Notes on Financial Statement for the year ended March 31, 2015 1. Significant Accounting Polices 1.1 Basis of brparation of Financial Statements The financial statements have been brpared and brsented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India to comply with the specified under section 133 of the Company Act, 2013 read with Rule 7 of the Companies (Account) Rules, 2014 and the relevant provision of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act") as applicable. The Accounting Polices adopted in the brparation of the Financial Statements are consistent with those followed in the brvious year. 1.2 Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities, revenues and expenses and the disclosure of contingent liabilities as at the date of financial statements. Actual results could differ from these estimates, such estimates and assumption are based on managements evaluation of the relevant facts and circumstance as on date of Financial Statement. 1.3 Fixed Assets 1.3.1Own Fixed Assets Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and sales- tax set-off) less accumulated debrciation. All related expenses other than carrying cost, include finance cost till commencement of commercial production and exchange loss on the external commercial borrowing. The company has adopted the companies (Accounting Standards) amendment rules, 2009 relating to accounting Standard -11 notified by the Government of India as on 31st March, 2009 ( as amend by notification on 29th Dec,2011) which allowed foreign exchange on long term monetary item to be capitalized to the extent they relate to acquisition of the debrciable assets. 1.3.2Lease Fixed Assets Operating Lease: - Rental are expensed with reference to lease term and other consideration 1.3.3 Intangible Fixed Assets Intangible Assets (Patent, Trademark) are stated at cost of acquisition net of cenvat and sales tax less accumulated debrciation. 1.4 Debrciation Debrciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule XIV of the Companies Act, 1956. Amount paid on Leasehold land has been sbrad over to remaining period of lease and has been written off proportionately. Debrciation working as per revised Companies act, 2013 is under process. 1.5 Impairment of Assets I n pursuance to Accounting Standard -28 issued by the Institute of Chartered Accountants of India, the Company has assessed no impairment of assets as on 31st March, 2015, hence no provision has been made in the books of accounts. 1.6 Investments Long term investments are stated at cost and short term investments are stated at lower of cost or market value. Provision for diminution in the value of Long Term Investment is made only if such a decline is other than temporary. 1.7 Retirement Benefits Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for. 1.8 Inventories Items of inventories are valued on the basis given below: • Raw materials i. At factory landed cost: FIFO basis ii. In transit: Cost • Finished goods i. Lying at factory: Lower of cost on FIFO basis or net realizable value. ii. Lying at branches: Lower of landed cost at respective branch on FIFO basis or net realizable value. • Traded goods: At cost on FIFO basis. • Work-in-Process: At cost of such goods arrived at on FIFO basis. • Scraps (reusable): At cost of such goods arrived at on FIFO basis. • Scrap (Other): Lower of cost or net realizable value. • Stores, Spares and Packing Materials: At cost of such goods arrived at on FIFO basis. Cost of Inventories comprises of the cost of purchases, cost of conversion and other cost including manufacturing overhead incurred in bringing them to their respective brsent location and condition. 1.9 Revenue Recognition Revenue from sale of goods is recognised when the substantial risk and rewards of ownership are transferred to the buyer which generally coincides when the goods are dispatched from the factory / stock point / or delivered to customers as per terms of the contract. Service Revenue is recognised on rendering services. Dividend income is recognized when right to receive the payment is established. Interest income is recognized on time proportion basis into accounts the amount outstanding and rate applicable. 1.10 Purchase of Raw materials, Stores &Spares and Packing materials Purchase is net of discount, sales tax, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards, & transit insurance. 1.11 Provision for Excise Duty Closing stock of the finished goods rebrsent including the excise duty which same debited to the profit & loss account to nullifying the effect of addition in the valuation of the finished goods as per accounting standard -2 of the ICAI 1.12 Provision for Current Tax and Deferred Tax Income taxes comprise of current tax, deferred tax charges and short excess provision of the earlier year. Provision for current tax is made after taking into consideration benefit admissible under the provision of Income Tax Act, 1961. Deferred tax resulting from the "timing difference" between taxable and accounting income is accounted for using the tax rate and laws that are enacted or substantively enacted as on the balance sheet date 1.13 Provisions, Contingent Liabilities and Contingent Assets A provision is recognized when the Company has a brsent obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 1.14 Foreign Currency Transaction 1. The Company has adopted to account for exchange differences arising on reporting of long term foreign currency monetary item in accordance with Companies (Accounting Standards) amendment Rules ,2009 pertaining to Accounting Standards 11 (AS-11) notified by Government of India on 31st March 2009 (as amended on 29th December,2011). 1A. Previous year's figures has been regrouped or recast wherever considered necessary to make them comparable with current year's figures. |