1) BASIS OF ACCOUNTING:
These financial statements have been prepared to comply in all material
aspects with the Accounting Standards notified by Companies (Accounting
Standards) Rules, 2006 (as amended) and relevant provisions of the
Companies Act 1956, read with General Circular No 15/2013 dated 13th
September 2013, issued by the Ministry of Corporate Affairs in respect
of Section 133 of the Companies Act 2013 All Incomes and Expenditures
having material bearing on the Financial Statements are recognized on
2) USE OF ESTIMATES:
The presentation of the Financial Statements, in conformity with the
Generally Accepted Accounting policies, require the management to make
estimates and assumptions that affect the reported amount of Assets and
Liabilities, Revenues and Expenses and disclosure of contingent
liabilities. Such estimation and assumptions are based on management''s
evaluation of relevant facts and circumstances as on date of Financial
Statements. Difference between the actual results and estimates are
recognized in the period in which the results are known / materialized.
3) REVENUE RECOGNITION:
Sales are stated net of rebate and trade discount. It excludes Central
Sales Tax and State Value Added Tax. With regard to sale of products,
income is reported when practically all risks and rights connected with
the ownership have been transferred to the buyers. This usually occurs
upon dispatch of the goods.
Interest on deposits is recognized on accrual basis.
4) FIXED ASSETS AND DEPRECIATION:
Fixed Assets are stated at cost of acquisition or construction, net of
accumulated depreciation, cenvat credit and adjustments arising from
exchange rate variations relating to borrowings attributed to fixed
assets. Cost includes incidental expenses capitalized from time to time
on their due recognition, trial run expenses and interest attributable
to the project till the date of commissioning.
The company has provided depreciation on all Fixed Assets on Written
Down Value Method on pro-rata basis in accordance with the Section 205
(2)(a), at the rates specified in Schedule XIV of the Companies Act
5) BORROWING COST:
Borrowing costs are recognized in the period to which they relate,
regardless of how the funds have been utilized, except where it relates
to the financing of construction or development of assets requiring a
substantial period of time to prepare for their intended future use.
Interest on borrowings if any is capitalized up to the date when the
asset is ready for its intended use. The amount of interest capitalized
for the period is determined by applying the interest rate applicable
to respective borrowings.
Inventories of goods traded is valued at lower of cost or net
realizable value. Cost is determined on first-in-first-out basis. Cost
includes cost of material and other related expenses.
7) EMPLOYEES RETIREMENT BENEFITS:
(a) Short Term
Short Term employee benefits are recognized as an expense at the
undiscounted amount expected to be paid over the period of services
rendered by the employees to the company.
(b) Long Term
The Company has both defined contribution and defined benefit plans, of
which some have assets in approved funds. These plans are financed by
the Company in the case of defined contribution plans.
Defined Contribution Plans
These are plans in which the Company pays pre-defined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to Employees
Provident Fund. The Company''s Payments to the defined contributions
plans are reported as expenses during the period in which the employee
perform the services that the payment covers.
Defined Benefit Plans
Expenses for defined benefit gratuity payment plans are calculated as
at the balance sheet date by independent actuaries in the manner that
distributes expense over the employees working life. These commitments
are valued at the present value of the expected future payments, with
consideration for calculated future salary increases, using a
discounted rate corresponding to the interest rate estimated by the
actuary having regard to the interest rate on Government Bonds with a
remaining term i.e. almost equivalent to the average balance working
period of employees.
Other Employee Benefit
Compensated absences which accrue to employees and which can be carried
to future periods but are expected to be encashed or availed in twelve
months immediately following the year end are reported as expenses
during the year in which the employees perform the services that the
benefit converts and the liabilities are reported at the undiscounted
amount of the benefits after deducting amounts already paid.
8) IMPAIRMENT OF ASSETS:
The carrying value of assets of the Company''s cash generating units are
reviewed for impairment annually or more often if there is an
indication of decline in value. If any indication of such impairment
exists, the recoverable amount of those assets are estimated and
impairment loss is recognized, if the carrying amount of those assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the estimated future cash flows to their
present value based on appropriate discount factor. Net selling price
is the estimated selling price in the ordinary course of business, less
estimated cost of completion and to make the sale.
As per the assessment conducted by the Company at March 31, 2014, there
were no indications that the fixed assets have suffered an impairment
A provision for Current Tax has been made at the current tax rate based
on assessable income or on the basis of Sec. 115JB of the Income Tax
Act, 1961 (Minimum Alternative Tax), whichever is higher.
Deferred Tax resulting from timing differences that are temporary in
nature between accounting and taxable profit is accounted for, using
the tax rates and laws that have been enacted as on the Balance Sheet
date. The deferred tax asset is recognized and carried forward only to
the extent that there is a reasonable or virtual certainty, as the case
may be, that the asset will be realised in future.
10) EARNING PER SHARE:
Basic earning per share is calculated by dividing the net profit after
tax for the year attributable to Equity Shareholders of the Company by
the weighted average number of Equity shares outstanding during the
year. Diluted earning per Share is calculated by dividing net profit
attributable to equity shareholders (after adjustment for diluted
earnings) by average number of weighted equity shares outstanding
during the year.
11) CASH FLOW STATEMENT:
The Cash Flow Statement is prepared by the Indirect Method set out in
Accounting Standard 3 on Cash Flow Statement and presents the cash
flows by operating, investing and financing activities of the Company.
Cash and Cash equivalents presented in Cash Flow Statement consist of
cash on hand and demand deposits with banks.
12) PROVISIONS AND CONTINGENT LIABILITIES:
A provision is recognized when the Company has a present 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
(excluding long term benefits) are not discounted to its present value
and are determined based on best estimated 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 estimates.
Contingent liabilities are not recognized but are disclosed in the
notes to the Financial Statements. A contingent asset is neither
recognized nor disclosed.
(b) Terms/rights,preferences and restrictions attached to securities:
The company has one class of equity shares having a par value of Rs.10
each. Each share holder is eligible for one vote per share held. In the
event of liquidation, the equity share holders are eligible to receive
the remaining assets of the company after distribution of all
preferential dues, in proportion to their shareholding.
VIII. Expected Employer''s contribution for the next financial year
On the basis of previous year''s trend, company is expecting to
contribute the same amount as in 2014-15 to the defined contribution
However, for the defined benefit plan company is not liable to
contribute any amount as the plans are unfunded.
The estimate of rate of escalation in salary is considered in actuarial
valuation, taking into account inflation, seniority, promotion and
other relevant factors including supply and demand in the employment
market. The above information is certified by the actuary.