Mar 31, 2015
1.1. Basis of preparation of financial statements
(a) Basis of Accounting:
The financial statements have been prepared and presented under the
historical cost convention, on the accrual basis of accounting in
accordance with the accounting principles generally accepted in India
(''Indian GAAP'') and comply with the Accounting standards prescribed in
Companies (Accounting Standards) Rules, 2006 which continue to apply
under Section 133 of the Companies Act, 2013, read with Rule 7 of
Companies (Accounts) Rules, 2014, and other relevant provisions of the
Companies Act, 1956, to the extent applicable.
(b) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgment, estimates and assumptions
that affect the reported amounts of revenue, expenses, assets and
liabilities and the disclosure of contingent liabilities on the date of
Financial Statements. 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 amount of assets or
liabilities in future periods.
1.2 Tangible and Intangible Assets:
(a) Tangible Fixed Assets
Tangible Fixed assets are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. The cost
comprises purchase price, borrowing cost if capitalization criteria are
met and directly attributable cost of bringing the asset to its working
condition for the intended use. Any trade discounts and rebates are
deducted in arriving at the purchase price.
Expenditure related to an item of fixed assets is added to its book
value only if it increases the future benefits from the existing asset
beyond its previously assessed standard of performance. All other
expenses 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 during which such expenses
are incurred.
(b) Intangible Assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible asset
are carried at cost less accumulated amortization and accumulated
impairment loss, if any. Profit or loss on disposal of intangible asset
is recognized in the Statement of Profit and Loss.
(c) Capital Work in Progress and Capital Advances
Cost of Assets not ready for intended use, as on the balance sheet
date, is shown as capital work in progress.
(d) Depreciation and Amortization
Depreciation on tangible fixed assets is provided using the
Straight-Line Method using the rates arrived at based on the useful
lives estimated by the management. Due to the seizer of factory
premises by the Provident Fund Authorities the management of the
Company was unable to access to the asset register of Company to do the
exercise to charge depreciation based on revised remaining useful life
of the assets as per the revised schedule II of Company''s Act 2013 and
therefore, the amount of depreciation for the year is calculated on the
basis of rates applied in the earlier years.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. The company uses a rebuttable
presumption that the useful life of an intangible asset will not exceed
five years from the date when the asset is available for use. If the
persuasive evidence existence to the affect that useful life of an
intangible asset exceed five years, the company amortizes the
intangible asset over the best estimate of its useful life.
1.3 Revenue Recognition
There has not been any sale of goods and services during the period.
Although revenue is recognized to the extent that is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of Goods:
Revenue from 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 the sales tax
and VAT on behalf of the government and, therefore, these are not
economic benefits flowing to the company. Hence, they are excluded from
revenue. Excise duty deducted from revenue (gross) is the amount that
is included in the revenue (gross) and not the entire amount of
liability arising during the period.
Dividends:
Dividend income is recognized when the company''s right to receive
dividend is established.
1.4 Inventories
(a) Inventories are valued at the lower of cost and net realizable
value except in the case of tools in stores and spares which are valued
at cost and tools in tool crib which are valued at the book value.
(b) The cost of purchase material is determined on the FIFO method.
Cost of inventory comprises all cost of purchase, duties, taxes (other
than those subsequently recoverable from tax authorities) and all other
cost incurred in bringing the inventory to their present location and
condition.
(c) Work-in-progress and manufacturing goods are valued at lower of
cost and net realizable value. Cost includes direct materials and
labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost of finished goods includes excise duty.
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 Investments:
Investments, which are readily realizable and indented 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
as brokerage, fees and duties. If an investment is acquired, or partly
acquired, by the issue of shares or other securities, the acquisition
cost is the fair value of the securities issued.
1.6 Retirement and other employee benefits:
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provided fund is charged
to the statement of profit and loss for the period when the
contributions are due. Owing to the financial sickness, the Company
has been irregular in depositing the provided contribution with the
appropriate authorities. Any settlement/ dues of provident fund shall
be paid as per order of competent authority.
The company operates gratuity plan for the benefit of its employees.
The cost of providing benefit under gratuity is determined on the basis
of actuarial valuation at each year end. Actuarial gains and losses for
gratuity plan are recognized in full in the period in which they occur
in the statement of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
1.7 Provisions:
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date
adjusted to reflect the current best estimates.
1.8 Contingent Liability:
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.
1.9 Earnings per share:
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the period. The weighted
average no. of equity shares outstanding during the period is adjusted
for events such as bonus issue, bonus element in a right issue, share
split, and reserve share split (consolidation of shares) that have
changed the no. of equity shares outstanding, without a corresponding
change in resources.
For the purpose of calculating diluted EPS, the net profit or loss for
the year attributable to equity shareholders and the weighted average
no. of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
1.10 Cash and Cash Equivalents:
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments (if any)
with an original maturity of three months or less.
1.11 Income Tax:
a) Deferred Taxes: The Company has carry forward losses and unabsorbed
depreciation available for set-off under the Income Tax Act, 1961.
However, in view of present uncertainty regarding generation of
sufficient future income, net deferred tax assets at the year end
including related credit / charges for the year have not been
recognized in these accounts on prudent basis.
b) Current Taxes: In view of carry forward losses, unabsorbed
deprecation and having the status of a SICK INDUSTRIAL COMPANY declared
by the BIFR, the Company does not expect any current tax liability for
the Financial Years 2007-08 to 2014-15 (Assessment Years 2008-09 to
2015-16 and hence no provision has been made for current taxes for
these years.
1.12 Measurement of EBITDA:
The company has opted to present earnings before interest(finance
cost), tax, depreciation and amortization(EBITDA) as a separate line
item on the face of the statement of Profit & Loss for the year. The
Company measures EBITDA on the basis of profit/(loss) from continuing
operations.
Mar 31, 2014
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. The significant accounting policies are as
follows:
(i) Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgment, estimates and assumptions
that affect the reported amounts of revenue, 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.
(ii) Tangible Fixed Assets:
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing cost if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Expenditure related to an item of fixed assets is added to its book
value only if it increases the future benefits from the existing asset
beyond its previously assessed standard of performance. All other
expenses 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 during which such expenses
are incurred.
Depreciation on tangible fixed assets is calculated on straight-line
basis using the rates arrived at based on the useful lives estimated by
the management, or those prescribed under the schedule XIV to the
Companies Act, 1956, whichever is higher.
(iii)Intangible Fixed Assets:
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. The company uses a rebuttable
presumption that the useful life of an intangible asset will not exceed
five years from the date when the asset is available for use. If the
persuasive evidence existence to the affect that useful life of an
intangible asset exceed five years, the company amortizes the
intangible asset over the best estimate of its useful life.
The amortization period and the amortization method are reviewed at
least at each financial year end. If the expected useful life of the
asset is significantly different from the previous estimates, the
amortization period is changed accordingly.
Research and Development:
Amortization of the asset begins when development is complete and the
asset is available for use. It is amortized on a straight-line basis
over the period of expected future benefit from the related project,
i.e., the estimated useful life of five years. Amortization is
reorganized in the statement of profit and loss. Expenditure of
capital nature is added to the fixed assets.
Expenditure of deferred revenue nature incurred on Research and
development of products which are expected to be
technically/commercially viable are written off over a period of 5
years from the year of commencement of its commercial production. As
certified by the company Rs 1287059/- on account of amortization of
such expenditure have been charged to profit and loss account
Technical Know-how/Exhibition Expenses:
Technical Know-how fees/ expenses on exhibition of proto-type of a
product under development which is expected to be technically/
commercially viable will be written off over a period of five years
from the year of commencement of its commercial production.
(iv)Investments:
Investments, which are readily realizable and indented 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
as brokerage, fees and duties. If an investment is acquired, or partly
acquired, by the issue of shares or other securities, the acquisition
cost is the fair value of the securities issued.
v) Inventories:
Inventories are valued at the lower of cost and net releasable value
except in the case of tools in stores and spares which are valued at
cost and tools in tool crib which are valued at the book value.
The cost of purchase material is determined on the FIFO method.
Work-in-progress and manufacturing goods are valued at lower of cost
and net realizable value. Cost includes direct materials and labor and
a proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty.
The cost of tools in tool crib is amortized over useful life of tools.
Consumables are charged to the statement of profit and loss in the year
of purchase.
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.
(vi)Revenue Recognition:
There has not been any sale of goods and services during the period.
Although revenue is recognized to the extent that is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of Goods:
Revenue from 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 the sales tax
and VAT on behalf of the government and, therefore, these are not
economic benefits flowing to the company. Hence, they are excluded from
revenue. Excise duty deducted from revenue (gross) is the amount that
is included in the revenue (gross) and not the entire amount of
liability arising during the period.
Income from Services:
Revenues 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.
Dividends:
Dividend income is recognized when the company''s right to receive
dividend is established by the reporting date.
(vii) Retirement and other employee benefits:
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provided fund is charged
to the statement of profit and loss for the period when the
contributions are due. Owing to the financial sickness, the Company has
been irregular in depositing the provided contribution with the
appropriate authorities
The company operates gratuity plan for the benefit of its employees.
The cost of providing benefit under gratuity is determined on the basis
of actuarial valuation at each year end. Actuarial gains and losses for
gratuity plan are recognized in full in the period in which they occur
in the statement of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats its accumulated leave expected to be carried forward
beyond 12 months, as long term employee benefit for measurement
purpose. Such long term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year end.
(viii) Earnings per share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average no. of equity shares outstanding during the period. The
weighted average no. of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a right
issue, share split, and reserve share split (consolidation of shares)
that have changed the no. of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted EPS, the net profit or loss for
the period attributable to equity shareholders and the weighted average
no. of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
Earning per Share
Particular 31.03.2014 30.06.2013
Net profit available for equity shareholders (88067965) (2482195)
Basic and Diluted EPS of face value of Rs.10/- (9.37) (0.26)
each
(ix) Provisions:
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date
adjusted to reflect the current best estimates.
(x) Contingent Liability:
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.
Jun 30, 2013
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. The significant accounting policies are as
follows:
(i) Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgment, estimates and assumptions
that affect the reported amounts of revenue, 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.
(ii) Tangible Fixed Assets:
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing cost if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Expenditure related to an item of fixed assets is added to its book
value only if it increases the future benefits from the existing asset
beyond its previously assessed standard of performance. All other
expenses 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 during which such expenses
are incurred.
Depreciation on tangible fixed assets is calculated on straight-line
basis using the rates arrived at based on the useful lives estimated by
the management, or those prescribed under the schedule XIV to the
Companies Act, 1956, whichever is higher.
(iii) Intangible Fixed Assets:
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. The company uses a rebuttable
presumption that the useful life of an intangible asset will not exceed
five years from the date when the asset is available for use. If the
persuasive evidence existence to the affect that useful life of an
intangible asset exceed five years, the company amortizes the
intangible asset over the best estimate of its useful life.
The amortization period and the amortization method are reviewed at
least at each financial year end. If the expected useful life of the
asset is significantly different from the previous estimates, the
amortization period is changed accordingly.
Research and Development:
Amortization of the asset begins when development is complete and the
asset is available for use. It is amortized on a straight-line basis
over the period of expected future benefit from the related project,
i.e., the estimated useful life of five years. Amortization is
reorganized in the statement of profit and loss. Expenditure of capital
nature is added to the fixed assets.
Expenditure of deferred revenue nature incurred on Research and
development of products which are expected to be
technically/commercially viable are written off over a period of 5
years from the year of commencement of its commercial production. As
certified by the company Rs 1287059/- on account of amortization of
such expenditure have been charged to profit and loss account
Technical Know-how/Exhibition Expenses:
Technical Know-how fees/ expenses on exhibition of proto-type of a
product under development which is expected to be technically/
commercially viable will be written off over a period of five years
from the year of commencement of its commercial production.
(iv) Investments:
Investments, which are readily realizable and indented 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
as brokerage, fees and duties. If an investment is acquired, or partly
acquired, by the issue of shares or other securities, the acquisition
cost is the fair value of the securities issued.
(v) Inventories:
Inventories are valued at the lower of cost and net releasable value
except in the case of tools in stores and spares which are valued at
cost and tools in tool crib which are valued at the book value.
The cost of purchase material is determined on the FIFO method.
Work-in-progress and manufacturing goods are valued at lower of cost
and net realizable value. Cost includes direct materials and labor and
a proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty.
The cost of tools in tool crib is amortized over useful life of tools.
Consumables are charged to the statement of profit and loss in the year
of purchase.
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.
(vi) Revenue Recognition:
There has not been any sale of goods and services during the period.
Although revenue is recognized to the extent that is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of Goods:
Revenue from 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 the sales tax
and VAT on behalf of the government and, therefore, these are not
economic benefits flowing to the company. Hence, they are excluded from
revenue. Excise duty deducted from revenue (gross) is the amount that
is included in the revenue (gross) and not the entire amount of
liability arising during the period.
Income from Services:
Revenues 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.
Dividends:
Dividend income is recognized when the company''s right to receive
dividend is established by the reporting date.
(vii) Retirement and other employee benefits: .
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provided fund is charged
to the statement of profit and loss for the period when the
contributions are due. Owing to the financial sickness, the Company has
been irregular in depositing the provided contribution with the
appropriate authorities
The company operates gratuity plan for the benefit of its employees.
The cost of providing benefit under gratuity is determined on the basis
of actuarial valuation at each year end. Actuarial gains and losses for
gratuity plan are recognized in full in the period in which they occur
in the statement of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats its accumulated leave expected to be carried forward
beyond 12 months, as long term employee benefit for measurement
purpose. Such long term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year end.
(viii) Earnings per share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders, (after
deducting preference dividends and attributable taxes) by the weighted
average no. of equity shares outstanding during the period. The
weighted average no. of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a right
issue, share split, and reserve share split (consolidation of shares)
that have changed the no. of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted EPS, the net profit or loss for
the period attributable to equity shareholders and the weighted average
no. of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
(ix) Provisions:
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date
adjusted to reflect the current best estimates.
(x) Contingent Liability:
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.
b) (i) Contingent liabilities that may arise due to
delayed/noncompliance of certain fiscal statues and claims lodged by
the ex-employees- amounts are unascertainable.
(ii) The financial liabilities on the account of legal cases pending
against the company amounts are unascertainable.
c) Estimated amount of the contract remaining to be executed on capital
account and not provided for Rs. 4593589/-
(xi) Cash and Cash Equivalents:
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments (if any)
with an original maturity of three months or less.
(xii) Income Tax:
a) Deferred Taxes: The Company has carry forward losses and unabsorbed
depreciation available for set-off under the Income Tax Act, 1961.
However, in view of present uncertainty regarding generation of
sufficient future income, net deferred tax assets at the yearend
including related credit / charges for the year have not been
recognized in these accounts on prudent basis.
b) Current Taxes: In view of carry forward losses and unabsorbed
deprecation, the Company does not expect any current tax liability for
the Financial Years 2007-08 to 2012-13 (Assessment Years 2008-09 to
2013-14) and hence no provision has been made for current taxes for
these years.
(xiii) Trade Receivables:
a) Trade Receivables includes Rs. 22848088 due from a concern of which
a Director was the proprietor till 06.11.1999. Maximum amount due at
any time during the period from the said concerns is Rs.22848088.
b) Trade Receivables include Rs.4824150 due from some of the
ex-distributors/customers of the company. The company is of the opinion
that the amount is fully recoverable on completion of final settlement
which is in progress. The company is confident of recovering the
amounts.
(xiv) Related Parties:
Associate of the Company and concern in which Key Management Personnel
have significant influence are as follows:
a) M/s. Garha Gears Ltd.
b) M/s. Garha Utilbrocce Tools Ltd.
c) M/s. S&H Gears Pvt. Ltd.
d) M/s. Garha Auto Distributors
e) M/s. Gajra Marketing
f) M/s. Kshipra Gears
g) M/s. Garha Tours& Travles
h) M/s. Abhimanyu Agro Pvt. Ltd.
i) M/s. Rani Agro Pvt. Ltd.
Key management personnel
a) Shri Surendra Singh : Managing Director
b) Shri Ranveer Singh : Director
Amount due to related parties (Associate Concerns) on balance sheet
date is Rs.253103934.
(xv) The Company does not possess information as to which of its
suppliers are ancillary industrial undertakings/ small scale industrial
undertakings holding permanent registration certificate issued by the
Directorate of Industries of a State or Union territory. Consequently,
the liability, if any, of interest which would be payable under The
Interest on Delayed Payments to Small Scale and Ancillary Industrial
Undertakings Act, 1992 cannot be ascertained. However, the Company has
not received any claims in respect of interest.
The Company does not possess information as to which of suppliers are
Small Scale Industrial Undertakings. Accordingly, the information
regarding total outstanding dues to Small Scale Industrial Undertakings
as at the year end and that regarding the names of Small Scale
Industrial undertakings to whom the Company owes more than Rs. 1.00
lakh and outstanding for more than 30 days has not been compiled and
hence not disclosed by the Company.
(xvi) The writ petition filed by the Company and admitted by the
Honorable High Court, Mumbai for the payment of minimum remuneration of
Rs. 1,27,307/- to the Late Managing Director for the period 01.04.1979
to 30.09.1981 (being the date of expiry of the terms of appointment of
the Managing Director) has not come up for hearing. The Company has
applied for the approval of the Department of Company Affairs, Ministry
of Law, Justice and Company Affairs, for the re-appointment of the
Managing Director for the period from 01.10.1981 to 30.09.1986, on the
terms and conditions approved by the shareholders in the General
Meeting of the Company. The total remuneration of Rs.6,05,207 for the
period from 01.04.1979 to 30.09.1986 has not been paid.
(xvii) Loans and Advance includes amounts due from private limited
company in which some of the Directors are members Rs.41252. Maximum
amount due at any time during the year from the said company is
Rs.41252.
(xviii) The net worth of the Company has been eroded on account of the
losses of year ended on 30.09.08. Based on the ABS as on 30.09.08 the
company has filed the reference U/s 15(1) of SIC (SP)Act, 1985 before
BIFR, and the same has been registered as case No. 27/2009 on
13.07.2009. The BIFR vide its order of hearing held on 06.01.2011
declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1)
(o) of Sick Industrial Companies (Special Provisions) Act 1985 and
appointed IDBI as the Operating Agency (OA).The Operating Agency is in
process to formulate a rehabilitation scheme for revival of the
Company. Meantime, the promoters of the Company are putting best of
their efforts for One Time Settlement (OTS) of loans from the Secured
Lenders and have succeeded in OTS with SBI, IDBI.MPAVN and MPSIDC.
Considered due to full & final payment of OTS Amount is still pending.
(xx) The unsecured loans are received from the companies of the
promoters group to start the operation of the company.
The interest rate on the said loans are not decided yet and hence no
provisions for any interest payable, if any, is made in the accounts.
(xxii) 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 the 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 expenses, finance costs and tax expense.
(xxiii) Previous year figures have been regrouped and rearranged
wherever necessary.
(xxiv) Change in Accounting Year.
During the year under review, the Company has changed its accounting
year from 12 months to £ months resulting the present accounting is
for 9 months only commencing from 1st Oct.'' 12 to 30th June''13 and
therefore figure of previous year are not comparable.
Sep 30, 2012
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. The significant accounting policies are as
follows:
(i) Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgment, estimates and assumptions
that affect the reported amounts of revenue, 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.
(ii) Tangible Fixed Assets:
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing cost if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Expenditure related to an item of fixed assets is added to its book
value only if it increases the future benefits from the existing asset
beyond its previously assessed standard of performance. All other
expenses 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 during which such expenses
are incurred.
Depreciation on tangible fixed assets is calculated on straight-line
basis using the rates arrived at based on the useful lives estimated by
the management, or those prescribed under the schedule XIV to the
Companies Act, 1956, whichever is higher.
(iii) Intangible Fixed Assets:
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. The company uses a rebuttable
presumption that the useful life of an intangible asset will not exceed
five years from the date when the asset is available for use. If the
persuasive evidence existence to the affect that useful life of an
intangible asset exceed five years, the company amortizes the
intangible asset over the best estimate of its useful life.
The amortization period and the amortization method are reviewed at
least at each financial year end. If the expected useful life of the
asset is significantly different from the previous estimates, the
amortization period is changed accordingly.
Research and Development:
Amortization of the asset begins when development is complete and the
asset is available for use. It is amortized on a straight-line basis
over the period of expected future benefit from the related project,
i.e., the estimated useful life of five years. Amortization is
reorganized in the statement of profit and loss. Expenditure of capital
nature is added to the fixed assets.
Expenditure of deferred revenue nature incurred on Research and
development of products which are expected to be
technically/commercially viable are written off over a period of 5
years from the year of commencement of its commercial production. As
certified by the company Rs 1716078/- on account of amortization of
such expenditure have been charged to profit and loss account
Technical Know-how/Exhibition Expenses:
Technical Know-how fees/ expenses on exhibition of proto-type of a
product under development which is expected to be technically/
commercially viable will be written off over a period of five years
from the year of commencement of its commercial production.
(iv) Investments:
Investments, which are readily realizable and indented 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
as brokerage, fees and duties. If an investment is.acquired, or partly
acquired, by the issue of shares or other securities, the acquisition
cost is the fair value of the securities issued
(v) Inventories:
Inventories are valued at the lower of cost and net realisable value
except in the case of tools in stores and spares which are valued at
cost and tools in tool crib which are valued at the book value.
The cost of purchase material is determined on the FIFO method.
Work-in-progress and manufacturing goods are valued at lower of cost
and net realizable value.
Cost includes direct materials and labor and a proportion of
manufacturing overheads based on normal operating capacity. Cost of
finished goods includes excise duty.
The cost of tools in tool crib is amortized over useful life of tools.
Consumables are charged to the statement of profit and loss in the year
of purchase.
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.
(vi) Revenue Recognition:
There has not been any sale of goods and services during the year.
Although revenue is recognized to the extent that is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of Goods:
Revenue from 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 the sales tax
and VAT on behalf of the government and, therefore, these are not
economic benefits flowing to the company. Hence, they are excluded from
revenue. Excise duty deducted from revenue (gross) is the amount that
is included in the revenue (gross) and not the entire amount of
liability arising during the year.
Income from Services:
Revenues 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.
Dividends:
Dividend income is recognized when the company''s right to receive
dividend is established by the reporting date.
(vii) Retirement and other employee benefits:
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provided fund is charged
to the statement of profit and loss for the year when the contributions
are due. Owing to the financial sickness, the Company has been
irregular in depositing the provided contribution with the appropriate
authorities
The company operates gratuity plan for the benefit of its employees.
The cost of providing benefit under gratuity is determined on the basis
of actuarial valuation at each year end. Actuarial gains and losses for
gratuity plan are recognized in full in the period in which they occur
in the statement of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short- term employee benefit. The company
measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats its accumulated leave expected to be carried forward
beyond 12 months, as long term employee benefit for measurement
purpose. Such long term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year end.
(viii) Earnings per share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average no. of equity shares outstanding during the period. The
weighted average no. of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a right
issue, share split, and reserve share split (consolidation of shares)
that have changed the no. of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted EPS, the net profit or loss for
the period attributable to equity shareholders and the weighted average
no. of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
(ix) Provisions:
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date
adjusted to reflect the current best estimates.
(x) Contingent Liability:
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.
Sep 30, 2011
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. The significant accounting policies are as follows
i) Fixed assets: - Fixed assets are stated at cost less accumulated
depreciation. Cost of plant and machinery includes interest on
borrowings till the date of commissioning of the assets.
Depreciation is provided on the "Straight line basis" at the rates
and in the manner prescribed in Schedule XIV to the Companies Act,1956,
except in the case of lease hold land which is amortised over the
period of the lease.
ii) Inventories: - Inventories are valued at the lower of cost and net
realisable value except in the case of tools in stores and spares which
are valued at cost and tools in Tool Crib which are valued at book
value. The cost of purchased materials is determined on the basis of
first in first out method. The cost of work-in-process and manufactured
goods includes direct material cost, direct labour cost and appropriate
factory overheads computed on the basis of normal utilisation of the
production capacity. The cost of tools in Tool Crib is amortised over
useful life of the tools. Consumables are charged to the Profit and
Loss Account in the year of purchase.
iii) Current Investments are carried at fair value.
iv) Excise Duty paid/payable on production is charged to profit and
loss account in the year of manufacture and accordingly included while
valuing closing stock
v) Specific debts and loans and advances, identified as irrecoverable
or doubtful are written off or provided for respectively. All the debts
and loans and advances though shown recoverable and considered good
have become time barred and no provision has been made in accounts for
their bad and doubtfulness.
vi) Conversion/translation of foreign currency transactions:- There has
not been any conversion / translation of foreign currency transaction.
Current assets and current liabilities outstanding on balance sheet
date are translated on the dated exchange rates and the resulting
gains/losses are recognised in the profit and loss account.
vii) Revenue Recognition : - There has not been any sale of goods and
services during the year.
viii) Research & Development Expenditure :- Expenditure of revenue
nature incurred on research and development of products which are
expected to be technically/commercially viable is written off over a
period of five years, starting with the year of commencement of
commercial production. Expenditure of a capital nature is added to
fixed assets.
ix) Deferred Revenue Expenditure :- Technical know-how fees/expenditure
on exhibition of proto-type of a product under development which is
expected to be technically/commercially viable will be written off over
a period of 5 years from the year of commencement of its commercial
production,
(x) Retirement benefits: - Retirement benefits to employees are
provided for by way of provident fund, gratuity and leave encashment.
The monthly contributions to provident fund are charged to revenue
account. Provision for gratuity is made on the basis of an actuarial
valuation for all employees done on the balance sheet date. Provision
for leave encashment is based on an actuarial valuation as on the
balance sheet date of the liability arising on cessation/termination of
services of the employees.
Sep 30, 2010
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. "The significant accounting policies are as
follows :
i) Fixed assets: - Fixed assets are stated at cost less accumulated
depreciation. Cost of plant and machinery includes interest on
borrowings till the date of commissioning of the assets,
Depreciation is provided on the "Straight line basis" at the rates and
in the manner prescribed in Schedule XIV (o the Companies Act, 1956,
except in the case of lease a held land which is amortised over the
period of the lease.
ii) Inventories: - Inventories are valued at the lower of cost and net
realisable value except in the ease of tools in stores and spares which
are valued at cost and tools in Tool Crib which are valued at book
value. The cost of purchased materials is determined on the basis of
first in first out method. The cost of work-in-process and manufactured
goods includes direct material cost, direct labour cost and appropriate
factory overheads computed on the basis of normal utilisation of the
production capacity. The cost of tools in Tool Crib is amortised over
useful life of the tools.Consumables are charged to the Profit and Loss
Account in the year of purchase.
iii) Current Investments are carried at fair value.
vi) Excise Duty paid/payable on production is charged to profit and
Joss account in the year of manufacture and accordingly Included while
valuing closing slock.
v) Specific debts and loans and advances, identified as irrecoverable
or doubtful are written offer provided for respetively. All the debts
and loans and advances though shown recovevable and considered good
have become time barred and no provision has been made in accounts for
their bad and doubtfulness.
vi) Conversion/translation of foreign currency transactions:- There has
not been any conversion /Translation of foreign currency transaction.
Current, assets and current liabilities outstanding on balance sheet
date are translated on The dated exchange rates and the resulting
gains/losses are recognised in the profit and loss account,
vii) Revenue Recognition : - There has not been any sale of goods and
services during the year.
viii) Research & Development Expenditure :- Expenditure of revenue
nature incurred on research and development of products which are
expected to be technically/commcrcially viable is written off over a
period of five years. starting with the year of commencement of
commercial product ion Expenditure of a capital nature is added of
fixed assets.
ix.) Deferred Revenue Expenditure :-
Technical know-how fees/expenditure on exhibition of proto-type of a
product under development which is expected to be
technically/commercially viable will be written off over a period of 5
years from the year of commencement of its commercial production.
(x) Retirement benefits: - Retirement benefits to employees are
provided for by way of provident fund, gratuity and leave encashment.
The monthly contributions to provident fund are charged to revenue
account. Provision for gratuity is made on the basis of an actuarial
valuation for all employees done on the balance sheet date. Provision
tor leave encashment is based on an actuarial valuation as on the
balance sheet date of the liability arising on cessation/terminal ion
of services of the employees.
Sep 30, 2009
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting and in accordance with
the standards on accounting issued by the Institute of Chartered
Accountants of India and referred to in Section 211 (3C) of the
Companies Act, 1956. The significant accounting policies are as follows
:
i) Fixed assets: - Fixed assets are stated at cost less accumulated
depreciation. Cost of plant and machinery includes interest on
borrowings till the date of commissioning of the assets. Depreciation
is provided on the "Straight line basis" at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956, except in the
case of lease hold land which is amortised over the period of the
lease.
ii) Inventories: - Inventories are valued at the lower of cost and net
realisable value except in the case of tools in stores and spares which
are valued at cost and tools in Tool Crib which are valued at book
value. The cost of purchased materials is determined on the basis of
first in first out method. The cost of work-in-process and manufactured
goods includes direct material cost, direct labour cost and appropriate
factory overheads computed on the basis of normal utilisation of the
production capacity. The cost of tools in Tool Crib is amortised over
useful life of the tools. Consumables are charged to the Profit and
Loss Account in the year of purchase.
iii) Current Investments are carried at fair value.
iv) Excise Duty paid/payable on production is charged to profit and
loss account in the year of manufacture and accordingly included while
valuing closing stock.
v) Specific debts and loans and advances, identified as irrecoverable
or doubtful are written off or provided for respectively. All the debts
and loans and advances though shown recoverable and considered good
have become time barred and no provision has been made in accounts for
their bad and doubtfulness.
vi) Conversion/translation of foreign currency transactions:- There has
not been any conversion / translation of foreign currency transaction.
Current assets and current liabilities outstanding on balance sheet
date are translated on the dated exchange rates and the resulting
gains/losses are recognised in the profit and loss account.
vii) Revenue Recognition : - There has not been any sale of goods and
services during the year.
viii) Research & Development Expenditure :- Expenditure of revenue
nature incurred on research and development of products which are
expected to be technically/commercially viable is written off over a
period of five years, starting with the year of commencement of
commercial production. Expenditure of a capital nature is added to
fixed assets.
ix) Deferred Revenue Expenditure :- Technical know-how fees/expenditure
on exhibition of proto- type of a product under development which is
expected to be technically/commercially viable will be written off over
a period of 5 years from the year of commencement of its commercial
production.
(x) Retirement benefits: - Retirement benefits to employees are
provided for by way of provident fund, gratuity and leave encashment.
The monthly contributions to provident fund are charged to revenue
account. Provision for gratuity is made on the basis of an actuarial
valuation for all employees done on the balance sheet date. Provision
for leave encashment is based on an actuarial valuation as on the
balance sheet date of the liability arising on cessation/termination of
services of the employees.