NOTES ON FINANCIAL STATEMENTS 1. CORPORATE INFORMATION Narmada Gelatines Ltd. was set up in 1961 and is registered in Jabalpur (Madhya Pradesh) under Registration number L24111MP1961PLCO16023. The Registered office of the Company is at 28, CARAVS, 15 Civil Lines, Jabalpur (M.P.). The Company is engaged in the manufacture and sale of ossein and gelatine. 2. SIGNIFICANT ACCOUNTING POLICIES (i) Basis of Accounting 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 notified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been brpared on accrual basis under the historical cost convention except for income on investments in shares of companies and Mutual Funds. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. (ii) Use of Estimates The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. (iii) Fixed Assets (a) Tangible Fixed assets: The gross block of Fixed Assets is stated at cost of acquisition or construction (except revalued assets) including any cost attributable to bringing the assets to their working condition for their intended use. Borrowing costs that are directly attributable to acquisition or construction of an asset that necessarily takes a substantial period of time till such assets are ready for the intended use are capitalized. Freehold land, Buildings, Plant and Machinery and Electrical Installations were revalued as at 31.3.1993 by an approved valuer at the then net replacement cost and are stated accordingly. (b) Intangible Fixed assets : Intangible assets are stated at cost of acquisiton less accumulated amortisation and impairment, if any. (iv) Debrciation / Amortisation a) Debrciation is provided on the basis of the useful lives of the assets as estimated by management in the manner brscribed under Section 123 read with Schedule II of the Companies Act, 2013. b) Debrciation on certain Buildings acquired prior to 1st July 1986 is charged under Written Down Value method and on others under Straight Line method. c) Being a continous plant, Debrciation on Plant and Machinery is charged based on the useful lives of the assets, as estimated by management, under Straight Line method on single shift basis excepting certain items acquired before 1st July, 1986 on which debrciation is charged under Written Down Value method. Debrciation on Diesel Generator sets is charged under Straight Line Method. d) Debrciation on Electrical Installations and Furniture & Fixtures is charged under Written Down Value method. e) Debrciation on Motor Vehicles is charged under Straight Line method. f) In respect of revalued assets, the incremental debrciation on account of revaluation is recouped from Revaluation Reserve. g) Intangible assets are amortised over their estimated useful economic life under Straight Line method. Computer software cost is amortised over a period of five years. (v) Investments Non-Current investments are stated at cost. Provision is made for diminution, other than temporary, in the value of investments, wherever applicable. Current investments are carried at lower of cost and fair / market value. (vi) Inventories Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost is determined on weighted average basis and comprises of expenditure incurred in the normal course of business in bringing inventories to their brsent location including appropriate overheads apportioned on a reasonable and consistent basis. Obsolete, slow moving and defective stocks are identified at the time of physical verification of stocks and where necessary, provision is made for such stocks. (vii) Research and Development Expenses All revenue expenditure on research and development are written off in the year they are incurred. Capital expenditure on research and development is included in fixed assets and debrciated as per policy. (viii)Revenue Recognition a) Sale of goods is recognised when the significant risk and rewards of ownership is transferred to the customer. Sales rebrsents invoiced value of goods supplied, net of returns, including excise duty but excluding sales tax. b) Revenue recognition from sale of "Duty Entitlement Passbook Licence" is made on sale of the licence after receipt of the same from the office of the Director General of Foreign Trade. c) Income from Duty Drawback is recognised on receipt basis. (ix) Income from Investments Income from Investments (other than investments in shares of companies and Mutual Funds) is accounted on an accrual basis. Income from investment in shares of companies is recognised as and when the right to receive such income is established. (x) Foreign Currency Transactions a) Foreign currency transactions are accounted at the exchange rates brvailing on the date of the transactions. Gains and losses, if any, at the year end in respect of monetary assets and monetary liabilities not covered by the forward contracts are recognized in the Profit and Loss Account. b) Non-monetary items denominated in foreign currency are stated at the rate brvailing on the date of the transaction. (xi) Employee Benefits Contributions to defined contribution schemes such as Pension, Provident Fund, etc. are charged to the Profit and Loss account as and when incurred. The Company also provides for retirement/ post-retirement benefits in the form of gratuity and leave encashment. Such defined benefits are charged to the Profit and Loss account based on valuations made by independent actuaries, as at the balance sheet date. (xii) Volunatary Retirement Scheme Expenses Voluntary Retirement Scheme Expenses are fully charged off in the year of payment. (xiii)Accounting for Taxes Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is tax recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future. However, in respect of unabsorbed debrciation or carry forward losses, the deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future. (xiv)Impairment of Assets Impairment losses (if any) on fixed assets (including revalued assets) are recognized in accordance with the Accounting Standard "Impairment of Assets" issued in this regard by the Institute of Chartered Accountants of India. If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the brsent value of estimated future cash flows. (xv) Provision and Contingent Liabilities Provisions are recognized when the Company has a brsent obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The same is disclosed as contingent liability if no reliable estimate can be made of the amount of obligation or the possibility of future cash flow is remote. 3. Pursuant to an alignment with the requirement of the Companies Act, 2013, the Company has charged off the debrciation on account of revaluation as an expense to the profit and loss account. Accordingly, the profit for the year ended 31st March 2015 is lower by Rs. 6.47 Lac. 4. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. Figures in bracket indicate brvious year's figures. T.R.CHADHA & CO. For and on behalf of the Board Chartered Accountants Firm Reg. No. 006711N Pravin Kumar Jabade Partner M.No.107196 Priya Gupta Chief Financial Officer Mahesh Verma R Company Secretary avindra K Raje Director Ashok K Kapur Wholetime Director Place : Jabalpur, date : 27th May, 2015 |