Note 1 SIGNIFICANT ACCOUNTING POLICIES: i. Accounting Conventions: The financial statements of the company have been brpared in accordance with the Generally Accepted Accounting Principles in India (GAAP) under historical cost convention on accrual basis except for certain financial instrument which are measured at fair values to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013 ("the Ac") read with rule 7 of the Companies (Accounts) Rules, 2014, the provision of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. ii. Use of Estimates: Preparation of financial statements in conformity of with Indian GAAP requires that the Management of the Company to makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of assets and liabilities and the assumptions relating to contingent liabilities as on the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligation in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known and if material, their effects are disclosed in the notes to the financial statements. iii. Valuation of Inventories: Raw materials, stores and packing materials are valued at lower of cost or net realizable value. Cost is assigned on FIFO basis. Semi - finished goods are valued at raw material cost plus proportionate manufacturing overheads. Finished goods are valued at lower of the cost or net realizable value. Unrealized profit, if any, in inter unit transaction is eliminated to the extent possible. iv. Cash Flow Statement: Cash flows are reported using indirect method, whereby profit/(loss) before extraordinary item and tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future, cash receipts or payments. The cash flow from operating,investing and financing activities of the company are segregated based on the available information v. Debrciation / Amortization: Debrciation on tangible fixed assets is provided on the straight line method as per useful life brscribed in Schedule II of the Act Debrciation on addition/deletion of assets during the yearis provided on pro-rata basis. Brand will be amortized over a period of five subsequent years on a systematic basis as decided by the management at the rate of 20% in each year. vi. Revenue Recognition: The Company recognizes revenue on sale of products upon dispatch to the customer or when delivered to the ocean carrier for export sales, which is when risks and rewards of ownership are passed to the customer. Sales are shown net of returns, discounts, excise duty and sales tax. a) Dividend income on investment is accounted for in the year in which the right to receive the payment is established. b) Interest income is recognized on the time proportion basis taking into account amount outstanding and interest rate applicable. c) The Company recognizes revenue on sale of products upon dispatch to the customer or when delivered to the ocean carrier for export sales, which is when vii. Export Incentives: Considering the uncertainty in respect of actual income realizable, which depends on the market conditions, the benefits accruing under the Duty Entitlement Pass Book Scheme are recognized on the basis of actual realization. viii. Foreign Currency Transactions: Transactions in foreign currency are recorded at the rate of exchange in force at the time transactions are affected. Exchange differences arising on settlement of these transactions are recognized in the Statement of Profit and Loss. Monetary items (other than those related to acquisition of fixed assets) denominated in foreign currency are revalued using the exchange rate brvailing at date of the Balance Sheet and resulting exchange difference is recognized in the Statement of Profit and Loss. Non monetary foreign currency items are carried at cost. ix. Investments: Non Current Investments are stated at cost.Provision for diminution in the value is made only if such a decline is other than temporary. Current investments are carried at lower of cost or fair value/market value,determined on individual basis. x. Employee Benefits: a) Short Term Employee Benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, leave salary etc. and the expected cost of ex-gratia are recognized in the period in which the employee renders the related service. b) Post-Employment Benefits: i) Defined contribution plans: A defined contribution plan is a post-employment benefit plan under which the company pays specified contributions to the separate entity. The Company makes specified monthly contributions towards employee provident fund. The Company's contribution paid / payable under the schemes is recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service. ii) Defined benefit plan: The Company's gratuity benefit scheme is a defined benefit plan. The Company contributes to a gratuity fund which has taken a group policy with Life Insurance Corporation of India for future payments of gratuity to retiring employees.The brmium has been so adjusted as to cover the liability under the scheme in respect of all employees at the end of their future anticipated services with the company. c) Leave encashment: Liability on account of Leave Encashment up to year end has been provided/ paid during the year. None of the employee is allowed to carry forward leave to subsequent period. xi. Borrowing Cost: Borrowing Costs that are attributable to acquisition or construction of a qualifying asset are capitalized as a part of the cost of such asset. A Qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss. xii. Leases: Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with respective lease agreements. xiii. Earning per share: Basic earning per share is computed by dividing the profit/(loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing profit/(loss) after tax as adjusted for dividend,interest and other charges charges to expense or income relating to the dilutive potential euity shares by the weighted average number of equity shares considered for deriving basic esrning per share and the weighted average number of equity shares which could have been issued on the conversion at all dilutive potential equity shares. xiv. Taxes on Income: Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income tax Act, 1961 and other applicable tax laws. Deferred tax is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period nad are capable of being reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deffered tax liabilities are recognized for the timing differences. Deferred tax assets are recognized for timing difference of items other than unabsorbed debrciation and carry forward losses only to the extent that reasonable certainity exists that sufficient future taxable income will be available against which these can be realised. However if there are unabsorbed debrciation and carry forward losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainity supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by same governing tax laws and the company has a legally enforceable right for such setoff. Deferred tax assets are reviewed at each balance sheet date for their realisability. xv. Impairment of Fixed Assets: At each Balance Sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their brsent value using a br-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. xvi. Contingent Liability: The Company creates a provision when there is a brsent obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not result in outflow of resources. When there is a possible obligation or brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. xvii. Financial Derivatives Hedging Transaction: In respect of derivatives contract, brmium paid, provision for losses on restatement and gains/losses on settlement are recognized in statement of Profit and Loss. The company uses Foreign Currency Hedges to manage its risks associated with Foreign Currencies Fluctuation relating to Export receivable. The company does not use Hedges for speculative purpose. Note 2 Contingent Liability: In the opinion of the Board of directors, the Company has no contingent liability (PY : Nil) Note 30 In the opinion of the management, current assets, loans, advances and deposits are approximately of the value stated, if realized in the ordinary course of business. The provision of all known liabilities is adequate and not in excess of the amount reasonably necessary. Note 3 Balances of certain trade receivables, trade payables and loans and advances are subject to confirmations / reconciliation and consequential adjustments, if any. The management does not expect any material variation affecting the current year's financial statements on account of such reconciliation / adjustments. Note 4 Disclosure under MSMED Act, 2006: The Company has not received any information from the "suppliers" regarding their status under the Micro Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to the amounts as at year end together with interest paid / payable as required under the said act have not been given. Note 5 Segment Reporting: Primary Segment (Business): The Company operates in single business segment of manufacture and sale of exercise note books and paper. Hence, further disclosure required as per Accounting Standard AS-17 "Segment Reporting" is not given. Note 6: Employee benefits 1. Defined contribution plans: The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Provident fund contributions amounting to Rs.12.66 Lacs (2014: Rs.9.72 Lacs) have been charged to the Statement of Profit and Loss. The contributions payable to this plan by the Company is at rates specified in the rules of the scheme. 2. Defined benefit plans The Company has a defined benefit gratuity plan. Every employee who has completed continuous service for five years or more gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy. During the year gratuity benefit expense of Rs.7 lacs recognised in the Statement of profit and loss. Due to non-availability of Actuarial valuation report, the charge for the year and liability as on balance sheet date were derived based on the past trend of attrition, increase in compensation cost and other relevant factors. Note 7 On 14th November 2014, the Board of Directors announced a plan to permanently close down Nagpur Paper Unit subject to the completion of necessary formalities. This is not a separate segment as per AS 17, Segment Reporting. The disposal is consistent with the Company's long-erm strategy to focus its activities at Palghar unit. The Company is actively seeking a buyer for the plant & machineries and other fixed assets at Nagpur unit and hopes to complete the sale by the end of March 2016. At 31st March 2015, the carrying amount of the assets of the Nagpur unit was Rs.3279.31 lakhs (brvious year Rs. 6000.42 lakhs) and its liabilities were Rs.Nil lakhs (brvious year Rs. Nil lakhs). In the opinion of the Board of Directors, the assets have a value on realization at least equal to the amounts at which they are states in the Balance Sheet. Note 8 Previous year figures have been re-grouped/re-classified wherever considered necessary to compare with current year figures. As per our report of even date attached For Bhuta Shah & Co. Chartered Accountants Firm Regn. No. 101474W CA. Sailesh Bhuta Partner Membership No. 033958 For and on behalf of the Board and Directors Amrut P. Shah Chairman & Managing Director Shantilal P.Shah Whole-time Director Rajesh B. Jain Chief Financial Officer Manik R. Makwana Company Secretary Mumbai, 21stMay, 2015 |