SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation of Financial Statements The financial statements are brpared in accordance with India Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which area measured at fair values. GAAP comprises mandatory accounting standards as brscribed under section 133 of the Companies Act, 2013 ('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). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use. (b) Use of Estimates The brparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the useful lives of fixed tangible assets and intangible assets. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the stimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and , if material, their effects are disclosed in the notes to the (c) Revenue Recognition Revenue on sale of products is recognised when the products are delieveried to customers, all significant contractual obligations have been satisfied and the collection of the resulting receivable is reasonably expected. Sales are stated net of trade discount, returns and taxes collected. (d) Provisions and contingent liabilities A provision is recognized, if, as a result of a past event, the Company has a brsent legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Contingent Liabilities rebrsents claims against the company not acknowledged as debts includes, a)the appeal lying with DCCT (A), Commercial Tax Department, Gujarat for demand of Rs.2.28 lacs of FY 2010-11 (net of tax paid of Rs.0.57 lacs), b) the appeal lying with DCCT (A), VAT Department, Gujarat for demand of Rs.1.78 lacs of FY 2009-10 (net of tax paid of Rs.0.44 lacs) & b) the Appeal lying with The CESTAT, Ahmedabad for demand of Rs.2.16 lacs (net of tax paid of Rs.0.25 lacs). (e) Fixed Assets & Debrciation thereon i) Fixed assets are stated at cost of acquision as reduced by accumulated debrciation. The cost of assets includes other direct/ indirect and incidental cost incurred to bring them into their brsent location. ii)Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in respect of plants & machinaries where useful life of some Machineries is technically assessed as 25 years in place of 15 years based on Chartered Engineer's certificate. The written down value of Fixed Assets whose lives have expired as at 1st April 2015 have been adjusted, in the opening balance of Profit and Loss Account amounting to Rs.8,682/-. (f) Retirement benefits to employees - Gratuity The company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment with the company. Excess Gratuity provision of Rs.225,191/-, due to retirement of employees before completing their service tenure of 5 years, has been reversed & shown as exceptional items in the profit & loss account. - Provident Fund Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. (g) Foreign currency transactions Foreign currency denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance sheet date. The gains or losses resulting from such translations are included in the statement of profit & loss. Revenue, expense and cash-flow items denominated in foreign currencies are translated using the exchange rate in effect on the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which The net foreign exchance gain of Rs.1,17,838/- has been credited to the profit & loss account, (brvious year net foreign exchange loss Rs.6,847/-) (h) Inventories Inventories are stated at lower of cost or net realisable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. We have not physically verified the inventories. The value of the inventories is taken as per information & explanation given by the management. (i) Provision for Current Tax & Deferred Tax Provision for income tax is made on the basis of estimated taxable income for the year at current rates. Tax expenses comprises of Current Tax, Fringe Benefit Tax and Deferred Tax at applicable enacted or substantively enacted rates. Current Tax rebrsents the amount of Income Tax payable/recoverable in respect of the taxable income/loss for the reporting period. Deferred Tax rebrsents the effect of timing difference between taxable income and accounting income for the reporting period that originates in one period and are capable of reversal in one or more subsequent periods. The Deferred Tax asset is recognized and carry forward to the extent that there is a reasonable certainty that the assets will be realise in future. However, where there is unabsorbed debrciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of assets. (j) Earnings per share Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders (after deducting tax expenses) by the weighted average number of equity shares outstanding during the period. (k) Current Assets, Loans and Advances & Liabilities In the opinion of the Board of Directors, the Current Assets, Loans and Advances and Current Liabilities are approximately stated if realized in the ordinary course of business. As no confirmatory letters were submitted from Debtors and Creditors, their balances are reflected in the Balance Sheet as appearing in the books. The provisions for all other liabilities is adequate and not in excess of the amount reasonably necessary. (I) Foreign Exchange Earning and Outgo The foreign Exchange Remittances of the company in terms of exports of goods during the year is Rs.83.74 lacs. (Previous year - Rs.81.15 lacs). The foreign Exchange Outgo during the year was Nil. (Previous year- Nil). (m) Regrouping of Previous Year figures The brvious year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.Amount and other disclosures for the brceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year. (n) Rounding off of figures Figures have been rounded off to the nearest rupee. For, J. A. Sheth & Associates Chartered Accountants Firm Reg. No.119980W (Jingal A. Sheth) Proprietor M.No.107067 For and on behalf of Board of directors of ULTRACAB (INDIA) LIMITED Nitesh P. Vaghasiya Managing Director DIN:01899455 Pankaj V. Shingala Whole Time Director DIN: 03500393 Sangeetaben N. Vaghasiya Director, DIN: 06910845 Diljeet G. Bhatti Chief Financial Officer Mayur P. Gangani Company Secretary Place : Rajkot Date : 28.05.2016 |