Mar 31, 2015
The Accounting policies set out below have been applied consistently to the period presented in this financial statement.
Disclosure of Accounting Policies (AS-1)
Nature of Operation:
Company is an Interior infrastructure company engaged in manufacturing of Decorative Laminated Sheets through its factory located in Plot No. 309, Vahelal Road, Zak Village, Taluka: Dehgam, Dist. Gandhinagar, Gujarat - 382 305. Head office is situated at Shop No. 10, Ground Floor, Raghav Residency, Opp. Naroda, G.E.B, Dehgam Road, Naroda, Ahmedabad, Gujarat - 382 330. India.
Accounting Concepts & Basic Presentation:
The Financial Statements are prepared as per historical cost convention and in accordance with the Generally Accepted Accounting Principles (GAPP) in India. GAPP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2014, read with the General Circular number 15/2013 dated 13th September, 2013 in respect of Section 133 of the Companies Act, 2013. Accounting Policies have been consistently applied. Where changes are made in presentation, the comparative figures of the previous year are regrouped and rearranged accordingly.
Use of Estimates:
The Preparation of the financial statements in conformity with GAPP requires the 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. Accounting estimates could change from period to period. Actual result could differ from those estimates. Appropriate changes in Estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. 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 financial statements.
Valuation of Inventories (AS 2)
RAW MATERIALS are valued at cost. STOCK IN PROCESS has been valued at cost of materials and labour charges together with relevant factory overheads. FINISHED GOODS are valued at cost or Net realizable Value which ever is lower. There is no closing stock of STORES & FUEL.
Cash Flow Statement (AS 3)
Cash Flows are reported using Indirect Method; where by profit before tax is adjusted for the effects of transactions of a non-cash nature. The cash flow from regular revenue generating, financing and investing activities of the company is segregated.
Contingencies and Events occurring after Balance Sheet Date (AS 4)
Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.
Net Profit or Loss for the period, Prior Period Items and Changes in accounting policies (AS 5)
Net profit or loss for the period and prior period items are shown separately in the statement of profit & Loss.
Depreciation (AS 6)
Depreciation on Fixed Asset is provided by Straight-line method in accordance with and generally at the rate prescribed in Schedule 2 of Companies Act, 2013.
Depreciation in respect of addition to Asset has been charged on pro-rata basis with reference to the period of use of such assets.
Intangible Assets are amortized on Straight-line method as follows; Computer Software: 5 Years
Revenue Recognition (AS 9)
Sale of Goods: Sales are accounted for on dispatch of product to customers. Gross sales shown in the statement of Profit & Loss are inclusive of Excise duty but exclude discounts, CST and VAT. Net Sales are shown after deducting Excise duty which is disclosed at appropriate places.
Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.
With regard to Sale, income is reported when practically all risks and rights connected with the ownership have been transferred to the buyers. This usually occurs upon dispatch, after the price has been determined.
Accounting for Fixed Assets (AS 10)
i) Tangible Fixed Assets are stated at cost less accumulated depreciation, Cost includes borrowing costs and all incidental expenditure net of CENVAT, Service Tax input Credit and VAT input Credit, whenever applicable.
ii) Intangible Fixed Asset is stated at cost of acquisition or development.
Accounting for Changes in Foreign Exchange Rates (AS 11)
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 and Loss.
Accounting for Investment (AS 13)
Investments are classified as Long Term & Current Investments. Long Term Investments are:
* valued at cost less provision for diminution other than temporary in value, if any.
* Current Investments, if any, are valued at lower of cost or fair value.
Employee Benefits (AS 15)
i) 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.
ii) Long Term: The Company has both defined contribution and defined benefit plans. These plans are financed by the Company in the case of defined contribution plans.
iii) 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 contribution plans are reported as expenses during the period in which the employees perform the services that the payment covers.
iv) 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 expenses 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 the remaining term i.e. almost equivalent to the average balance working period of employees.
v) Other Employee Benefits: Compensated absences which occur 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 in which the employees perform the services that the undiscounted amount of the benefits after deducting amounts already paid.
Borrowing Costs (AS 16)
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.
Related Party Disclosures (AS 18)
Disclosure of related parties as required by the accounting standards is furnished in the Notes on accounts.
Earning Per Share (AS 20)
Basic earning/Loss per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Accounting for Taxes on Income (AS 22)
The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset and deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations.
Intangible Assets (AS 26)
Intangible asset is acquired by payment and are disclosed at cost less amortization on a straight line basis over its estimated useful life.
Impairment of Assets (AS 28)
The management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset other than goodwill is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss recognized. The carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss reorganization for the asset in prior years.
Provision, Contingent Liabilities and Contingent Assets (AS 29)
Provisions are made for present obligation arising as a result of past events. Contingent Liabilities are not provided for but disclosed by way of Notes on Accounts. Contingent Assets are neither accounted for nor disclosed by way of Notes on Accounts.
Consumption of Raw Material
Raw material consumed is exclusive of a) Excise Duty on Input under CENVAT Scheme b) Service Tax Input Credit c) VAT Input Credit under state laws, wherever applicable.
Service Tax & Cess
Various Expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Higher Education Cess.
Tax expenses comprise of income tax and deferred tax including applicable surcharge and cess. Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period in which the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions.
MAT (Minimum Alternate Tax) credit is recognized 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 recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account 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 Company will pay normal Income Tax during the specified period. Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated hereinabove.
Cash & Cash Equivalent
Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
Preliminary Expenses are amortized fully during the year in which it was incurred.