko Director U. K. Jha Director Dhwani P. Sheth Chief Finance Officer Padmini Ravindran Company Secretary Date : 30.05.2015 Place : Mumbai |