NOTE No '24' A) CORPORATE INFORMATION Shreyas Intermediates Limited (The Company) was incorporated in the year 1992 and is engaged in the business of manufacturing of Pigments and Pigment Intermediates. B) STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Preparation of Accounts The financial statements have been brpared covering for the period of six months from 1stof October 2014 to 31st of March 2015. The accounts have been brpared on historical cost basis ignoring changes, if any, in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on accrual basis, except Sale Tax setoff benefit, which is accounted on cash basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles. 2. Fixed Assets & Debrciation Fixed Assets are shown at cost less accumulated debrciation. Debrciation on all assets is provided on straight-line method at the rate and in the manner specified in schedule XIV of the Companies Act, 1956 on single shift basis. The financial statements have been brpared for six months ended March 2015, and as per the advice of the technical evaluation team, the company has brferred to charge debrciation for this six months period at the rates specified in schedule XIV of the Companies Act, 1956 to brsent comparable figures for the financial statements pursuant to MCA Notification dated 29th August, 2014. Debrciation is provided on pro-rata basis, from the month in which assets have been put to use. 3. Inventory Finished goods and work in progress are stated at cost or net realizable value whichever is lower. Raw materials and stores & spare parts are valued at cost 4. Revenue Recognition Sales are recognized at when goods are dispatched and are recorded net of trade discounts, rebates. All sales have been shown inclusive of Excise & Other Duties but excluding Sales Tax. Revenue in respect of Overdue interests, insurance claims etc in recognized to the extent company has realized or is reasonably certain of its ultimate realization. Expenses are accounted for on accrual basis except medical reimbursement and LTA for employees, which are accounted for in cash basis. 5. Employee Benefits a) Salary, Wages {.Compensated Absences Short-term employee benefits including accumulated compensated absences determined by company's policy are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the employee has rendered services. b) Gratuity The company has conducted an actuarial valuation using the Projected Unit Credit method in respect of its liabilities with regard to the gratuity benefits payable in future and has made an annual provision towards the same however no contributions have been made to any Gratuity Funds by the company during the year. c) Provident fund The Company contributes to the Provident Fund, a defined contribution scheme, which is administered by the Government. The rate at which the contributions are made are as per the statutory requirements and is recognized as expense in the Statement of Profit and Loss, of the period in which the services are rendered by employees. 6. Contingent Liability Contingent Liabilities are not accounted for but are disclosed in the Notes to Accounts. 8. Current & Deferred Tax The company is eligible for substantial set off of carried forward Business Losses under the provisions of the Income Tax Act, 1961 in the earlier and current year, and the same is estimated to be eligible for setoff in the forthcoming years and considering the same, the management has provided for the deferred tax during the year. The same remains based upon realistic estimates and are considered adequate. 10. Segment Reporting The company is engaged in the manufacture of pigments and pigment intermediates which are single reportable business segment. C) NOTES TO ACCOUNTS: - 1. The company has incurred Cash Losses during the year as well as in the earlier year and accordingly has been covered under the definition and provisions of The Sick Industrial Companies (Special Provisions) Act, 1985. The company had made an application with the Board of Industrial & Financial Restructuring under the provisions of the Act which was declined due to technical issues. The company has made a fresh reference to the Board of Industrial & Financial restructuring which is pending before the Secretariat. The notice was issued by the Secretariat for personal hearing on a date however the notice was received upon the lapse of the above date. The company has rebrsented its case and is awaiting further instruction and intimations from the respective authority and forums. 2. The company had availed secured loans from the bankers which had been defaulted. The company had approached the financial institutions with a settlement scheme which has been duly approved by both the lending bankers. Bank of Baroda had approved a One Time Settlement option in respect of its dues by assigning its entire dues to Invent ARC. Furthermore State Bank of India had also assigned their dues on Security Realization basis to Invent ARC. The company remains committed to settle the dues according to the above scheme on specified terms. According to the specified terms under the scheme, the company has not made any provision towards the above and thus we remain unable to quantify the implication of the above scheme of restructuring in our report. 3. During the year, the company has reduced the carrying cost of its Plant & Machinery by the quantum of interest and principal which had been capitalized by the Company. An additional amount which rebrsents the value of Capital Repairs undertaken in respect of the said plant & machineries during the production trial run period, has been reduced and redassified under Other Non-Current Assets, pursuant to the advice of the technical evaluation team. Accordingly, during the year the cost of Plant & Machinery have been decreased to account for the above reduction of carrying cost of the plant as also Capital Repairs to bring the value of the Plant at its reasonable realistic value as per the technical evaluation team. The company has claimed a rebate on the Interest during the year which rebrsents cessation of the interest liability in respect of its Secured Loans availed during the earlier years. 4. The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary. 5. The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any daim for interest outstanding at the dose of the year from any said party. 5. Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation. 6. The financial statements have been brpared covering for the period of six months from 1 st of October 2014 to 31 st of March 2015 whereas the brvious year cover a period of year ended 30thSeptember, 2014. The figures pertaining to brvious year have been regrouped/redassified wherever required. As per our report of even date For Sayeed Khan* Associates For & on behalf of the Board of Directors Chartered Accountants SAYEED KHAN PROPRIETOR (Rajesh Pareek) CFO (Shri. R. D. Ghanekar) WHOLETHIE DIRECTOR (Shri. Govind Sharrna) DIRECTOR (Ms. Shruti Sharma) DIRECTOR PLACE: MUMBAi DATED: 28th AUGUST, 2015 |