Company Overview A) Your company has been running successfully into rice business since 1973. The long outstanding experience of the Directors has helped the Company to expand its global footprint. Your Company's diverse product line covers product like Sella Rice, Bhatti Sella, Rice for Diabetic peoples ,Smoked rice, Pesticide Residue free rice. Company's uses its strong relationship with Domestic and Global Business partners for market penetration and brsence. Company has introduced newer policies and strategies to facilitate development further. B) Statements of significant accounting policies: 1. Basis of Preparation of Financial Statements These financial statements have been brpared in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/ Companies Act, 1956 ("the 1956 Act"), as applicable except for certain categories of fixed assets that are carried at re-valued amounts. The financial statements have been brpared under the historical cost convention on accrual basis. All Assets and Liabilities are classified into Current and Non-current as per the company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. 2. Use of Estimates and Judgments The brparation of the financial statements are in conformity with the Accounting Standards which requires management to make estimates and the assumption that affect the reported amount of assets and liabilities and disclosures relating to the contingent liabilities as on date of balance sheet and the reported amount of revenues and expenditure during the reported period. The estimates and assumptions used in the financial statements are based upon management's best evaluation of the statements. Examples of such estimates include useful life of fixed assets, creation of deferred tax asset, lease rentals and write off of deferred revenue expenditure. Actual results may differ from those estimates. 3. Revenue Recognition The Company follows the mercantile system of accounting and recognizes the income and expenditure on accrual basis except in case of significant uncertainties. Certain items of income such as DEPB Income ,insurance claim, market fees refund, Service Tax Refunds ,Interest Subventions , overdue interest from customers etc have been considered on Payment Basis to the extent the amount is accepted by the parties. The principles of the revenue recognition are given below Sales are recognized as follows Domestic Sales-At the point of dispatches to customers. Export Sales - At the time of issue of bill of lading Sales are recorded net of sales returns, price differences and sales tax. Sale of license and duty draw back are recognized on realization basis. 4. Fixed Assets Fixed Assets are stated as per Schedule II of Companies Act, 2013. During the year Assets whose useful life has been expired as per Companies, Act, 2013, however asset is still standing in books of accounts then as per schedule II Company has transferred 95% amount of asset in the debrciation reserve account and the carrying cost as on 01.04.2014 has been transferred to revenue reserve account and remaining amount (i.e 5%) is standing as residual value of assets in the books of accounts as on 31.03.2015. 5. Debrciation Debrciation is provided on written down value basis at rates provided in Schedule II to the Companies Act,2013 and is systematically allocated over the useful life of an asset as specified in part C of schedule II of Companies Act, 2013. Company has re-calculated debrciation and the assets whose useful life has been expired as per Companies, Act, 2013, however asset is still standing in books of accounts then as per schedule II Company has transferred 95% amount of asset in the debrciation reserve account and the carrying cost as on 01.04.2014 has been transferred to revenue reserve account and remaining amount (i.e 5%) is standing as residual value of assets in the books of accounts as on 31.03.2015. Debrciation on plant & Machinery has been provided on the basis of shifts worked in the case of both the units. Cost of leasehold land is amortized over the period of lease 6. Leases In respect of operating lease, lease rentals are accounted on accrual basis in accordance with the respective lease agreements. However there is no lease as on the date . 7. Government Grants Grants in the nature of capital contribution towards setting up modernization of projects is adjusted from the cost of the related fixed assets. 8. Deferred Tax Deferred tax assets and liabilities are computed on the timing differences at the balance sheet date between the carrying amount of assets and liabilities and their respective tax bases. Deferred Tax Assets (DTA) is recognized based on management estimates of virtual certainty that sufficient future taxable income will be available against which such DTA can be realized. The deferred tax charge or credit is recognized using the tax rates and tax law that have been enacted or substantively enacted by the balance sheet date. 9. Employees Benefits 9.1 Defined Contribution Plans Defined contribution plans are benefit plans under which the company pays fixed contribution to state managed benefit schemes. The company contributions to defined contribution plans are recognized in the profit and loss account in the financial year to which they relate. 9.2 Defined Benefits Plans The company has defined benefit plan in respect of its gratuity liability and contributes to a Gratuity Fund managed by LIC of India. Contribution is made to this fund yearly on the basis of calculation made by LIC keeping in view certain factor. This brmium is charged to Profit & loss a/c in the year of payment. 10. Investments Long Term Investment is intended to be held for more than a year. All others investment are current in nature. Long Term Investments are stated at cost while current investment at lower of cost and fare value. 11. Inventories Inventories are valued at cost or net realizable value whichever is lower, as taken, valued and certified by the management. The basis for determining cost for various categories of inventories is as under Raw Material- At cost on FIFO Basis Finished Stock -At material cost + appropriate share of production overhead Packing Material -At Cost Stores & Spares Stores & spares arte charged to profit & loss A/c in the year of purchase. 12. Foreign Exchange Transactions Transactions in foreign currency are converted at the exchange rate brvailing at the date of the transaction. Foreign currency monetary assets and liabilities not covered by forward exchange contracts are restated at the yearend rates and the resultant gains or losses are recognized in the profit and loss account. Nonmonetary items are carried in terms of historical cost denominated in foreign currency using the exchange rates at the date of transaction. Forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm commitment or oh highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Premium on foreign exchange forward contracts are recognized in the profit and loss account over the life of contract. Any profit and loss arising on cancellation of forward contract is recognized as income or expense in the period in which they arise. This practice is being followed as per the AS11. The company follows the Accounting Standards which are made mandatory .It is in the process of formulating the requisite mechanism/ systems to meet brscribed requirements under Accounting Standards 30, 31 & 32. It shall be following the accounting policy of recognition brsentation & disclosure of forward exchange transactions including Derivative/Hedging/Currency Swaps & Interest Swaps etc brscribed under these Accounting Standards with effect from the date these are made mandatory by ICAI. 13. Researches and Development Revenue Expenditure on Research & Development is charged as an expense in the year in which it is incurred. Capital expenditure is included in respective heads under fixed assets. 14. Miscellaneous Expenditure Share Issue expenses etc are expensed pro-rata over the period of five years. 15 Provisions ,Contingent Liabilities and contingent assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements. 16 Segment Reporting Segment Reporting as per Accounting Standard 17: The Company has only one product segment i.e Rice and only one geographical segment. 17 Borrowing Cost Borrowing Costs that are attributable to the Acquisition, Construction of Production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. 18 Corporate Social Responsibility As per section 135 of Companies Act, 2013 average net profit of Company for immediately brceeding three years is Rs.186354911. Company has to spent Rs. 3726918 i.e. 2% on average net profit of Company. However during the year 2014-15 Company has spent Rs. 1137500 & amount unspent is Rs. 2589418. as it was first year for spending of CSR amount therefore some projects are still in process and till next year Committee will be able to achieve all its targeted projects 19. Deferred Revenue During the year Company has spent Rs. 3314620 on its advertisement campaign which is yet to begin and these expenses has not being charge to revenue and has been shown under the head Deferred Revenue expenditure in the balance sheet. 20. Dividend on Forfeiture Shares As partly paid share holders has not made payments on 24.08.2015 i.e. last date for payment of balance amount of call money along with the share brmium amount resulting their shares has been forfeited by the Company in their Board Meeting held on 28.08.2015. No dividend has been proposed on partly paid shares as these were forfeited. Notes to Accounts 1. Managerial Remuneration During the year Company has given remuneration to all the directors including managing director & Wholetime directors as per section 197 of Companies Act, 2013 read with Schedule V which is within overall limit of 11% of net profit as calculated. 2. Value of Assets as at 21.9.94 the date of Conversion of the firm to the Company under Part IX of the Companies Act 1956 has been taken at value shown in books of erstwhile firm Chaman Lal & Sons. 3. Gratuity Payable to employees at some future date has been duly provided for by the Company by taking Group Gratuity Scheme from LIC of India. 4. Stores, Spares and Labour in respect of internally carried out repair and maintenance of Plant and Machinery and Building have not been charged separately but have been directly charged to stores and spares consumed and wages account. 5. Confirmation of some of the accounts at year-end included under heads 'Sundry Debtors', Sundry Creditors' and Loans and Advances have yet to be received as at the date of the Auditors Report. 6. Payment against supplies from small scale and ancillary undertakings are generally made in accordance with agreed credit terms and to the extent ascertained from available information, there was no amount overdue in this regard. 7. The Managerial Remuneration has been paid within the limits of Section 197 of Companies Act 2013. Managing Director Rs. 4919154/- Whole Time Directors Rs. 13288974/8. Contingent liabilities as at 31.3.2015 9. a) The Company's appeal with Commissioner Excise and Taxation, Punjab for the year 2009-10 is pending for wrong imposition of Vat amounting Rs. 782343/- & CST amounting Rs. 9389/- . However Company has deposited Rs. 195590/- against Vat and Rs. 2400/- against CST being the 25% of the total amount for tendering its appeal. b) The Company's appeal with Commissioner Excise and Taxation, Punjab for the year 2010-11 is pending for wrong imposition of Vat amounting Rs. 1843094/- & CST amounting Rs. 82260/-. However Company has deposited Rs. 460774/- against Vat and Rs. 20565/- against CST being the 25% of the total amount for tendering its appeal. c) The Punjab Government has imposed PIDF (development fund) @ 3% on paddy purchase since 2009-2010 on all the rice sheller and the liability of the Company on this issue has yet to be determined. However all the rice shellers has appealed against this levy of development fund on the Ground that this is not applicable on exports sales. However domestic sales achieved by the Company in Punjab will be subjected to this development fund if decided against. d) Company's appeal is also pending with CESAT Ahmedabad against imposition of penalty by Custom Authorities Kandla amounting Rs. 1750000/- on the alledged ground of containing higher Non Basmati Grain in one of the export lot. 10. Prior period items include Expenses/Income related to brvious year not provided for are separately classified as prior period expenditure/income during the current year in accounts. 11. In the opinion of the Board and to the best of their knowledge and belief,the value on realization of the current asssets,loan & advances, deposits in the ordinary course of business will not be less than the value stated in Balance Sheet. 12. Pursuant to the provisions of Sections 205A and 205C of the Companies Act,1956,the Dividend which remain unclaimed/unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. (i) AS-17 Segmental Reporting The Company has only one business segment namely rice. There is no different geographical segment. 15. The provisions of the Industries (Development and Regulation) Act, 1951, relating to licensed capacity are not applicable to the Company. The installed capacities in metric tones per hour are as under: Amritsar (Leased) 2 MT Rice per hour. Karnal 12 MT Rice per hour. The installed capacity is as certified by the management and relied upon by the Auditors, being a technical matter 1. Stores & Spares are charged to Profit & Loss at time of Purchase and no inventory in respect of these is being maintained. 2. There was no payment exceeding Rs One Lac due to any small scale industrial undertaking as known to Management. 3. Additional Information Pursuant to point no. 5 of part-II of Schedule-III to the Companies Act 2013:-(A) Licensed and installed Capacity, Actual Production and Opening Stocks:- |