NOTES FORMING PART OF THE FINANCIAL STATEMENTS THE COMPANY AND NATURE OF ITS OPERATIONS: Shiva Global Agro Industries Ltd having corporate office in Nanded, Maharashtra, India carries on manufacturing and trading of fertilizers. NOTE 1: SIGNIFICANT ACCOUNTING POLICIES: a) BASIS FOR brPARATION OF FINANCIAL STATEMENTS: The financial statements have been brpared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable generally accepted accounting principles in India ("Indian GAAP"), the Accounting Standards ("AS") notified under Section 133 of the Companies Act, 2013 ("the Act"), 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). All the 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. The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. b) USE OF ESTIMATES: The brparation of the financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and the contingent liabilities as at the date of the financial statements and the results of the operations during the year. Management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods. c) FIXED ASSETS AND DEbrCIATION & AMORTIZATION: i) Tangible Fixed Assets: Fixed Assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated debrciation and impairment losses, if any. Cost comprises of the acquisition price/construction cost, cost of borrowings till the date of capitalization in the case of assets involving material investment and substantial lead time and any attributable expenditure incurred in bringing the asset to its working condition for the intended use. ii) Debrciation and amortization: (a) Tangible Assets, other than Land, are debrciated on a pro-rata basis on the Straight-Line method as per the useful life specified in Schedule II of the Companies Act, 2013 effective from 01st April, 2014. Accordingly, the unamortized carrying value as on 01.04.2014 of those assets whose useful lives is exhausted has been adjusted against Retained Earnings and the unamortized carrying value of remaining assets is debrciated over the remaining useful lives of the assets. (b) Intangible Assets is amortized on the basis of Straight-Line method. Specified software purchased is amortized over their estimated useful lives of three years. iii) Intangible Assets: Intangible Assets are stated at their cost of acquisitions less accumulated amortization and impairment losses, if any. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured. d) IMPAIRMENT OF ASSETS: The carrying amounts of assets are reviewed at each reporting date, if there is any indication of impairment based on internal / external factors. If the carrying amount of 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. e) FOREIGN CURRENCY TRANSACTIONS AND FORWARD CONTRACTS: i) Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of transaction. Foreign currency monetary items are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise. ii) In respect of forward exchange contracts entered into to hedge risks associated with foreign currency fluctuation on its existing assets and liabilities, the brmium or discount at the inception of the contract is amortized as income or expense over the period of the contract. Any profit or loss arising on cancellation of such forward exchange contracts is recognized as income or expense in the Statement of Profit and Loss of the year. f) INVESTMENTS : Long term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at lower of cost and fair value. g) INVENTORIES: i) Raw materials, stores and spares and packing materials are valued at cost (net of input credits) or net realizable value whichever is lower calculated on first-in-first-out (FIFO) basis. ii) Finished goods including those held for captive consumption and work- in-process are valued at cost or net realizable value whichever is lower, calculated on weighted average basis. Cost comprises of material, labor, power, debrciation, excise duty payable/paid wherever applicable and appropriate portion of overheads incurred in bringing the inventories to their brsent location & condition. iii) Stock in trade is valued at cost (net of input credits) or net realizable value whichever is lower, calculated on first-in-first-out (FIFO) basis. iv) Scrap and Agricultural produce is valued at Net Realizable Value. h) REVENUE RECOGNITION: i) Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding amount of consideration & collectivity. Sales include amounts recovered towards excise duty and exclude sales tax/value added tax. ii) Subsidy is recognized on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilizers sold by the Company for the period for which notification has been issued. iii) Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when services are rendered. iv) Dividend income from investments is recognized when right to receive is established. v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and transactional interest rate applicable. i) EMPLOYEES BENEFITS: i)Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered. ii) The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the company makes monthly contributions at a specified percentage of the covered employees' salary. The contributions as specified under the law are paid to the Regional Provident Fund Commissioner and the Central Provident Fund under the Pension scheme. The company recognizes such contributions as expense of the year in which the liability is incurred. iii) The provision for Gratuity Liability is provided for eligible employees during the year on accrual basis. j) BORROWING COSTS: Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss. k) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS: i)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. ii) Contingent liabilities disclosed for a. possible obligation which will be confirmed only by future events not wholly within the control of the Company or b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. iii) Contingent assets are neither recognized nor disclosed in the financial statements. l) TAXES ON INCOME: i) Current tax is determined as the amount of tax payable in respect of taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. ii) Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset, if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. iii) Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence. m) SEGMENT REPORTING i) Business segment The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 "Segment Reporting" is considered the only business segment. ii) Geographical segment The Company sells its products only within India where the conditions brvailing are uniform. Hence, no separate geographical segment disclosure is necessary. n) EARNINGS PER SHARE: Basic earnings per shares has been calculated by dividing profit for the year attributable to equity shares holders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per shares are the same. ject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders will be entitled (b) Reconciliation of Number of Shares to receive the remaining assets of the company after distribution of all brferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. 2 Micro, Small and Medium Enterprises: There are no dues outstanding to Micro, Small and Medium Enterprises beyond the due date as at the Balance Sheet date. The above information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors. 3 Prior period items amounting to Rs. 89,097/- (Previous year Rs. 21,91,555/-) include short or excess provision for taxes, revenues and expenses. 4 Previous year's figures have been regrouped and reclassified, wherever required. 5 Figures have been rounded off to the nearest rupee. As per our report of even date For: Jhavar Ladha & Associates Chartered Accountants Firm Registration No.: 104223W CA Jaiprakash S. Falor Partner Membership No. 043337 For and on behalf of the Board Omprakash K. Gilda Managing Director Deepak S. Maliwal Director Arun R. Toshniwal Director Place: Nanded Dated: 30th May, 2015 |