Significant Accounting Policies: a) Basis of brparation The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/ as applicable. The financial statements have been brpared as a going concern on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. b) Use of estimates In brparing the Company's financial statements in conformity with the accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods. c) Fixed Debrciation: Fixed Assets: Fixed Assets is stated at cost of acquisition (net of CENVAT, wherever applicable) as reduced by accumulated debrciation. All costs including financial cost till commencement of commercial production are capitalized for qualifying assets. When assets are disposed or retired, their cost is removed from the financial statements. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year. Debrciation: Debrciation is provided on Straight Line Method except on Plant & Machinery which is on Written Down Value Method on the basis of useful life of assets as specified under Schedule II of the Companies Act, 2013. When assets are disposed or retired, their accumulated debrdation is removed from the financial statements. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year. d) Intangible Asssets Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All costs, including financing costs in respect of qualifying assets till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized. Intangible assets are amortised on a straight - line basis over a period of five years. A rebuttable brsumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management The amortization period and the amortization method are reviewed at least at each reporting date. If the expected useful life of the asset is significantly different from brvious estimates, the amortization period is changed accordingly. The gain or loss arising on the disposal or retirement of an intangible asset is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognised as income or expenses in the Statement of Profit and Loss in the year or disposal e) Inventories: Inventories are valued at "Lower of cost or net realizable value". Cost in respect of Raw Materials is computed on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make sale. Cost in respect of process and finished goods are computed on weighted average basis method, finished goods and process stock includes cost of conversion and other costs incurred in acquiring the inventory and bringing them to their brsent location and condition. f) Revenue Recognition: I) Sales of goods are net off trade discounts, return and inclusive of Excise Duty but excluded sales tax and state value added tax. Revenue is recognised when practically all risk and rights connected with ownership have been transferred to the buyer. This usually occurs upon dispatch, after the price has been determined and collection of the sales proceeds is reasonable certain. Expenses are accounted on accrual basis with necessary provisions for all known liabilities and losses. II) Interest Income Interest Income is recognized on accrual basis. iii) Export Incentives Export entitlements under Duty Drawback Scheme are recognized in the Statement of Profit & Loss when the right to receive credit as per the terms of the scheme is established in respect of the exports made. g) Foreign Currency Transactions / Exchange Fluctuation I) Transactions in foreign currencies are recorded in Indian rupees using the rates of exchange brvailing on the date of the transactions. At each balance sheet date, monetary balances are reported in Indian Rupees at the rates of exchange brvailing at the Balance Sheet date. All realized or unrealized exchange adjustment gains or losses are dealt with in the Statement of Profit and Loss. II) Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the report period and the corresponding foreign currency amount translated at the later of the dates of inception of the forward exchange contract and the last reporting date. Such exchange difference rate recognised in the Statement of profit and loss in the reporting period in which the exchange rates change. iii) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. h) Employee Benefits I) The Employee and Company make monthly fixed Contribution to Government of India Employee's Provident Fund equal to a specified percentage of the Covered employee's salary. Provision for the same is made in the year in which services are rendered by the employee. II) The Liability for Gratuity to employees, which is a defined benefit plan. The Company's Scheme is administered by UC. The liability is determined by based on Projected Unit Credit method. Actuarial gain / loss in respect of the same are charged to the Statement of profit and loss. iii) The Company does not allow carry forward of unavailed leave and hence unavailed leaves are encashed in the current year itself. iv) Short Term benefits are recognised as an expense at the undiscounted amounts in the Statement of Profit and Loss of the year in which the related service is rendered. I) Provision for Current and Deferred Tax Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act Deferred Tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or subsequently enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realized in future. Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost such assets, whenever applicable. Till the assets are ready for their intended use. A qualifying asset is one which necessary takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue accounts. Capitalization of borrowing cost is suspended when active development is interrupted. j ) Borrowing Cost Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost such assets, whenever applicable. Till the assets are ready for their intended use. A qualifying asset is one which necessary takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue accounts. Capitalization of borrowing cost is suspended when active development is interrupted. k) Impairment The management periodically assesses, using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes an impairment loss as the excess of the carrying amount of the asset over the recoverable amount The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amounts. I) Earning per Share Basic earnings per share is calculated by dividing net profit after tax for the year attributable to Equity Shareholders of the company by the weighted average number of Equity Shares outstanding during the year. For the purpose of calculating Dfluted Equity per share, the net profit or loss for the period attributable to Equity Shareholders (after adjustment for Diluted earnings) and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential Equity. m) provisions, contingent Liabilities and contingent Assets A provision is recognized when there is a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible or brsent obligation that may, but probably will not require an outflow of resources. Contingent Assets are neither recognized nor disclosed in the finandal statements. n) Excise Duty, Vat& Cenvat CENVAT / VAT credit on materials purchased for production / service availed for production / input service are taken into account at the time of purchase and CENVAT / VAT credit on purchase of capital items wherever applicable are taken into account as and when the assets are acquired. The CENVAT credits so taken are utilized for payment of excise duty on goods manufactured. The unutilized CENVAT credit is carried forward in the books. The VAT credits so taken are utilized for payment of sales tax on goods sold. The unutilized VAT credit is carried forward in the books. o) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2015 1. The contingent liability is Rs. Nil (P.Y. Rs. Nil). 2. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, and hence disclosure relating to amounts unpaid as at year endtogether with interest paid / payable under this Act has not been given. 3. Balances are subject to confirmation. 4. Paisas are rounded up to the nearest rupee. 5. Balances of Debtors, Creditors, Advances and Liabilities have been taken as per books, are subject to reconciliation/confirmation and consequential adjustments, if any. 6. The Company is Small and Medium Sized Company (SMC) as defined in the General Instructions In respect of Accounting Standards notified under the Companies Act, 1956. Accordingly, the Company has complied with the Accounting Standards as applicable to a Small and Medium Sized Company. 7. Borrowing costs attributable to the acquisition or construction of Qualifying Assets amounting to Rs. Nil (P. Y. Rs. Nil). 8. The difference between excise duty on opening and dosing stock of finished goods is recognized separately in the Statement of Profit & Loss. 9. During the year, the company has impaired the assets to the tune of Rs. Nil (P.Y. Rs. Nil). 10. Previous year's figures have been regrouped and rearranged wherever necessary, to make them comparable with those of current year. As Per Our Report of Even Date attached herewith For, J T Shah & Company Chartered Accountants [FRN No. 109616W] [J.T. Shah] Partner [M.No. 3983] For, Galaxy Bearings Ltd. [B. K. Ghodasara] Jt. Mg. Director [DIN-00032054] (R. V. Bhalodia] Director(DIN 00020098] [Dixit S Patel] Chief Financial Officer [Nayan S Patel] Company Secretary Place: Ahmedabad Date: 29th May 2015 |