Note 1 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (ATTACHED TO AND FORM PART OF ACCOUNTS) FOR THE YEAR ENDED 30TH JUNE, 2015 1. Significant accounting policies 1.1 Basis of accounting and brparation of financial statements The financial statements are brpared under historical cost convention, on a going concern basis and on accrual basis and are in compliance with the accounting standards notified under section 133 of the Companies Act, 2013 and the relevant provisions thereof. 1.2 Use of estimates The brparation of the financial statements requires the Management to make certain estimates and assumptions that affect the amount reported in financial statements and notes thereto.Differences between the actual results and estimates are recognized in period in which the results are known/ materialize. 1.3 Revenue Recognition and Accounting for Sales (a) Revenue from sales is recognized at the point of dispatch of goods to the customers when risk and reward stands transferred to the customers. Sales are net of trade discount, sales tax and excise duty. (b) Interest income is recognized on time proportion basis. (c) All expenses and income are accounted for on accrual basis. 1.4 Fixed Assets Fixed Assets are stated at cost less accumulated debrciation. The cost of fixed assets include their original cost of acquisition net of cenvat including taxes, freight and other incidental expenses related to acquisition and installation of the concerned assets. 1.5 Debrciation and amortization (a) Debrciation (including amortization) is provided on straight line method as per useful life method brscribed under Part C of Schedule II of the Companies Act, 2013. Leasehold Land is being amortized over the tenure of respective leases. (b) Additions/deletions during the year are debrciated pro-rata from the date of such addition/ deletion. The residual value of the asset has been taken to be 5 percent of the original cost of the asset. (c) Intangible assets are amortized over their estimated useful Life. 1.6 Inventories Raw Materials, Stores & Spares, Goods under process and Finished Goods are valued at cost or Net Realizable Value, whichever is lower. Waste and Scrap is valued at Net Realizable Value. Cost of inventories of Raw Materials and Stores and Spares is ascertained on FIFO Basis. Cost of goods under process and finished goods comprise of cost of materials, production overhead and debrciation on plant and machinery. Cost of material for this purpose is ascertained on First in First out basis. Provision for obsolescence in inventories is made, whenever required. 1.7 Investments Current investments are valued at lower of cost or fair market value. Noncurrent Investments are valued at cost. However, when there is a decline other than temporary in the value of a long term Investment, the carrying amount is reduced to recognize the decline. 1.8 Excise Duty Excise duty is paid on clearance of goods, but is accounted for in the books on accrual basis. Accordingly, provision for excise duty is made for goods lying in the Bonded Warehouse. 1.9 Employees' Benefits a) The liability for superannuation\pension Gratuity & Leave Encashment is accounted for on the basis of actuarial valuation in accordance with Accounting Standards -15 (Revised) issued by the Institute of Chartered Accountants of India. b) Retirement benefits in the form of Provident Fund and Superannuation/Pension Schemes are charged to the Profit and Loss Account for the year when the contributions to the respective funds are due. 1.10 Research and Development Capital Expenditure is shown separately under respective heads of fixed assets. Revenue expenses including debrciation are included under the respective heads of expenses. 1.11 Foreign Currency Transactions (a) Transactions in foreign currencies are recordedat the exchange rates brvailing on the date ofthe transaction. Foreign currency monetary assets and liabilities 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. (b) Non Monetary items denominated in the foreign currency are valued at the exchange rate brvailing on the date of transaction. (c) In the case of forward exchange contracts, the brmium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract as well as exchange difference on such contracts, i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception/last reporting date, is recognized as income/expense for the period. 1.12 Borrowing Cost Interest on borrowings are recognized in the Profit and Loss account except interest incurred on borrowings, specifically raised for Projects which is capitalized with the cost of the asset until such time the asset is ready to be put to use for intended purpose. 1.13 Tax on Income (a) Provision for Taxation is made on the basis of the taxable profits computed for the current accounting year (reporting year) in accordance with Income Tax Act, 1961. (b) Deferred Tax is recognized, subject to consideration of prudence, on timing difference, being difference between taxable income and accounting income/expenditure that originate in one period and are capable of reversal in one or subsequent year(s). Deferred taxes are reviewed for their carrying value at each balance sheet date. 1.14 Provisions and 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 possible that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes to Accounts. Contingent assents are neither recognized nor disclosed in the financial statements. 1.15 Impairment of Asset The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the profit and loss account. If at any subsequent balance sheet date there is an indication that a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at recoverable amount subject to a maximum of debrciated historical cost and is accordingly reversed in the profit and loss account. As per our report of even date attached A.C Gupta & Associates Chartered Accountants Firm Regd. No. 008079N Sd/- A.C Gupta (Partner) M.No. 8565 For & on Behalf of the Board of Directors Sd/- Mahesh Ochani Director Sd/- Daljit Singh Chahal Whole -time Director Sd/- Ritika Kamboj Company Secretary Sd/- Pawan Kumar Chief Financial Officer Place : Delhi Dated : 26th August, 2015 |