ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS 1. Significant Accounting Policies A. Basis for Preparation of Accounts: The financial statements have been brpared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 2013, as adopted consistently by the company. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis. B. Revenue Recognition: Sales are recognized when goods are supplied and recorded net of excise duty on goods manufactured but includes job work income. C. Fixed Assets & Debrciation: Fixed Assets are capitalised at cost inclusive of Inward Freight, Taxes (CST), Installation expenses and allocable broperative expenses. During the year, the company has calculated debrciation as per revised schedule II of Companies Act, 2013. Rs. 1386329/- , the amount of carrying amount of assets, the life of which is already over as per schedule II of Companies Act,2013 has been recognised opening balance of retained earnings and current year debrciation has been increased by Rs. 38,13,956/- as compared to erstwhile provision as per schedule XIV of Companies Act, 1956. Debrciation has been provided on Straight Line Method, at the rates and as per life specified under schedule II of the Companies Act, 2013. No debrciation is provided on assets that have already been debrciated to the extent of 95% of their original value. Life of intangible assets [Software] has been adopted as 3 years. D. Investments: Investments are stated at market value as on date of Balance Sheet. E. Inventories: Raw material, consumables & Finished Goods are valued at Cost (net of Excise & VAT) including expenses incurred in bringing the inventories to its brsent location and condition or net realizable value, whichever is lower. F. Retirement benefits: (i) The Company's contribution to provident fund is charged to Profit and Loss Account. (ii) Leave encashment is paid on annual basis every year and charged to Profit & Loss Account. (iii) Provision for Accrued Gratuity has been made on the basis of in house estimate only and not on the basis of professional actuarial valuation report. G. Foreign Currency Transactions: Transactions in Foreign currency are recorded at the rate of exchange in force at the time transactions are effected and exchange difference, if any, on settlement of transaction is recognised in Profit & Loss Account. Monetary transaction balance as on date of Balance Sheet have been reported at exchange rate on Balance Sheet date and difference charged to profit & loss account. H. Contingent Liability: A disclosure for a contingent liability is made when there is a possible obligation as a result of past event, existence of which will be confirmed only by occurrence or non occurrence of a future event, which is not wholly within the control of the enterprise. I. Borrowing Costs: Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. J. Related Party Transactions: Disclosure of transactions with Related Parties, as required by Accounting Standard 18 "Related Party Disclosures" has been set out in a separate statement annexed to this Schedule. Related Parties as defined under clause 3 of the Accounting Standard have been identified on the basis of rebrsentations made by key managerial personnel and information available with the Company. K. Taxes on Income: Tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future, L. Provisions: A provision is recognized when company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate has been made of the amount of the obligation. M. Subsidy : The Company had started new project in F Y 2013-14 and completed during the curent year which was under TUF Scheme of central Government (5% Interest subsidy and 10% Capital Subsidy) as well as Gujarat Government 6% Interest Subsidy and Vat concession under eligible Fixed Capital investment in Plant and Machinery. The Company will receive equal yearly installment of eligible fixed capital investment in 8 years, on basis of VAT/CST payment made by Company in each year. As per the scheme, the company had filed its interest and capital subsidy claim to central government and interest and eligible amount under scheme has been filed with Gujarat Government. The company has made provision for income under interest subsidy (Gujarat-of Rs.1,23,80,018/- [reduced from interest expense], Central Government of Rs.1,03,16,480/- [reduced from interest expense) & Plant and Machinery-Central Government Capital subsidy- Rs. 1,94,31,885/- [reduced from fixed assets], Subsidy receivable (Gujarat) -3,36,60,142/- [booked as operating income] during the year. 2. Previous year figures have been regrouped and rearranged, wherever necessary, to make them comparable with the current year figures. 3. Estimated amounts of contracts remaining to be executed on Capital Account (Net of Advance) and not provided for Rs. - Nil (Previous year - Nil) 4. On the basis of the information available with the company, there is no amount remaining unpaid as on 31st March, 2015 to any supplier who is a small scale or ancillary industrial undertaking beyond the agreed credit period. 5. Balances of some of the Sundry Debtors, Loans & Advances, Creditors and other parties including inoperative Bank a/c are subject to confirmation and reconciliation. 6. The Company has assessed most of its fixed assets for probable impairment loss as on date of Balance Sheet as per the requirement of AS 28 issued by ICAI, and concluded that no impairment loss needs to be booked. Referred to in our report of even date For V. K. Moondra & Co. FRN No. 106563W Chartered Accountants V. K. Moondra Proprietor M. No. 70431 Krunal Shah Anal Desai CFO Company Secretary For and on Behalf of the Board Manoj Somani Managing Director DIN :00119021 M. K. Somani Chairman DIN : 00360950 Place : Santej Date : 25th May 2015 |