1. SIGNIFICANT ACCOUNTING POLICIES I. BASIS OF brPARATION OF FINANCIAL STATEMENTS These financial statements are brpared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006. II. USE OF ESTIMATES The brparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of the assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known. III. FIXED ASSETS AND DEbrCIATION/ AMORTIZATION (i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of Cenvat credit/Input Credit under VAT on capital goods. Debrciation on tangible assets is provided on Straight Line Method as specified in Schedule 11 to The Companies Act, 2013. I ntangible Assets are amortised as per AS-26 issued by The Institute of Chartered Accountants of I ndia. Lease hold land is amortised over the period of lease. (ii) Fixed assets are eliminated from financial statements either on disposal or when retired from active use. The retired assets are disposed off or discarded immediately. (iii) Debrciation is provided on pro-rata basis from the day in which assets have been put to use and up to the day on which assets have been used by the company. IV. IMPAIRMENT OF ASSETS The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. V. FOREIGN CURRENCYTRANSACTIONS a) Transactions denominated in foreign currencies are recorded at the exchange rate brvailing on the date of the transaction or that approxi mates the actual rate at the date of the transaction. b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. I n case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract its recognized as exchange difference and the brmium paid on forward contracts is recognised over the life of the contract. c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account. VI. RESEARCH & DEVELOPMENT EXPENSES Revenue expenditure on Research & Development is charged against the profit for the year in which it is incurred. VII. REVENUE RECOGNITION Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the despatch of goods from the factory of the company. Sales are disclosed net off trade discount, Sales returns. Revenue in respect of insurance, interest, cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made. VIII. OPERATING LEASES Lease arrangements where risk and rewards incidental to ownership of an asset, substantially vests with the Lessor, are classified as operating leases. Rental expenses on assets (land) obtained under operating lease arrangement are recognized on a straight line basis over a term of the lease, and in respect of Immovable Equipments are recognized as per the terms of the Lease agreement. IX. INVESTMENTS Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long - term investments. Provisions, if any are made for permanent diminution in value of investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long - term investments are carried at cost. X. INVENTORIES i) Raw materials and packing materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable. ii) The finished and trading goods have been valued at cost or net realizable value whichever is less. iii) Semi finished goods have been valued at estimated cost, as certified by the management. iv) Stores & Spares have been valued at cost or market price whichever is lower. XI. FINANCIAL DERIVATIVES AND COMMODITY HEDGINGTRANSACTIONS In respect of derivative contract, brmium paid, gains/losses on settlement and losses on restatement are recognized in the Statement of Profit and Loss. XII. RETIREMENT AND OTHER EMPLOYEE BENEFITS Post -Employment Benefit Plans: i. Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner. ii. Defined Benefit Plan : The liabilities in respect of gratuity and leave encashment are determined using Projected Unit Credit Method with actuarial valuation carried out at the Balance Sheet date. Actuarial gains and losses are recognized in full in the Profit & Loss Account for the period in which they occur. Contribution in respect gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognised in the balance sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost and as reduced by the fair value of respective fund. Short Term Employee 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 employee renders the service. XIII. BORROWING COSTS Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized, as applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred. XIV. TAXES ON INCOME Tax expense comprises of Current and Deferred Tax. Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of The Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets is reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. XV. EARNINGS PER SHARE Basic Earnings per Share is computed by dividing the net profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent share outstanding at year-end. XVI. PROVISIONS AND CONTINGENT LIABILITIES Provisions are recognized only when there is a brsent obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. XVII. ACCOUNTING POLICIES Accounting Policies not specifically referred to, are consistent and in consonance with generally accepted Accounting principles. 2. The Company had in the brvious year, issued, 4,50,000 convertible equity warrants of Rs. 30 each to Aura Alkalies and Chemicals Private Limited (Promoter Group) on brferential basis . These warrants were converted into 4,50,000 equity shares at Rs 10 each and at a brmium of Rs 20 during the current financial year. 3. Balances for Trade Payables, Trade Receivables, Loans and Advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors. 4. Previous year's figures have been regrouped/recast wherever necessary to correspond with the current year's classification disclosure. As per our report of even date For R. A. Kuvadia & CO. Chartered Accountants F. R. N. 105487W For and behalf of the Board Sridhar Chari Whole time Director Sunil Shah Director Seema Gangawat Company Secretary Shashidharan V. AGM Accounts & Finance (R. A. Kuvadia) Proprietor Membership No. 040087 Place: Mumbai Date: 11.05.2015 |