ISIGNIFICANT ACCOUNTING POLICIES 1.Corporate Information Midwest Gold Limited (the company) is a public company domiciled in India and incorporated under the provisions of the companies Act, 1956. Its Shares are listed on stock exchanges in India. The company is brsently engaged in the trading business of Granite, Marbles and Gold. 2.Basis of Preparation These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, These financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 133 of Companies Act 2013 [As on date the notified accounting standards are, the Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 2013. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, period of 12 months is taken as a operating cycle for the purpose of current - non current classification of assets and liabilities." IIFIXED ASSETS AND DEbrCIATION: Tangible Assets are stated at acquisition cost, net of accumulated debrciation and accumulated impairment losses. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is recognised immediately in the Statement of Profit and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss. Machinery spares which are specific to particular item of Fixed Assets and its use is expected to be irregular are classified as Mandatory spares and are shown separately under Fixed Assets. "Debrciation is provided on a straight line method, at the rates and manner brscribed in Schedule II of the Companies Act, 2013. All assets have been debrciated at 95% of their cost and the remaining 5% has not been debrciated as the same will form part of Scrap value.. Lower of Cost or Estimated Realizable Value Lower of Cost or Net Realizable Value Lower of Cost or Net Realizable Value IVSALES Sales are accounted for on passing of title to the customers. Returns and rebates and discounts against goods sold are recognized as and when ascertained and deducted from sales of the respective year. VMISCELLANEOUS EXPENDITURE 1.Preliminary & Public Issue Expenses: Preliminary & Public Issue Expenses incurred by the Company will be charged to revenue on a deferred basis over a period of 10 Years on a Commencement of Commercial Production. 2.Quarry Development Expenditure: Expenditure incurred on quarry development is treated as deferred revenue expenditure to be written off over a period of ten years after commencing regular quarrying Operation. In the event of abandoning the quarrying operation with in the period of Ten Years, the Same shall be written off in that year. VITRANSACTIONS IN FOREIGN CURRENCY : 1.Foreign currency transactions are recorded on the basis of exchange rates brvailing on the date of their occurrence. 2.Foreign currency balances as on the Balance Sheet date are realigned in the accounts on the basis of exchange rates brvailing at the close of the year and exchange difference arising there from, is adjusted to the cost of fixed Assets or charged to the Profit and Loss Account, as the case may be. VIIRETIREMENT BENEFITS FOR EMPLOYEES EMPLOYEE BENEFITS Defined Contribution Plan The Company makes contribution towards Provident Fund and Employee State Insurance as a defined contribution retirement benefit fund for qualifying employees. The Provident Fund plan is operated by the Regional Provident Fund Commissioner. Under this scheme, the Company is required to contribute a specified percentage of payroll cost, as per the statute, to the retirement benefit schemes to fund the benefits. Employee State Insurance is remitted to Employee State Insurance Corporation. Defined Benefit Plan For Defined Benefit Plant the cost of providing benefits is determined using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains or losses are recognized in full in the Profit and Loss Account for the period in which they occur. (a)Gratuity Liability towards gratutity is provided for on actuarial Valuation Basis. (b) Leave Encashment Benefits The Company extends benefits of leave to the employees while in service as well as on retairement. Provision for leave encashment benefit is being made on the cash basis. (c)Short Term Employee Benefits. Short term employee benefits are recognized as expenses as per Companies scheme based on expected obligation VIIIRESEARCH AND DEVELOPMENT EXPENDITURE Research and development expenditure of revenue nature are charged to the Profit and Loss Account, while capital expenditure are added to Fixed Assets in the year in which they are incurred. IXCONTINGENCIES Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of Notes to Accounts. XBORROWING COSTS Borrowings costs incurred in relation to the acquisition, construction of assets are capitalized as part of the costs of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charges as an expense in the year in which these are incurred. XITAXES ON INCOME a.Provision for Tax for current year has been made on the basis of estimated taxable income computed in accordance with the provisions as per Income Tax Act, 1961. b.Deferred Tax resulting from all timing differences between Book Profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted rate of Tax, to the extent that the timing difference as expected to crystallize. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realized. As Per Our Report of Even Date attached For and on behalf of the Board For G.L. KOTHARI & CO. of CHARTERED ACCOUNTANTS G.L.KOTHARI Director DIN : 02391274 PK Tyagi M. No. 25481 Proprietor B.S.Raju Whole Time Director DIN : 01431440 Place : Bangalore Date : 30.05.2015 |