ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2016 1 Significant Accounting Policies : 1.1 Basis of Accounting These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of Companies Act 2013 read with rule 7 of Companies ( Accounts ) Rules 2014 , till the Standard of Accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 2013.The Ministry of Corporate Affairs( MCA) has notified the Companies (Accounting Standards) Amendment Rules, 2016 vide its notification dated 30 March 2016. The said notification read with Rule 3(2) of the Companies (Accounting Standards) Rules, 2006 is applicable to accounting period commencing on or after the date of notification i.e. 1 April 2016. 1.2 Use of Estimates The brparation of financial statements requires the management of Company to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialized. Though the management believes that the estimates used are prudent and reasonable, actual results could differ from these estimates. 1.3 Fixed Assets a) Fixed assets are stated at cost, unless stated otherwise. Cost comprises the purchase price and attributable expenses. b) Impairment of Assets: Impairment of an asset is reviewed and recognised if the event changes and circumstances indicate that the carrying amount of an asset is not recoverable. Difference between the carrying amount of an asset and the recoverable value is recognised as impairment loss in the statement of profit and loss in the year of impairment. c) Capital work in progress: Capital work in progress is stated at the amount expended up to the date of balance sheet, and expenditure incurred during construction period: 1.4 Borrowing Costs Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of 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 statement of profit and loss. 1.5 Debrciation on Fixed Assets a) Pursuant to the enactment of the Companies Act, 2013 (“the Act”), the company has, effective from April 1, 2014 reassessed the useful life of its fixed assets and has computed debrciation with reference to the useful life of the assets as recommended in schedule II of the Act. However as per the valuation report dated 20 January 2015, certified by Mr. Vikas J. Bardapurkar, useful life of the some of the assets have been assessed as ranging between 25 and 60 years which is different then the life brscribed under schedule II of the Act and debrciation is computed accordingly. b) Leasehold improvements are debrciated over the unexpired period of respective leases or useful life whichever is shorter. 1.6 Investments Investments intended to be held for more than a year, from the date of acquisition, are classified as long-term and are stated at cost. Provision for diminution in value of investments is made to recognize a decline other than temporary. Current Investments are stated at cost or fair value whichever is lower. 1.7 Revenue Recognition a) Sale of goods is recognized when the risks and rewards of ownership are passed on to the customers, which is generally on dispatch. Export Sales are accounted for on the basis of date of bill of lading. Gross Sales include excise duty, adjustments for price variation, quality claims, liquidated damages and exchange rate variations related to export realization. b) Export benefits: Duty Drawback is accounted on accrual basis. c) Revenue from Services is recognized when the services are completed. d) Dividend income is recognized when the right to receive the dividend is unconditional. 1.8 Inventory Inventories are valued at lower of cost or net realizable value. 1.9 Operating Lease Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating lease are recognized as an expense on accrual basis in accordance with the respective lease agreements. 1.10 Foreign Currency Transactions a) Foreign exchange transactions are converted into Indian Rupees at the brvailing rate on the date of the transactions. Current monetary assets and liabilities are translated at the exchange rate brvailing on the last day of the year. Non monetary items are carried at cost. b) Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss. The exchange differences arising on settlement / restatement of long-term foreign currency monetary items are capitalised as part of the debrciable fixed assets to which the monetary item relates and debrciated over the remaining useful life of such assets. c) Premium / discount on forward exchange contracts not relating to firm commitments or highly probable forecasted transactions and not intended for Trading or Speculation purpose is amortized as income or expense over the life of the contract. 1.11 Accounting for Taxes on Income a) Current tax is determined as the amount of tax payable in respect of taxable income of the year computed as per the Income Tax Act, 1961. b) Deferred tax is recognized subject to consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using brvailing enacted or substantively enacted tax rates. 1.12 Employee Benefits a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. b) Post employment and other long-term benefits are recognized as an expense in the statement of Profit and Loss of the year in which the employees has rendered services. The Expense is recognized at the brsent value of the amount payable determined using actuarial valuation technique.Actual gain and losses in respect of post employment and other long term benefits are recognized in the statement of profit and loss. c) Payments to defined contribution retirement benefits schemes are charged as expenses as and when they fall due. 1.13 Research & Development Capital expenditure on research and development is treated in the same manner as fixed assets. Revenue expenditure on research and development is charged to Statement of Profit and Loss. 1.14 Provisions & Contingent Liabilities A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed in the financial accounts. Contingent assets are not recognized or disclosed in the financial statements. 1.15 Earning Per Share The Company reports basic and diluted earnings per equity share in accordance with AS 20, Earnings per Share. Basic earnings per equity share have been computed by dividing net profit after tax (after adjusting for dividend on cumulative brference shares) attributable to equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per share is computed using the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where results would be anti-dilutive. 2 Notes To Accounts 2.1 Other Additional information required as per Schedule III to the Companies Act, 2013 are as under: 2.1 Disclosure as per new amendments in Schedule III in respect of Micro Small & Medium Enterprises Development Act, 2006: There are no dues to Micro, Small and Medium Enterprises as defined under "The Micro, Small and Medium Enterprises Development Act, 2006" as at March 31,2016. This information has been determined to the extent such parties have been identified on the basis of the information available with the Company. 2.2 The buyer's credit has been taken for the import of Capital goods under term loans sanctioned by the banks, repayment thereof shall be as per terms of sanction as specified in note 2.3.2 (a). 2.3 The Company has filed case on 2 vendors for recovery of advances aggregating to Rs. 10 Lacs with Judical Magistrate Court, Chalisgaon. 2.4 The Company was awarded a arbital award ( "the Award") for the sum of Rs.. 114.78 Lacs from the Central Organisation Railway Electrification ("CORE") and Rs. 098 Lacs towards cost of the Company through Arbitration Order dated January 19,2014. CORE has filed an Arbitration Case No. 478 of 2014 before Court of District Judge, Allahabad for setting aside the Award, and also allowing a sum of Rs. 120 Lacs, withheld by CORE, from our Company, towards the Risk Purchase Notice. Our Company has filed a Counter- Claim Petition in the said Arbitration case claiming from CORE, the sum of Rs. 120 Lacs plus a sum of Rs. 57.35 Lacs being interest at the rate of 18% till date of filing. 2.5 Pursuant to Accounting Standard 26 - "Intangible Assets", the Purchased goodwill in the balance sheet as at March 31, 2014 is written off during the year ended March 31,2015. 2.6 Figures for the brvious year have been re-grouped/re-classified wherever necessary As per our report of even date attached For Sureka Associates Chartered Accountants Firm Registration No:110640W Suresh Sureka Partner Membership No:34132 For and on behalf of the Board of Directors Manging Director Murarilal Mittal DIN: 00010689 Chief Financial Officer Rakesh Kumar Jain PAN: ABBPJ5834H Director Sushil Sharda DIN:03117481 Company Secretary Shailesh Rakhasiya PAN: ALUPR5390R Date : 29th May, 2016 Place : Mumbai |