Mar 31, 2015
3.1. CHANGE IN ACCOUNTING POLICY:
i. The accounting policies adopted in the preparation for financial
statements are consistent with those of the previous year.
ii. The preparation of financial statements in conformity with
generally accepted accounting principles in India (Indian GAAP)
requires the management to make estimates, judgment 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 period.
3.2. REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
Sale of goods:
Revenue from domestic sale of goods is recognized when all the
significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are not economic benefits flowing to
the Company. Hence, they are excluded from revenue. Export sales are
recognized at the time of handing over of export consignment to
authorities for clearance.
Income from services:
Revenue from hotel operations and from maintenance contracts are
recognized pro-rata over the period of the contract as and when
services are rendered. The company collects service tax on behalf of
the government and, therefore, it is not an economic benefit flowing to
the Company. Hence, it is excluded from revenue. Revenue from channel
marketing is recognized as and when it is billed to the customer
irrespective to the period and accordingly expenses are also accounted
for.
Interest:
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
3.3. FIXED ASSETS AND DEPRECIATION:
Tangible Assets:
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any directly attributable cost of
bringing the asset to its working condition for its intended use.
Expenditure for addition, improvement and renewal are capitalized and
all other expenditure on existing fixed assets, including day to day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of Profit and Loss for the period which during
which the expenses are incurred.
Intangible Assets:
The company capitalizes software where it is reasonably estimated that
the software has an enduring useful life. Software is depreciated over
an estimated useful life of three years. Any subsequent amount incurred
in up-gradation or improvement of the software is charged to profit and
loss account as an expenses.
Capital work-in-progress:
Capital work-in-progress comprises of the cost of assets that are not
yet ready for their intended use at the reporting date. Cost of
material and other expensesincurred on such material are shown as
Capital work- in-progress for capitalization.
Depreciation :
Depreciation other than on land and capital work-inprogress is charged
on Straight-line method as per the useful life prescribed in Schedule
II of the Companies Act, 2013 on all fixed assets.
Depreciation on the amount of addition made to fixed assets due to
up-gradation is provided at the rate applied to the existing assets on
pro-rata basis.
Impairment of tangible and intangible assets:
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication exists,
the company estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's net selling price and its
value in use. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset. In determining net selling price, recent
market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the Statement of Profit and Loss, except
for previously revalued tangible fixed assets, where the revaluation
was taken to revaluation reserve. In this case, the impairment is also
recognized in the revaluation reserve up to the amount of any previous
revaluation.
3.4 INVENTORY VALUATION:
Raw materials, components, stores, stock-in-trade and packing materials
are valued at cost or net realizable value whichever is less. However,
material and other items held for use in the production of inventories
are not written down below the cost if the finished goods in which they
will be incorporated are expected to be sold at or above cost. Cost of
raw materials, components, stores, stock in trade is determined on a
moving weighted average basis.
Semi-finished goods is valued at estimated cost. Finished goods are
valued at cost or net realizable value whichever is less.
The cost of Semi-finished goods and finished goods include cost of
conversion and other cost incurred in bringing the inventories to their
present condition and location.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
3.5. VALUATION OF INVESTMENT:
Investments, which are readily realizable 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.
Current investments are carried in the financial statements at lower of
cost and fair value deter- mined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
3.6. FOREIGN CURRENCY TRANSACTIONS:
i. INDIA OPERATIONS :
a. Initial Recognition :
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
realization. Foreign Currency transactions are recorded at the exchange
rate prevailing on the date of the transaction.
b. Exchange Differences:
The exchange difference between the rate prevailing on the date of
transaction and on the date of settlement is recognized as income or
expenses as the case may be.
Monetary assets and liabilities related to foreign currency remaining
unsettled at the end of the year are translated at the exchange rate
prevailing on the date on which transaction is recorded. Exchange
differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded or reported in previous financial
statements, are recognized as income or as expense in the year in which
they arise.
In accordance with MCA notification on Accounting Standard - 11 on "The
Effects of Changes in Foreign Exchange Rates", in respect of long term
foreign currency loan taken for acquisition of assets, the exchange
difference arising on reporting of said loan is adjusted to the cost of
the assets.
c. Forward Exchange Contract:
In respect of forward exchange contracts entered into by the Company,
the difference between the contracted rate and the rate at date of
transaction is recognized as gain or loss over the period of contract
except for difference in respect if liabilities incurred for acquiring
fixed assets from a country outside India in which case such difference
is adjusted in the carrying amount of the respective fixed assets.
Exchange difference on such contracts are recognized in the statement
of profit and loss in the year in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of forward exchange
contract is recognized as income or as expenses for the year.
ii. FOREIGN BRANCH OFFICE OPERATIONS :
a. The assets and liabilities, both monetary and nonmonetary, of the
foreign operation are translated at the exchange rate prevailing on the
balance sheet date.
b. Sales and Cost of material of the foreign operation are translated
by applying monthly average exchange rate, Administrative expenses of
the foreign operation are translated by applying quarterly average
exchange rates; and
c. All resulting exchange differences are accumulated in Foreign
Currency Translation Reserve.
3.7 FEE FOR TECHNICAL SERVICES:
Fee for technical services are charged to the profit and loss account
over the period of the agreement for technical services.
3.8 EMPLOYEE BENEFITS:
a. Defined Contribution Plan :
The company has defined contribution plan for post employment benefits
in the form of provident fund for all employees which are administrated
by Regional Provident Fund Commissioner. Provident Fund and Family
Pension Scheme are classified as defined contribution plan as the
company has no further obligation beyond making the contribution The
Company's contribution to defined contribution plans are charged to
Profit and Loss Statement of the year when the contribution to the
respective funds are due. There are no other obligations other than the
contribution payable to the respective funds.
b. Defined benefits plan :
Company's liability toward Gratuity under the Payment of Gratuity Act,
1972 is defined obligation and provided for on the basis of actuarial
valuation made at the end of each financial year by an independent
actuary.
c. Compensated Absences :
Liability on account of other employee benefits like leave travel
assistance, medical reimbursement are accounted for on accrual basis.
Liability on account of leave encashment to employees was considered as
short term compensation expense provided on actual basis as and when to
pay.
3.9 PROVISIONS :
a. The Company does not make provision for doubtful debts and follows
the practice of writing off bad debts as and when determined.
b. A provision is recognized when an enterprise 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 not disclosed to
its present value and are determined based on best management estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
management estimates.
3.10 TAXATION:
Tax expense comprises both current and deferred taxes. Current Income
Tax is measured as the amount expected to be paid to the tax
authorities in accordance with the Indian Income Tax Act, 1961 enacted
in India and tax laws prevailing in the respective tax jurisdictions
where the Company operates. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted, at the
reporting date.
Deferred Income Tax reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred Tax is
measured using the tax rates and the tax laws enacted or substantively
enacted at the Balance Sheet date. Deferred income tax relating to
items recognized directly in equity is recognized in equity and not in
the Statement of Profit and Loss.
Deferred tax assets have been recognized only to the extent there is
reasonable certainty that the assets can be realized in future. However
where there is unabsorbed depreciation or carry forward loss under
taxation laws, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and written down or written up
to reflect the amount that is reasonably/ virtually certain, as the
case may be, to be realized.
3.11 EARNING PER SHARE (EPS):
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholder (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year.
For the purpose of calculating Diluted Earning Per Share, the net
profit or loss for the year attributable to equity shareholder and the
weighted average number of shares outstanding during he year are
adjusted for the effects of all dilative potential Equity Shares.
3.13 SEGMENT REPORTING:
Identification of segments:
The company's operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and services in the market. The analysis of geographical
segments is based on the areas in which operating divisions of the
company operate.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment . Unallocated items Unallocated
items include general corporate income and expense items which are not
allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
3.14 ALLOCATION OF OVERHEADS AMONG THE UNITS/ SEGMENT:
a. Direct Expenses related to the manufacturing units or the braches
has been directly accounted for in the respective units/branches and
common overheads have been allocated among units/ branches in the ratio
of the gross operating revenue of the respective units/ branches.
b. The direct expenses related to services being provided by the
Company have been clubbed with the respective accounting heads.
c. The Company follows the accounting policy of disclosing of freight
and distribution cost as net off.
3.15 IMPAIRMENT:
At each balance sheet date, the management reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable
amount of the assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of net selling price
of an asset and value in use determined by discounting the estimated
future cash flow to their present value based on appropriate discount
factor.
3.16 CONTINGENT LIABILITIES:
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
3.17 CASH AND CASH EQUIVALENT:
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less
3.18 MEASUREMENT OF EBITDA:
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations.
In its measurement, the Company does not include depreciation and
amortization expense, finance costs and tax expense.
3.19 SERVICE TAX CREDIT:
Service Tax credit on input services is accounted for on accrual basis
on receipt of input services and it does not form part of cost of such
services.
Mar 31, 2014
1.1. CHANGE IN ACCOUNTING POLICY:
i. The accounting policies adopted in the preparation for financial
statements are consistent with those of the previous year.
ii. The preparation of financial statements in conformity with
generally accepted accounting principles in India (Indian GAAP)
requires the management to make estimates, judgment 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 period.
1.2. REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. Sale of goods: Revenue from domestic sale of goods
is recognized when all the significant risks and rewards of ownership
of the goods have been passed to the buyer, usually on delivery of the
goods. The company collects sales taxes and value added taxes (VAT) on
behalf of the government and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
Export sales are recognized at the time of handing over of export
consignment to authorities for clearance. Income from services:
Revenue from hotel operations, channel marketing and from maintenance
contracts are recognized pro-rata over the period of the contract as
and when services are rendered. The company collects service tax on
behalf of the government and, therefore, it is not an economic benefit
flowing to the Company. Hence, it is excluded from revenue. Interest:
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
3.3. FIXED ASSETS AND DEPRECIATION:
Tangible Assets: Fixed assets are stated at cost less accumulated
depreciation. Cost comprises the purchase price and any directly
attributable cost of bringing the asset to its working condition for
its intended use. Expenditure for addition, improvement and renewal
are capitalized and all other expenditure on existing fixed assets,
including day to day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of Profit and Loss for
the period which during which the expenses are incurred. Intangible
Assets: The company capitalizes software where it is reasonably
estimated that the software has an enduring useful life. Software is
depreciated over an estimated useful life of three years. Any
subsequent amount incurred in up-gradation or improvement of the
software is charged to profit and loss account as an expenses.
Capital work-in-progress: Capital work-in-progress comprises of the
cost of assets that are not yet ready for their intended use at the
reporting date. Cost of material and other expenses incurred on such
material are shown as Capital work- in-progress for capitalization.
Depreciation: Depreciation other than on land and capital work-in-
progress is charged on Straight-line method in accordance with the
rates prescribed in Schedule XIV of the Companies Act, 1956 on all
fixed assets.
Depreciation on the amount of addition made to fixed assets due to
up-gradation is provided at the rate applied to the existing assets on
pro-rata basis. The company has used the following rates to provide
depreciation on its fixed assets:
Rates (SLM)
Factory Building 3.34%
Plant and Machinery, Electrical Fittings 4.75%
Furniture and Fixtures 6.33%
Vehicles 9.50%
CATV Network 5.28%
Impairment of tangible and intangible assets: The company assesses at
each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, the company estimates the
asset''s recoverable amount. An asset''s recoverable amount is the higher
of an asset''s net selling price and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other
assets or groups of assets. Where the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss, except
for previously revalued tangible fixed assets, where the revaluation
was taken to revaluation reserve. In this case, the impairment is also
recognized in the revaluation reserve up to the amount of any previous
revaluation.
3.4 INVENTORY VALUATION:
Raw materials, components, stores, stock-in-trade and packing materials
are valued at cost or net realizable value whichever is less. However,
material and other items held for use in the production of inventories
are not written down below the cost if the finished goods in which they
will be incorporated are expected to be sold at or above cost. Cost of
raw materials, components, stores, stock in trade is determined on a
moving weighted average basis.
Semi-finished goods is valued at estimated cost. Finished goods are
valued at cost or net realizable value whichever is less.
The cost of Semi-finished goods and finished goods include cost of
conversion and other cost incurred in bringing the inventories to their
present condition and location.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
3.5. VALUATION OF INVESTMENT:
Investments, which are readily realizable 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.
Current investments are carried in the financial statements at lower of
cost and fair value deter- mined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
3.6. FOREIGN CURRENCY TRANSACTIONS: i. INDIA OPERATIONS :
a. Initial Recognition : Foreign currency transactions are recorded in
the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency
at the date of the realization. Foreign Currency transactions are
recorded at the exchange rate prevailing on the date of the
transaction.
b. Exchange Differences: The exchange difference between the rate
prevailing on the date of transaction and on the date of settlement is
recognized as income or expenses as the case may be.
Monetary assets and liabilities related to foreign currency remaining
unsettled at the end of the year are translated at the exchange rate
prevailing on the date on which transaction is recorded. Exchange
differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded or reported in previous financial
statements, are recognized as income or as expense in the year in which
they arise. In accordance with MCA notification on Accounting
Standard-11 on "The Effects of Changes in Foreign Exchange Rates", in
respect of long term foreign currency loan taken for acquisition of
assets, the exchange difference arising on reporting of said loan is
adjusted to the cost of the assets.
c. Forward Exchange Contract: In respect of forward exchange contracts
entered into by the company, the difference between the contracted rate
and the rate at date of transaction is recognized as gain or loss over
the period of contract except for difference in respect of liabilities
incurred for acquiring fixed assets from a country outside India in
which case such difference is adjusted in the carrying amount of the
respective fixed assets. Exchange difference on such contracts are
recognized in the Statement of Profit and Loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expenses for the year.
ii. FOREIGN BRANCH OFFICE OPERATIONS:
a. The assets and liabilities, both monetary and non- monetary, of the
foreign operation are translated at the exchange rate prevailing on the
balance sheet date.
b. Sales and Cost of material of the foreign operation are translated
by applying monthly average exchange rate, Administrative expenses of
the foreign operation are translated by applying quarterly average
exchange rates.
c. All resulting exchange differences are accumulated in Foreign
Currency Translation Reserve.
3.7 FEE FOR TECHNICAL SERVICES:
Fee for technical services are charged to the profit and loss account
over the period of the agreement for technical services.
3.8 EMPLOYEE BENEFITS:
a. Defined Contribution Plan: The company has defined contribution
plan for post employment benefits in the form of provident fund for all
employees which are administrated by Regional Provident Fund
Commissioner. Provident Fund and Family Pension Scheme are classified
as defined contribution plan as the company has no further obligation
beyond making the contribution The company''s contribution to defined
contribution plans are charged to the Statement of Profit and Loss of
the year when the contribution to the respective funds are due. There
are no other obligations other than the contribution payable to the
respective funds.
b. Defined benefits plan: Company''s liability toward Gratuity under
the Payment of Gratuity Act, 1972 is defined obligation and provided
for on the basis of actuarial valuation made at the end of each
financial year by an independent actuary.
c. Compensated Absences: Liability on account of other employee
benefits like leave travel assistance, medical reimbursement are
accounted for on accrual basis. Liability on account of leave
encashment to employees was considered as short term compensation
expense provided on actual basis as and when to pay.
3.9 PROVISIONS:
a. The company does not make provision for doubtful debts and follows
the practice of writing off bad debts as and when determined.
b. A provision is recognized when an enterprise 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 not disclosed to
its present value and are determined based on best management estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
management estimates.
3.10 TAXATION:
Tax expense comprises both current and deferred taxes. Current Income
Tax is measured as the amount expected to be paid to the tax
authorities in accordance with the Indian Income Tax Act, 1961 enacted
in India and tax laws prevailing in the respective tax jurisdictions
where the company operates. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted, at the
reporting date. Deferred Income Tax reflects the impact of current
year timing differences between taxable income and accounting income
for the year and reversal of timing differences of earlier years.
Deferred Tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the Balance Sheet date. Deferred income
tax relating to items recognized directly in equity is recognized in
equity and not in the Statement of Profit and Loss.
Deferred tax assets have been recognized only to the extent there is
reasonable certainty that the assets can be realized in future. However
where there is unabsorbed depreciation or carry forward loss under
taxation laws, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and written down or written up
to reflect the amount that is reasonably/ virtually certain, as the
case may be, to be realized.
3.11 LEASED ASEETS:
The company leased some equipments to M/S BMK
Hospitality Services Pvt. Ltd. under operating lease
agreement. The particulars of the lease are as under:
Value of Assets : 1,87,912.00
Margin paid by the Lessee : NIL
Lease Value : 9,60,000.00
Lease Tenure : 48 month
Monthly Lease Rent : Rs. 20,000.00 per month
Depreciation Eligibility : Lessor
3.12 EARNIG PER SHARE (EPS):
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholder (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year. For the purpose
of calculating Diluted Earning Per Share, the net profit or loss for
the year attributable to equity shareholder and the weighted average
number of shares outstanding during he year are adjusted for the
effects of all dilative potential Equity Shares.
3.13 SEGMENT REPORTING:
Identification of segments: The company''s operating businesses are
organized and managed separately according to the nature of products
and services provided, with each segment representing a strategic
business unit that offers different products and services in the
market. The analysis of geographical segments is based on the areas in
which operating divisions of the company operate.
Allocation of common costs: Common allocable costs are allocated to
each segment according to the relative contribution of each segment.
Unallocated items: Unallocated items include general corporate income
and expense items which are not allocated to any business segment.
Segment accounting policies: The company prepares its segment
information in conformity with the accounting policies adopted for
preparing and presenting the financial statements of the company as a
whole.
3.14 ALLOCATION OF OVERHEADS AMONG THE UNITS/ SEGMENT:
a. Direct Expenses related to the manufacturing units or the braches
has been directly accounted for in the respective units/branches and
common overheads have been allocated among units/ branches in the ratio
of the gross operating revenue of the respective units/ branches.
b. The direct expenses related to services being provided by the
company have been clubbed with the respective accounting heads.
c. The company follows the accounting policy of disclosing of freight
and distribution cost as net off.
3.15 IMPAIRMENT:
At each balance sheet date, the management reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets were impaired.
If any such indication exists, the recoverable amount of the assets is
estimated in order to determine the extent of impairment loss. The
recoverable amount is higher of net selling price of an asset and value
in use determined by discounting the estimated future cash flow
expected from continuing use assets to their present value.
3.16 CONTINGENT LIABILITIES:
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
3.17 CASH AND CASH EQUIVALENT:
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less
3.18 SERVICE TAX CREDIT:
Service Tax credit on input services is accounted for on accrual basis
on receipt of input services and it does not form part of cost of such
services.
d. The rights, power and preference relating to each class of shares:
(i) The company has only one class of shares having a par value of Rs.
10/- per share. Each holder of Equity Shares is entitled to vote per
share. The company declares and pay dividend in Indian Rupees.
(ii) In the event of liquidation of the company, the holders of equity
shares will be eligible to receive the remaining assets of the company
after distribution of all preferential amounts. The distribution will
be in proportions to the number of equity shares held by the
shareholders.
Term Loan from Bank: Term loan from Axis Bank Ltd. , B-2, B-3,Sector-16
Noida, U.P. was taken in 2011-12 and is repayable in 24 equal monthly
instalments and is secured by way of extension of 1st Charges on entire
existing/future moveable fixed assets, other than vehicle not funded by
the bank and cable TV network of the Company, and personal guarantees
of the promoter Directors. Company has not defaulted in repayment.
Vehicle Loans: The Company has availed vehicle loans for purchase of
vehicles from Kotak Mahindra Primes Ltd from time to time. The
respective loans are repayable over a period of five years in monthly
instalments and are secured by way of hypothecation of respective
vehicles financed under the respective loan. Company has not defaulted
in repayment.
Mar 31, 2013
1.1. CHANGE IN ACCOUNTING POLICY:
i. The accounting policies adopted in the preparation for financial
statements are consistent with those of the previous year.
ii. The preparation of financial statements in conformity with
generally accepted accounting principles in India (Indian GAAP)
requires the management to make estimates, judgment 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 period.
1.2. REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
Sale of goods
Revenue from domestic sale of goods is recognized when all the
significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are not economic benefits flowing to
the Company. Hence, they are excluded from revenue.
Export sales are recognized at the time of handing over of export
consignment to authorities for clearance.
Income from services :
Revenue from hotel operations, channel marketing and from maintenance
contracts are recognized pro-rata over the period of the contract as
and when services are rendered. The company collects service tax on
behalf of the government and, therefore, it is not an economic benefit
flowing to the Company.
Hence, it is excluded from revenue.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
1.3. FIXED ASSETS AND DEPRECIATION:
Tangible Assets:
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any directly attributable cost of
bringing the asset to its working condition for its intended use.
Expenditure for addition, improvement and renewal are capitalized and
all other expenditure on existing fixed assets, including day to day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of Profit and Loss for the period which during
which the expenses are incurred.
Intangible Assets:
The Company capitalizes software where it is reasonably estimated that
the software has an enduring useful life. Software is depreciated over
an estimated useful life of three yea Any subsequent amount incurred
in up-gradation or improvement of the software is charged to profit and
loss account as an expenses.
Capital work-in-progress:
Capital work-in-progress comprises of the cost of assets that are not
yet ready for their intended use at the reporting date. Cost of
material and other expenses incurred on such material are shown as
Capital work- in-progress for capitalization.
Depreciation :
Depreciation other than on land and capital work-in- progress is
charged on Straight-line method in accordance with the rates prescribed
in Schedule XIV of the Companies Act, 1956 on all fixed assets.
Depreciation on the amount of addition made to fixed assets due to
up-gradation is provided at the rate applied to the existing assets on
pro-rata basis.
The company has used the following rates to provide depreciation on its
fixed assets:
Rates (SLM)
Factory Building 3.34%
Plant and Machinery, Electrical Fittings 4.75%
Furniture and Fixtures 6.33%
Vehicles 9.50%
CATV Network 5.28%
Impairment of tangible and intangible assets:
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, the company estimates the asset s recoverable amount. An
asset s recoverable amount is the higher of an asset s net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset. In determining net selling price, recent
market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss, except
for previously revalued tangible fixed assets, where the revaluation
was taken to revaluation reserve. In this case, the impairment is also
recognized in the revaluation reserve up to the amount of any previous
revaluation.
1.4 INVENTORY VALUATION:
Raw materials, components, stores, stock-in-trade and packing materials
are valued at cost or net realizable value whichever is less. However,
material and other items held for use in the production of inventories
are not written down below the cost if the finished goods in which they
will be incorporated are expected to be sold at or above cost. Cost of
raw materials, components, stores, stock in trade is determined on a
moving weighted average basis.
Semi-finished goods is valued at estimated cost. Finished goods are
valued at cost or net realizable value whichever is less.
The cost of Semi-finished goods and finished goods include cost of
conversion and other cost incurred in bringing the inventories to their
present condition and location.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
1.5. VALUATION OF INVESTMENT:
Investments, which are readily realizable 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.
Current investments are carried in the financial statements at lower of
cost and fair value deter- mined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
1.6. FOREIGN CURRENCY TRANSACTIONS: i. INDIA OPERATIONS :
a. Initial Recognition :
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
realization. Foreign Currency transactions are recorded at the exchange
rate prevailing on the date of the transaction.
b. Exchange Differences:
The exchange difference between the rate prevailing on the date of
transaction and on the date of settlement is recognized as income or
expenses as the case may be.
Monetary assets and liabilities related to foreign currency remaining
unsettled at the end of the year are translated at the exchange rate
prevailing on the date on which transaction is recorded. Exchange
differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded or reported in previous financial
statements, are recognized as income or as expense in the year in which
they arise.
In accordance with MCA notification on Accounting Standard - 11 on The
Effects of Changes in Foreign Exchange Rates", in respect of long term
foreign currency loan taken for acquisition of assets, the exchange
difference arising on reporting of said loan is adjusted to the cost of
the assets.
c. Forward Exchange Contract:
In respect of forward exchange contracts entered into by the Company,
the difference between the contracted rate and the rate at date of
transaction is recognized as gain or loss over the period of contract
except for difference in respect if liabilities incurred for acquiring
fixed assets from a country outside India in which case such difference
is adjusted in the carrying amount of the respective fixed assets.
Exchange difference on such contracts are recognized in the statement
of profit and loss in the year in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of forward exchange
contract is recognized as income or as expenses for the year.
ii. FOREIGN BRANCH OFFICE OPERATIONS :
a. The assets and liabilities, both monetary and non- monetary, of the
foreign operation are translated at the exchange rate prevailing on the
balance sheet date.
b. Sales and Cost of material of the foreign operation are translated
by applying monthly average exchange rate, Administrative expenses of
the foreign operation are translated by applying quarterly average
exchange rates; and
c. All resulting exchange differences are accumulated in Foreign
Currency Translation Reserve.
1.7 FEE FOR TECHNICAL SERVICES:
Fee for technical services are charged to the profit and loss account
over the period of the agreement for technical services.
1.8 EMPLOYEE BENEFITS:
a. Defined Contribution Plan :
The Company has defined contribution plan for post employment benefits
in the form of provident fund for all employees which are administrated
by Regional Provident Fund Commissioner. Provident Fund and Family
Pension Scheme are classified as defined contribution plan as the
company has no further obligation beyond making the contribution The
Company s contribution to defined contribution plans are charged to
Profit and Loss Statement of the year when the contribution to the
respective funds are due. There are no other obligations other than
the contribution payable to the respective funds.
b. Defined benefits plan :
Company s liability toward Gratuity under the Payment of Gratuity Act,
1972 is defined obligation and provided for on the basis of actuarial
valuation made at the end of each financial year by an independent
actuary.
c. Compensated Absences :
Liability on account of other employee benefits like leave travel
assistance, medical reimbursement are accounted for on accrual basis.
Liability on account of leave encashment to employees was considered as
short term compensation expense provided on actual basis as and when to
pay.
1.9 PROVISIONS :
a. The Company does not make provision for doubtful debts and follows
the practice of writing off bad debts as and when determined.
b. A provision is recognized when an enterprise 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 not disclosed to
its present value and are determined based on best management estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
management estimates.
1.10 TAXATION:
Tax expense comprises both current and deferred taxes. Current Income
Tax is measured as the amount expected to be paid to the tax
authorities in accordance with the Indian Income Tax Act, 1961 enacted
in India and tax laws prevailing in the respective tax jurisdictions
where the Company operates. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted, at the
reporting date.
Deferred Income Tax reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier yea Deferred Tax is
measured using the tax rates and the tax laws enacted or substantively
enacted at the Balance Sheet date. Deferred income tax relating to
items recognized directly in equity is recognized in equity and not in
the Statement of Profit and Loss.
Deferred tax assets have been recognized only to the extent there is
reasonable certainty that the assets can be realized in future. However
where there is unabsorbed depreciation or carry forward loss under
taxation laws, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and written down or written up
to reflect the amount that is reasonably/ virtually certain, as the
case may be, to be realized.
1.11 LEASED ASEETS:
The Company leased some equipments to M/S BMK Hospitality Services Pvt.
Ltd. under operating lease agreement. The particulars of the lease are
as under:
Value of Assets : 1,87,912.00
Margin paid by the Lessee : NIL
Lease Value : 9,60,000.00
Lease Tenure : 48 month
Monthly Lease Rent : 20,000.00 per month
Depreciation Eligibility : Lessor
1.12 EARNIG PER SHARE (EPS):
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholder (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year.
For the purpose of calculating Diluted Earning Per Share, the net
profit or loss for the year attributable to equity shareholder and the
weighted average number of shares outstanding during he year are
adjusted for the effects of all dilative potential Equity Shares.
1.13.SEGMENT REPORTING:
Identification of segments
The Company s operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and services in the market. The analysis of geographical
segments is based on the areas in which operating divisions of the
company operate.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment .
Unallocated items
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
1.14. ALLOCATION OF OVERHEADS AMONG THE UNITS/ SEGMENT:
a. Direct Expenses related to the manufacturing units or the braches
has been directly accounted for in the respective units/branches and
common overheads have been allocated among units/ branches in the ratio
of the gross operating revenue of the respective units/ branches.
b. The direct expenses related to services being provided by the
Company have been clubbed with the respective accounting heads.
c. The Company follows the accounting policy of disclosing of freight
and distribution cost as net off.
1.15 IMPAIRMENT:
At each balance sheet date, the management reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable
amount of the assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of net selling price
of an asset and value in use determined by discounting the estimated
future cash flow expected from continuing use assets to their present
value.
1.16 CONTINGENT LIABILITIES:
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
1.17 CASH AND CASH EQUIVALENT:
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less
1.18 MEASUREMENT OF EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations.
In its measurement, the Company does not include depreciation and
amortization expense, finance costs and tax expense.
1.19 SERVICE TAX CREDIT:
Service Tax credit on input services is accounted for on accrual basis
on receipt of input services and it does not form part of cost of such
services.
Mar 31, 2010
1. ACCOUNTING CONVENTIONS:
The financial statements of the Company are prepared under historical
cost convention and in accordance with applicable accounting standards
issued by the Institute of Chartered Accountants of India, except where
otherwise stated.
2. REVENUE RECOGNITION:
a) Domestic sales are recognised when the risk and rewards of the
ownership are passed on the customer which is generally on dispatch of
goods. Sales are net of sales tax and sales return.
b) Export sales are recognised at the time of handing over of export
consignment to authorities for clearance.
c) Income from services is distributed over the period of service and
recognized accordingly.
d) Interest is recognized to the extent of actual credit by the bank.
3. FIXED ASSETS AND DEPRECIATION:
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any directly attributable cost of
bringing the asset to its working condition for its intended use.
Expenditure for addition, improvement and renewal are capitalized and
expenditure for repairs and maintenance are charged to Profit and Loss
Account. Depreciation other than on land and capital work in progress
is charged pro-rata on straight-line method, in accordance with the
rates prescribed in Schedule XIV of the Companies Act, 1956 on all
fixed assets. Depreciation on the amount of addition made to fixed
assets due to up-gradation is provided at the rate applied to the
existing assets.
4. INVENTORY VALUATION:
a. Raw materials, components, stores and packing materials are valued
at cost. Cost for this purpose is calculated, on a weighted average
method.
b. Semi-finished goods is valued at estimated cost.
c. Finished goods are valued at cost or market value whichever is
less.
d. The cost of Semi-finished goods and finished goods include cost of
conversion and other cost incurred in bringing the inventories to their
present condition and location.
5. FOREIGN CURRENCY TRANSACTIONS: I. INDIA OPERATIONS :
a. Initial Recognition : Foreign currency transactions are recorded in
the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency
at the date of the realization.
b. Exchange Differences: Monetary assets and liabilities related to
foreign currency remaining unsettled at the end of the year are
translated at the exchange rate prevailing on the date on which
transaction is recorded. Exchange differences arising on the
settlement of monetary items or on restatement of monetary items at
rates different from those at which they were initially recorded or
reported in previous financial statements, are recognized as income or
as expense in the year in which they arise.
c. Forward Exchange Contract: In respect of forward exchange contracts
entered into by the Company, the difference between the contracted rate
and the rate at date of transaction is recognized as gain or loss over
the period of contract except for difference in respect if liabilities
incurred for acquiring fixed assets from a country outside India in
which case such difference is adjusted in the carrying amount of the
respective fixed assets. Exchange difference on such contracts are
recognized in the statement of profit and loss n the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expenses for the year.
II. FOREIGN BRANCH OFFICE OPERATIONS :
a) The assets and liabilities, both monetary and non-monetary, of the
overseas operations are translated at the exchange rate prevailing on
the balance sheet date.
b) Sales and Cost of material of the overseas operations are translated
by applying monthly average exchange rate, Administrative expenses of
the foreign operations are translated by applying quarterly average
exchange rates.
c) All resulting exchange differences are accumulated in Foreign
Currency Translation Reserve.
6. FEE FOR TECHNICAL SERVICES:
Fee for technical services are charged to the profit and loss account
over the period of the agreement for technical services.
7. RETIREMENT AND OTHER EMPLOYEE BENEFITS:
a. Defined Contribution Plan : The Company has defined contribution
plan for post employment benefits in the form of provident fund for all
employees which are administrated by Regional Provident Fund
Commissioner. Provident fund is classified as defined contribution
plan as the Company has no further obligation beyond making the
contribution. The CompanyÃs contribution to defined contribution plans
are charged to Profit and Loss Account as and when incurred.
b. Defined benefits plan : The Company has defined benefits plan for
post employment benefits in the form of Gratuity. Liability for defined
benefit plan is provided on the basis of valuation, as at the Balance
Sheet date, carried out by an independent actuary.
c. Other employee benefits like leave travel assistance, medical
reimbursement are accounted for on accrual basis.
8. PROVISIONS :
a. The Company does not make provision for doubtful debts and follows
the practice of writing off bad debts as and when determined.
b. A provision is recognized when an enterprise 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 not disclosed to
its present value and are determined based on best management estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
management estimates.
9. PROVISION FOR TAXATION:
Tax expense comprises both current and deferred taxes. Current Income
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred Income Tax
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years. Deferred Tax is measured based on the tax
rates and the tax laws enacted or substantively enacted at the Balance
Sheet date. However as a matter of prudence deferred tax assets have
been recognized only to the extent there is a deferred tax liability.
11. EARNIG PER SHARE (EPS):
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholder ( after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year. For the purpose of
calculating Diluted Earning Per Share, the net profit or loss for the
year attributable to equity shareholder and the weighted average number
of shares outstanding during he year are adjusted for the effects of
all dilative potential Equity Shares.
12. ALLOCATION OF OVERHEADS AMONG THE UNITS/SEGMENT:
a. Expenses related for the operations of cable TV Network has been
directly appropriated against the revenue of cable TV Operations only.
b. The direct expenses related to services being provided by the
Company has been directly appropriated against the revenue of such
services.
c. Direct Expenses related to the manufacturing units has been
directly accounted for in the respective units.
d. Common overheads have been allocated among units/branches in the
ratio of the gross operating revenue of the respective units/branches.
13. IMPAIRMENT:
At each balance sheet date, the management reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable
amount of the assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of net selling price
of an asset and value in use determined by discounting the estimated
future cash flow expected from continuing use assets to their present
value.
14. INVESTMENT:
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long term investments are carried at
cost. However, provision for diminution in value is made to recognize
a decline other than temporary in the value of such investments.
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