1.1. Accounting convention
The financial statements of the Company are prepared under historical
cost convention on an accrual basis and comply with the Accounting
Standards (''AS'') notified by the Companies (Accounting Standards)
Rules, 2006 except otherwise mentioned elsewhere in the financial
1.2. Use of Estimates
The preparation of financial statements requires the Management to make
estimates and assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities, if any) as at the
date of the financial statements and the reported income and expenses
during the reporting period like provisioning for taxation, useful
lives of assets etc. Management believes that the estimates used in the
preparation of financial statements are prudent and reasonable. Future
results may vary from these estimates.
1.3. Revenue Recognition
On sale of goods
Sales of the Company comprise sale of BOPP tapes, ropes and adhesives.
Revenue is recognized when the risks and rewards are substantially
transferred to the buyer. This usually occurs when the goods leave the
premises of the Company.
Interest income is recognized on accrual basis.
1.4. Expenses and incomes
Expenses and incomes are accounted for on accrual basis except for
bonus to employees. Bonus to employees is accounted for on payment
basis. Provisions are made for all known liabilities.
1.5. Fixed Assets and Depreciation
Fixed assets acquired by the Company are reported at acquisition value
with deductions for accumulated depreciation.
The acquisition cost includes the purchase price, taxes (which are not
subsequently recoverable from the tax authorities), duties, freight and
incidental expenses related to the acquisition and installation of the
asset. Examples of incidental expenses are delivery and handling costs
and installation services.
Fixed assets are depreciated on Straight Line Method (''SLM'') at the
rates prescribed by Schedule XIV of the Companies Act, 1956.
Depreciation is charged on a prorata basis on additions made during the
year. Assets costing below Rs. 5000 are expensed out in the year of
1.6. Foreign exchange transactions
Transactions in foreign currency are booked at standard rates
determined periodically, which approximate the actual rates.
Cash and bank balances, receivables and liabilities (monetary items) in
foreign currencies as at the year end are revalued at year end rates
and the unrealized translation differences are included in the
Statement of Profit and Loss.
Gain or loss on acquisition of fixed assets
Gain/loss arising out of fluctuations on realization/payment or
restatement, except those identifiable to acquisition of fixed assets
is charged/credited to the Statement of Profit and Loss. Gain/loss on
account of exchange fluctuations identifiable to fixed assets acquired
are adjusted against the carrying value of the related fixed asset.
Raw materials, consumable and packing materials, semi finished goods
and finished goods are valued at cost or net realizable value,
whichever is lower.
Cost includes freight, taxes and duties (other than those subsequently
recoverable from the tax authorities) and all other expenses incurred
on bringing the inventory to its present location and condition.
Inventory is valued on weighted average basis.
Cenvat credit for materials purchased for production is taken into
account at the time of purchases. Cenvat credit on purchases of capital
items wherever applicable is recognized when the asset is purchased.
The Cenvat credit so taken is utilized for the payment of excise duty
on goods manufactured. The unutilized Cenvat credit is carried forward
in the financial statements.
1.8. Segment reporting
The Company is primarily engaged in manufacture of Ropes and BOPP
Although these two businesses represent separate business segments,
Accounting Standard 17 - Segment Reporting issued by the Institute of
Chartered Accountants of India is not applicable to the Company.
1.9 Taxes on income
Income tax is computed in accordance with Accounting Standard 22 -
''Accounting for Taxes on Income'' (''AS - 22''), notified by the Companies
(Accounting Standards) Rules, 2006. Tax expenses are accounted in the
same period to which the revenue and expenses relate.
Deferred tax assets, other than unabsorbed depreciation or carried
forward losses, are recognized only if there is reasonable certainty
that they will be realized in the future and are reviewed for the
appropriateness of their respective carrying values at each Balance
1.10 Contingent liabilities
The following are the contingent liabilities outstanding as at the
balance sheet date.
Income Tax demand for Rs. 5.64 lakhs has been raised by the Assessing
officer for the AY 1995 - 96. The Company has disputed the demand and
preferred an appeal before Income Tax (Tribunal). The Company is not
aware of the outcome of the appeal. We are therefore, unable to comment
on the matter.
1.11 Since the Directors (including the Managing Director) are not
drawing any commission, computation of commission for the year ended 31
Mar 2012 as prescribed by sections 198, 309, 349 and 268 read with
schedule XIII of the Companies Act, 1956 is not applicable.
1.12 The format of Balance Sheet and Statement of Profit and Loss has
been revised. Hence, previous year figures have been regrouped wherever
necessary so as to enable comparison with the figures of the current
1.13 Related Party Disclosures
Related Party disclosures are given according to Accounting Standard 18
Related Party Disclosures.
Sl. Name of the party Relationship
1. Sonal Impex Limited Associate
2. Sonal Filaments Limited Associate
3. Sonal Ropes Limited Associate
4. Zain Fresh Agro Limited Enterprise over which
Key Management Personnel
are able to exercise significant
5. Sandeep Arora Key Management Personnel
6. Kamal Arora Key Management Personnel
7. Mona Arora Key Management Personnel