(A)SIGNIFICANT ACCOUNTING POLICIES 1. CORPORATE INFORMATION Magnum Ventures Limited is ISO 14000 certified Company is engaged in the business of manufacturing News Print paper & Duplex Board. The Company also running a 5 star hotel named "Country Inn & Suits by Carlson" at Sahibabad, Ghaziabad, UP. In this regard, Company had entered into Territory License Agreement with Country Inn & Suites by Carlson Inc USA through Country Development & Management Services Private Limited on 31st January 2007 for a period of 10 year from opening date i.e. February 2009. The Licence can be renewed for a further period of 10 years 2. BASIS OF brPARATION OF FINANCIAL STATEMENT a) The financial statements have been brpared under the historical cost convention and on the accounting principles of going concern. Accounting polices not specifically referred to otherwise are in accordance with the generally accepted accounting principles and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India. b) The brparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported balances of assets & liabilities and disclosure relating to contingent liabilities as at the date of financial statements and reported amount of income and expenses during the year. The management believes that the estimates used in brparation of financial statements are prudent & reasonable. Future results could differ from these estimates. c) The Company follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. d) The company is complying with the Accounting-Standards issued by the ICAI, as per the requirements of the Companies Act, 2013. 3. FIXED ASSETS AND DEbrCIATION a) Expenditure of capital nature are capitalised at cost comprising of purchase price (net of Excise duty, rebates and discounts) and any other cost which is directly attributable to bring the assets to its working condition for the intended use. All fixed assets are carried at cost less debrciation. But when an asset is scraped or otherwise disposed off, the cost and related debrciation are written off from the books of accounts and resultant profit or loss, if any is reflected in profit and loss account. The Company capitalized Inward Freight of Capital Asset at the end of month. Advances paid towards the acquisition or construction of fixed assets and the cost of assets not put to use as at reporting date are disclosed under capital work in progress. b) In Paper Division, Debrciation on fixed assets is provided on the basis of Written down Value method except on plant & machinery, turbine & Deinking Plant on which debrciation is charged on SLM, and Software is amortised in 5 years. For Hotel Division Assets, debrciation has been provided on the straight-line method at the rates and in the manner brscribed in schedule II to the Companies Act. 2013, Further Freight on Capital Asset installed and put to use has been capitalized at the end of month. 3. FOREIGN EXCHANGE TRANSACTIONS a) All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates brvailing at the Balance Sheet date as notified. The resultant gain / loss are accounted for in the Profit & Loss account. b) The outstanding foreign exchange transactions are stated at the brvailing exchange rate as on the date of balance sheet. c) Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates brvailing on the date of the transactions. 4. INVENTORY VALUATION a) Stock of raw materials, stores & spares are valued at, lower of purchase cost or net realizable value. b) W.I.P is valued including component of Waste Paper, Chemicals & Stores, Fuel and Other Manufacturing Overheads. Finished goods are valued at cost of production or net realisable value whichever is less. Cost for the purpose of valuation includes raw material consumption, manufacturing expenses and other appropriate overheads there on in accordance with AS-2 (Revised) issued by I.C.A.I. 5. REVENUE RECOGNITION a) Sales In Paper Division, Revenue on Sale of Newsprint and Duplex Board is recognized on the basis of dispatches from factory gates and inclusive of Excise Duty. In Hotel Division, Revenue from Banquet is recognized when billed on completion of guest's function, Revenue from Room is recognized at the time when the guest checkout. b) Interest Income Interest income is recognized as it accrues on a time proportion basis taking in to account the amount of investment and rate applicable. c) Misc Income It includes sale of sludge, discarded stores and scrap and revenue is recognized on the basis of dispatches from factory gates and inclusive of Excise Duty. 6. EXCISE DUTY Liabilities for Excise Duty occur and accounted for as when the raw materials get finished. 7. IMPAIRMENT OF ASSETS At the end of each year, the company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that impairment loss may have occurred and where the recoverable amount of any fixed asset is lower than the carrying amount, a provision for impairment loss on fixed assets is made for the difference. Recoverable amount is generally measured using discounted estimated cash flows. Post impairment, debrciation is provided on the revised carrying value of asset over its remaining useful life. Management is of the view that there is no such assets exists in the Company. 8. TAXATION Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax for timing difference between the book profits and tax profits is recognized using the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. 9. EARNING PER SHARE Basic EPS is calculated by dividing the net profit for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding the year is adjusted for events of bonus issue and share split. For the purpose of calculating Diluted Earningsper Share, the Net Profit for the year attributable to Equity Share holders and the weighted average number of equity shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares. The Company does not have any diluted equity shares at the year end. 10. PROVISION AND CONTIGENCIES A Provision is recognized when the company has a brsent legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (including retirement benefits) are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognized in profit & loss account but are disclosed in Notes to the Accounts. 11. borrowing cost Borrowing Cost that are attributable to the acquisition or construction of qualifying assets are capitalised 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. 12. RETIREMENT AND OTHER EMPLOYEE BENEFITS a. Defined Contribution Plan Retirement benefits in the form of provident fund & pension schemes whether in pursuance of law or otherwise is accounted on accrual and charged to profit and loss account of the year basis. The Company is regular in depositing these dues to the credit of appropriate authorities in due time. b. Defined Benefit Plan Employees Benefit has been recognized as required in accordance with Accounting Standard 15 'Employee Benefits' on the basis of Actuarial Valuation report for the year ended 31-03-2015 as annexed to Notes to account. Retirement benefits in the form of Gratuity is considered as defined benefit obligation and provided for on the basis of an actuarial valuation, using the projected unit credit method (PUC), as at the date of Balance Sheet. c. Other long-term benefits Leave Encashment are provided for on the basis of an actuarial valuation, using the projected unit credit method(PUC), as at the date of Balance Sheet. Actuarial gain/losses, if any, are immediately recognized in the Statement of Profit and Loss. d. Salary and other short term benefits The salary and other short term benefit i.e. Bonus etc is being paid to the employees when it becomes due. Actuarial assumptions in respect of provisions for gratuity and leave encashment at balance sheet date are as follows: 11. SUNDRY CREDITORS: As per the best available information with the company, No creditor has intimated their MSME status to us and accordingly there is no amount outstanding which is payable to small scale industrial undertaking. Further the company raised claim on its suppliers for Quality/Quantity/Rate Issues and an amount of Rs. 13,94,87,714/- included in Short term Loan and Advances as Claim Receivables. The amounts have not been realised so far and Company is regularly following up with them and is hopeful of recovery, the same has been considered as good for recovery. No provision has been created and as such company will take necessary steps for realising/recovering/adjustment for the claim as and when settled and the unrecoverable amount shall be charged in the profit & Loss Accounts. 12. DEFERRED TAX LIABILITY: In view of huge accumulated losses of the company and absence of virtual certainty regarding availability of future taxable income, the management has decided not to recognise any deferred tax assets for the year ended March 31, 2015. Further, as per the provisions of Accounting standard 22 Issued by The Institute of Chartered Accountant of India in the absence of virtual certainty of future taxable income and considering the losses, the existing deferred tax assets (net) of Rs 27,26,79,101 recognized in brvious years has been derecognized in the current year. 13. impairment of assets In accordance with Accounting Standard 28 'Impairment of Assets' issued by Institute of Chartered Accountants of India and made applicable from 1st day of April 2004, the company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business: there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts. 14. SEGMENT REPORTING The Company is having two segment Paper division and Hotel Division. The segment reporting of the company has been brpared in accordance with Accounting Standard -17 'Accounting for Segment Reporting' issued by Institute of Chartered Accountants of India. Primary - The Company has considered Business segments as primary format for segment reporting, namely Paper Division & Hotel Division. 17. The Accumulated losses of the company as on March 31, 2015 are more than the net worth of the Company. 18. The Company had filed a case against Shree Laxmipati Balajee (Trader) for recovery of One Crore before the Honb'le District Court Ghaziabad, Uttar Pradesh u/s 138 of Negotiable Instrument Act, 1881. 19. Previous year figure have been regrouped and reclassified wherever considered necessary to make them comparable to those of the current year. 20. All other information required to be given is either Nil or Not applicable. 21. Figures in {brackets} pertain to the brvious year. Note 1 to 22 formsan integral part of the Balance Sheet as at 31st March 2015and has been authenticated as such. As per our report of even date For and an behalf of the Board Of Directors Aggarwal& Rampal Chartered Accountants Firm Reg. No. 003072N Vinay Aggarwal (Partner) Membership No.082045 (Pradeep Kumar Jain) Managing Director (Abhey Jain) Director (Pramod Kumar Jain) (Chief Financial Officer) (Monisha Choudhary) (Company Secretary) Place: New Delhi Date:04.05.2015 |