Mar 31, 2014
I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements are prepared in accordance with the generally
accepted accounting principles in India (Indian GAAP) under the
historical cost convention on an accrual basis and are in compliance
with all material aspect the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")
read with the General Circular No. 15/2013 dated 13th September 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. The accounting policies have been consistently
applied by the company and are consistent with those used in the
previous year
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as up to
twelve months for the purpose of current and non-current classification
of assets and liabilities.
ii) USE OF ESTIMATES:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
iii) TANGIBLE FIXED ASSETS AND DEPRECIATION:
TANGIBLE FIXED ASSETS:
Tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
CAPITAL WORK IN PROGRESS:
Expenses incurred towards acquisition of fixed assets which have not
been installed or not put to use before the year end are disclosed
under capital work in progress and no depreciation has been provided on
that.
DEPRECIATION:
Depreciation on fixed assets is charged on straight-line method basis
in the manner and as per the rates and method provided in schedule XIV
of the Companies Act, 1956.
Depreciation on Assets added / disposed off during the year have been
provided on pro-rata basis with reference to the day of additions /
deletions from the respective day of purchase/sale.
iv) INTANGIBLE FIXED ASSETS AND AMORTISATION:
* Intangible assets are recognized where it is probable that the future
economic benefit attributable to the assets will flow to the Company
and its cost can be reliably measured.
* Intangible Assets are stated at acquisition cost, net of accumulated
amortisation and accumulated impairment losses, if any. Intangible
assets are amortised on a straight-line basis over their estimated
useful lives.
* Expenditure incurred on acquisition/development of intangible assets
which are not put/ready to use at the reporting date is disclosed under
intangible assets under development.
However there are no Intangible Assets for the year under
consideration.
v) IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying value of the
asset exceeds its recoverable value. An impairment loss is charged to
the Statement of Profit and loss in the year in which as asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
However, there is no such Impairment on Asset, for the year under
consideration.
vi) INVENTORY:
The Inventory is valued as under and as certified by the Management
* Raw Material and Consumables are valued at cost.
* Finished Goods are valued at Cost or Market Value whichever is lower.
Cost includes the cost of conversion and other costs incurred to bring
the inventories to their present location and condition.
* Obsolete stock if any is valued at net realisable value. However
there is no obsolete stock in the year under consideration.
* Work in progress is valued at cost which includes the cost of
conversion and other costs incurred to bring the inventories to their
present location and condition.
vii INVESTMENTS:
Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
Investments are recorded at cost on the date of purchase, which
includes acquisition charges such as brokerage, stamp duty, taxes, etc.
Current Investments are stated at lower of cost and quoted/fair value.
Provision for diminution in the value of Long Term Investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
However there are no investments of the company in the year under
consideration.
viii) GOVERNMENT GRANTS
Government Grants are recognized when there is reasonable assurance
that the same will be received and all attaching conditions will be
complied with. Revenue grants are recognized in the Statement of Profit
& Loss account. Capital grants relating to specific Tangible/Intangible
assets are reduced from the gross value of the respective
Tangible/Intangible assets. Other capital grants in nature of
promoter''s contribution are credited to capital reserve.
However no government grants are received by the company in the year
under consideration.
ix) REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and can be reliably
measured.
* Sale of Goods
Domestic Sales is recognized on dispatch to customers and is net of
returns and rate difference if any. Sales turnover includes basic sales
value and excise duty, but excludes other recoveries such as insurance,
sales tax etc. However there are no sales during the year under
consideration.
* Other Income
Interest is recognized on Time Proportion Basis with reference to
principal outstanding and rate of Interest applicable.
x) EMPLOYEE BENEFITS:
No provision is made for retirement benefits, the company will account
for the same as and when paid.
xi) FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currencies are recorded at actual rates rates.
The exchange difference resulting from settled transactions is
recognized in the statement of profit and loss.
Year end balances of monetary items are restated at the year end
exchange rates and the resultant net gain or loss is recognized in the
statement of profit and loss.
Premium or discount on forward contracts where there are underlying
assets/liabilities are amortised over the life of the contract. Such
foreign exchange forward contracts are revalued at the Balance Sheet
date and the exchange difference between the spot rate at the date of
contract and spot rate on the Balance Sheet date is recognized as
gain/loss in the Statement of Profit and loss.
However there are no foreign currency transactions during the year
under consideration.
xii) BORROWING COST:
Borrowing Costs attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such assets are ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss Account
in the period in which they are incurred.
xiii) LEASES:
* As a Lessee
Leases, where significant portion of risk and reward of ownership are
retained by the Lessor, are classified as Operating Leases and lease
rentals thereon are charged to the Statement of Profit and Loss on a
straight-line basis over the lease term.
However there are no such leased assets in the year under
consideration.
* As a Lessor
The Company has leased certain tangible assets, and such leases, where
the Company has substantially retained all the risks and rewards of
ownership, are classified as operating leases.
Lease income is recognised in the Statement of Profit and Loss on a
straight-line basis over lease term.
However there are no such leased assets in the year under
consideration.
xiv) TAXES ON INCOME:
Tax expense comprises of current and deferred tax.
Provision for current tax is made on the basis of estimated taxable
income for the relevant accounting year in accordance with the Income
Tax Act, 1961.
Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and the liability on a net basis.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable certainty that these would be realized
in future.
In case of unabsorbed losses and unabsorbed depreciation, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profit.
However, the Company is of the opinion that there exists no reasonable
or virtual certainty that these would be realized in future, and hence,
no such Deferred Tax has been recognized for the year under
consideration.
Minimum Alternative Tax (MAT) credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognised as an asset in
accordance with the recommendations contained in Guidance Note issued
by the ICAI, the said asset is created by way of a credit to the
Statement of Profit and Loss and shown as MAT Credit Entitlement. The
Company reviews the same at each Balance Sheet date and writes down the
carrying amount of MAT Credit Entitlement to the extent there is no
longer convincing evidence to the effect that the Company will pay
normal Income Tax during the specified period.
The Company has the policy of reviewing and passing proper adjustment
entries for Income Tax paid, Provision for Income Tax made and
excess/short tax provision for the year after receiving orders from the
Appellate authorities. The Company also makes a fair estimate of the
Income Tax liability for the said year and gives effects to it in the
Books of Accounts.
xv) CASH AND CASH EQUIVALENT :
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash on hand and cash at bank including fixed deposit with
original maturity period of less than three months and short term
highly liquid investments with an original maturity of three months or
less.
xvi) CASH FLOW STATEMENT:
Cash flows are reported using the Indirect Method, whereby profit/
(loss) before tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating, investing and
financing activities of the Company are segregated based on the
available information.
xvii) RESEARCH & DEVELOPMENT:
Revenue expenditure on Research and Development is charged to the
Statement of Profit and Loss in the year in which it is incurred.
Capital Expenditure on Research and Development is shown as an addition
to Fixed Assets or Work-in-Progress, as the case may be.
However no such expenditure is incurred in the year under
consideration.
xviii) EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to the equity shareholders by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
xix) PROVISION & CONTINGENCIES:
The company estimates the probability of any loss that might be
incurred on outcome of contingencies on the basis of information
available.
A provision is recognized when the company has a present 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 a
reliable estimate can be made. Provisions are determined based on
management''s estimate required to settle the obligation at the balance
sheet date, supplemented by experience of similar transactions. These
are reviewed at each balance sheet date and adjusted to reflect the
management''s current estimates.
In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be
reasonably estimated, a disclosure is made in the financial statements.
In case of remote possibility neither provision nor disclosure is made
in the financials.
A Contingent Asset is neither recognised nor disclosed in the Financial
Statements.
Mar 31, 2013
I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements are prepared in accordance with the generally
accepted accounting principles in India under the historical cost
convention on accrual concept and are in line with the Accounting
Standards, relevant laws as well as the guide lines prescribed by the
Institute of Chartered Accountants of India.
These financial statements have been prepared 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, 1956.
ii) USE OF ESTIMATES:
The preparation and presentation of financial statements requires
estimates and assumptions and/or revised estimates and assumptions to
be made that affect the reported amounts of assets and liabilities and
disclosures of Contingent Liabilities on the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period.
The estimates and assumptions used in the accompanying financial
statements are based upon Management''s evaluation of the relevant facts
and circumstances as on the date of financial '' statements. Differences
between the actual results and estimates are recognised in the period
in which the results are known / materialise.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
iii) TANGIBLE FIXED ASSETS AND DEPRECIATION:
- TANGIBLE FIXED ASSETS:
Fixed Assets have been stated at cost. Cost comprises of the purchase
price and all other attributable cost of bringing the assets to its
working condition for intended use.
- CAPITAL WORK IN PROGRESS:
Expenses incurred towards acquisition of fixed assets which have not
been installed or not put to use before the yearend are disclosed
under capital work in progress and no depreciation has been provided on
that.
- DEPRECIATION:
Depreciation on fixed assets is charged on straight-line method basis
in the manner and as per - the rates and method provided in schedule
XIV of the Companies Act, 1956.
Depreciation on Assets added / disposed off during the year have been
provided on pro-rata basis with reference to the month of additions /
deletions from the respective month of purchase/sale.
iv) INTANGIBLE FIXED ASSETS AND AMORTISATION:
- Intangible assets are recognized where it is probable that the
future economic benefit attributable to the assets will flow to the
Company and its cost can be reliably measured.
- Expenditure incurred on acquisition/development of intangible
assets which are not put/ready to use at the reporting date is
disclosed under intangible assets under development.
- Intangible Assets are stated at acquisition cost, net of
accumulated amortisation and accumulated impairment losses, if any.
Intangible assets are amortised on a straight- line basis over their
estimated useful lives. However there are no Intangible Assets for the
year under consideration.
v) IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying value of the asset
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and loss in the year in which as asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount. However for the year under
consideration there is no such Impairment on Asset.
vi) INVENTORY
The Inventory is valued as under and as certified by the Management
- Raw Material and Consumables are valued at cost.
- Finished Goods are valued at Cost or Market Value whichever is
lower. Cost includes the cost of conversion and other costs incurred to
bring the inventories to their present location and condition.
- Obsolete stock if any is valued at net realisable value. However
there is no obsolete stock in the year under consideration.
- Work in progress is valued at cost which includes the cost of
conversion and other costs incurred to bring the inventories to their
present location and condition.
vii) INVESTMENTS:
Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. AH other investments are
classified as long-term investments.
The Current investments are valued at cost. Long Term investments are
stated at cost. Provision for diminution in the value of Long Term
Investments is made, only if, in the opinion of the management such a
decline is regarded as being other than temporary.
However there are no investments in the year under consideration.
viii) REVENUE RECOGNITION:
- SALE OF GOODS
Domestic Sales is recognized on dispatch to customers and is net of
returns and rate difference if any. Sales turnover includes basic sales
value and excise duty, but excludes other recoveries such as insurance,
sales tax etc.
However there are no sales during the year under consideration.
- OTHER INCOME
Interest is recognized on Time Proportion Basis with reference to
principal outstanding and rate of Interest applicable.
ix) EMPLOYEE BENEFITS:
No provision is made for retirement benefits, the company will account
for the same as and when paid.
x) Foreign Currency Transactions:
Transactions in foreign currencies are recorded at actual rates rates.
The exchange difference resulting from settled transactions is
recognized in the statement of profit and loss.
Year end balances of monetary items are restated at the year end
exchange rates and the resultant net gain or loss is recognized in the
statement of profit and loss.
Premium or discount on forward contracts where there are underlying
assets/liabilities are amortized over the life of the contract. Such
foreign exchange forward contracts are revalued at the Balance Sheet
date and the exchange difference between the spot rate at the date of
contract and spot rate on the Balance Sheet date is recognized as
gain/loss in the Statement of Profit and loss.
However there are no foreign currency transactions during the year
under consideration.
xi) Borrowing Costs:
Interest and other related cost on acquiring qualifying assets are
capitalised as per accounting standard AS-16. All other borrowing costs
are recognized as expense in the period in which they are incurred.
However no such expense is incurred in the year under consideration.
xii) LEASES:
(a) As a Lessee:
Leases, where significant portion of risk and reward of ownership are
retained by the Lessor, are classified as Operating Leases and lease
rentals thereon are charged to the Statement of Profit and Loss on a
straight-line basis over the lease term. However there are no such
leased asset in the year under consideration.
(b) As a Lessor:
The Company has leased certain tangible assets, and such leases, where
the Company has substantially retained all the risks and rewards of
ownership, are classified as operating leases.
Lease income is recognised in the Statement of Profit and Loss on a
straight-line basis over lease term. However there are no such leased
assets in the year under consideration.
xiii) Taxes on Income:
Tax expense comprises of current and deferred tax.
Provision for current tax is made on the basis of estimated taxable
income for the relevant accounting year in accordance with the Income
Tax Act, 1961.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable certainty that these would be realised
in future.
Minimum Alternative Tax (MAT) credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognised as an asset in .
accordance with the recommendations contained in Guidance Note issued
by the ICAI, the said asset is created by way of a credit to the
Statement of Profit and Loss and shown as MAT Credit Entitlement. The
Company reviews the same at each Balance Sheet date and writes down the
carrying amount of MAT Credit Entitlement to the extent there is no
longer convincing evidence to the effect that the Company will pay
normal Income Tax during the specified period.
The Company has the policy of reviewing and passing proper adjustment
entries for Income Tax oaid, Provision for Income Tax made and
excess/short tax provision for the year after receiving orders from
the Appellate authorities. The Company also makes a fair estimate of
the Income Tax liability for the said year and gives effects to it
in the Books of Accounts.
xiv) CASH AND CASH EQUIVALENT
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash on hand and cash at bank including fixed deposit with
original maturity period of less than three months and short term
highly liquid investments with an original maturity of three months or
less.
xv) CASH FLOW STATEMENT
Cash flows are reported using the Indirect Method, whereby profit/
(loss) before tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating, investing and
financing activities of the Company are segregated based on the
available information.
xvi) RESEARCH & DEVELOPMENT
Revenue expenditure on Research and Development is charged to the
Statement of Profit and Loss in the year in which it is incurred.
Capital Expenditure on Research and Development is shown as an addition
to Fixed Assets or Work-in-Progress, as the case may be. However no
such expenditure is incurred in the year under consideration.
xvii) EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to the equity shareholders by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
xviii) Provisions and Contingencies:
The company estimates the probability of any loss that might be
incurred on outcome of contingencies on the basis of information
available up to the date on which the financial statements are
prepared.
A provision is recognized when the company has a present 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 a
reliable estimate can be made. Provisions are determined based on
management''s estimate required to settle the obligation at the
balance sheet date, supplemented by experience of similar transactions.
These are reviewed at each balance sheet date and adjusted to reflect
the management''s current estimates.
In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be
reasonable estimated, a disclosure is made in the financial statements.
Mar 31, 2010
1. Accounting Convention:
The financial statement are prepared under the historical cost
convention in accordance with the accounting principles accepted in
India and are in line with the relevant laws as well as the guidelines
prescribed by the Department of Company Affairs and the Institute of
Chartered Accountants of India.
2. Method of Accounting:
Method of accounting employed by the Company is generally mercantile
both as to income and expenditure except in the case of refunds from
government bodies viz. sales tax, excise, income tax etc, subsidy,
insurance claims and dividend receipts which are being accounted on
cash basis.
3. a. Fixed Assets:
Fixed Assets have been stated at cost. Cost comprises of the purchase
price and all other attributable cost of bringing the assets to its
working condition for intended use.
b. Capital work in Progress:
Expenses incurred towards acquisition of fixed assets which have not
been installed or put to use before the year end are disclosed under
capital work in progress and no depreciation has been provided on that.
c. Impairment of Assets:
In compliance with Accounting Standards (AS) 28 "Impairment of Assets"
issued by the Institute of Chartered Accountants of India (ICAI), the
carrying amount of Cash Generating Units/Assets are reviewed at Balance
Sheet date to determine whether there is any indication of impairment
if any such indication exists, the recoverable amount is estimated at
the higher of net selling price and value in use. Impairment loss is
recognized wherever carrying amount exceeds the recoverable amount.
d. Depreciation:
Depreciation on fixed assets is charged on straight line method basis
in the manner and as per the rates and method provided in schedule XIV
of The Companies Act, 1956.
Depreciation on Assets added / disposed off during the year has been
provided on prorata basis with reference to the month of additions /
deletions.
The Company has changed the method of depreciation from written down
value basis to straight line method from retrospective effect and
excess depreciation difference of Rs. 1,28,597 is credited to Profit &
Loss A/c.
The Depreciation on Factory Building is @ 3.34% on straight line basis
considering the terms and conditions stated in the lease of Land
agreement and its residual scrap value thereafter.
4. Inventory:
Raw Materials, Stores and Spare parts are valued at cost (excluding
excise and sales tax), finished goods are valued at realizable value
and work-in-process are valued at cost of production. The manufacturing
process being continuous, work-in- progress is separately accounted.
5. Excise Duty:
The liability for cess duty on finished goods is accounted as and when
they are cleared from the factory premises.
6. Revenue Recognition:
Gross Receipts include commission and other income. Sales of goods are
recognized on dispatch to customer and are net of returns. Sales
turnover includes basic sales value, and includes other recoveries such
as excise, sales tax etc.
7. Retirement Benefits:
Retirement benefits in the form of Provident Fund, Family Pension Fund
and Super Annuation Schemes, which are defined
Contribution Schemes are charged to the Profit & Loss Account of the
year when the contribution to the respective funds accrue. There are no
other obligations other than the contribution payable to the respective
trusts.
8. Foreign Currency Transactions:
The transactions in foreign currencies are recorded at the exchange
rate prevailing on the date of transaction. Outstanding bills at the
end of year are however booked at the exchange rate prevalent as on 31
st March.
9. Borrowing Costs:
Interest and other related cost on acquiring qualifying assets are
capitalized as per accounting standard AS-16.
10. Taxes on Income:
Deferred Tax Provision
As per the accounting standard AS-22 issued by ICAI, the net deferred
tax liability amounting to Rs. 16.61 lacs on account of timing
differences as shown below for the year under consideration, is
accounted for using the tax rate and laws that have been enacted or
substantially enacted as on the Balance Sheet date, has been debited to
the Profit and Loss account.