Mar 31, 2015
I) Basis of Preparation
a) These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendations of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply all material aspects with the Accounting Standards notified under section 211(3C) of Companies Act, 1956 (Companies (Accounting Standards) Rules, 2006, as amended) and other relevant provisions of the Companies Act, 2013.
All the 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 Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current- non current classification of assets and liabilities.
b) Use of estimates:
The presentation of financial statements in conformity with the Generally Accepted Accounting Principles in India requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known/ materialised.
c) Accounting Policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.
II) Fixed Assets
Fixed assets are stated at cost of acquisition or construction net of recoverable taxes, trade discounts, rebates, depreciation accumulated and accumulated impairment losses. All costs relating to the acquisition and installation of fixed assets are capitalised and includes borrowing costs relating to borrowed funds attributable to construction or acquisition of fixed assets, up to the date the asset is put to use.
Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is recognised immediately in the Statement of Profit and Loss.
Losses arising from the retirement of and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.
III) Method of Depreciation and amortization
1) Depreciation has been provided as under:
i) For assets existing on 1st April, 2014 the carrying amount will be amortised over the remaining useful lives on straight line method as prescribed in the Schedule II of the Companies Act, 2013.
ii) For the assets added after the 1st April, 2014:
On Plant and Machinery, Furniture & Fittings, Office equipments and Vehicles depreciation has been provided on Straight Line Method at the useful lives prescribed in Schedule II to the Companies Act, 2013.
2) Residual values for Air Conditioners, Furniture and Fittings, Office Equipments, Computers and servers are considered Nil.
3) Depreciation on assets added/disposed off during the year has been provided on prorata basis with reference to the month of addition/disposal.
Investments that are readily realisable and are 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 the other investments are classified as Long Term Investments. Current investments are carried at cost or fair value, whichever is lower. Long Term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
Inventories are valued at the lower of cost and estimated net realizable value (except scrap/waste which are valued at net realisable value). The cost comprises of cost of purchase, cost of conversion and other costs including appropriate production overheads in the case of finished goods and work in progress, incurred in bringing such inventories to their present location and condition.
In case of raw materials, stores & spares and traded goods, cost (net of CENVAT/VAT credits wherever applicable) is determined on a First In First Out basis, also in case of work in process and finished goods, cost is determined on First In First Out basis.
VI) Revenue Recognition
i. Sales are stated at net of returns and sales tax. The Excise Duty relatable to sales is separately disclosed and deducted from sales. Sales revenue is recognised when risks and rewards of ownership of the goods have passed to the buyer.
ii. Interest income is recognized on a time proportion basis taking into accounts the amount outstanding and the rate applicable.
iii. Rent Revenue is recognized on accrual basis.
iv. All other known incomes to the extent receivable and quantifiable till the date of finalization of account are accounted on accrual basis.
VII) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of the assets, upto the date the assets are ready for their intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the year in which they are incurred.
As a lessee:
Lease rentals on assets taken on operating lease are recognized as expense in the Statement of Profit and Loss on straight line basis.
As a lessor:
The Company has given part of Immovable property on rental basis and treated as operating lease. Lease rentals are accounted on accrual basis in accordance with the respective lease agreements.
IX) Foreign Currency Transactions
i. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
ii. Monetary items in the form of Loans, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.
iii. All other incomes or expenditure in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
X) Employee Benefits
Short-term employee benefit:
Short Term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
Long-term employee benefit:
i. No provision has been considered in accounts towards future payment of gratuity to the employees as the same is proposed to be accounted on cash basis. No provision has been made towards accrued leave wages which is continued to be accounted on cash basis.
ii. The company has adopted PAY-AS-YOU-GO method for payment of other retirement benefits if any payable to the employees.
XI) Cash and cash equivalents
In the cash flow statement, cash and cash equivalent includes cash on hand, demand deposits with banks, other Short Term highly liquid Investments with original maturities of three months or less.
XII) Taxes on Income
(i) Tax expense comprises of current and deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
(ii) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
(iii) At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.
(iv) Minimum Alternative Tax credit (MAT Credit) is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
XIII) Earnings per share
Basic earnings per equity share are calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting attributable taxes) by weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for event of fresh issue of equity shares, if any.
For the purpose of calculating diluted earnings per equity share, the net profit / (loss) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
(i) 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 impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
(ii) After impairment, depreciation is provided on the assets revised carrying amount over its remaining useful life.
(iii) A previously recognised impairment loss is increased or decreased depending on change in circumstances. However, an impairment loss is not decreased to an amount higher than the carrying amount that would have been determined has no impairment loss been recognised.
XV) Provisions, Contingent Liabilities and Contingent Assets Provisions:
Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.