Mar 31, 2015
I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements are prepared in accordance with the generally
accepted accounting principles in India (Indian GAAP) under the
historical cost convention on an accrual basis and are in compliance
with pursuant to section 133 of the Companies Act,2013 read with Rule 7
of the Companies (Account) Rules,2014, till the standards of accounting
or any addendum thereto are prescribed by Central Government in
consultation and recommendation of the National Financial Reporting
Authority, the existing Accounting Standards notified under Companies
Act, 1956 shall continue to apply . Consequently, these financial
statements have been prepared to comply in all material aspects with
the accounting standards notified under Section 211(3C) of Companies
Act, 1956( Companies (Accounting Standards) Rules, 2006, as amended)
and other relevant provisions of the Companies Act, 2013.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Revised Schedule III to the Companies Act,
2013. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and
cash equivalents, the Company has ascertained its operating cycle as up
to twelve months for the purpose of current and non-current
classification of assets and liabilities.
ii) USE OF ESTIMATES:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements,estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
iii) TANGIBLE FIXED ASSETS AND DEPRECIATION:
TANGIBLE FIXED ASSETS:
Tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
CAPITAL WORK IN PROGRESS:
Expenses incurred towards acquisition of fixed assets which have not
been installed or not put to use before the year end are disclosed
under capital work in progress and no depreciation has been provided on
that.However there is no Capital Work in Progress during the year under
consideration.
DEPRECIATION:
Depreciation isprovided on pro rata basis on the straight line method
over the remaining useful lives of the asstes in the manner prescribed
by Schedule II of the Companies Act, 2013, as against the past practice
of computing the depreciation at rates with refrence to the life of
assets subject to the minimum rates provided by Schedule XIV of the
Companies Act, 2013.
a. Useful lives of assets are determined by the management by the
internal technical assessemnts except in case where such assessment
suggest a life significantly different from those prescribed by
Schedule II - Part 'C', where the useful life is as assessed and
certified by a technical expert.
b. Assets which are depreciated over useful life different than those
indicated by Schedule II are as under :
Asset Class Estimated Useful Life Useful Life indicate by
Schedule II
Plant & Machinery 2 Years 8 Years
Fixed Assets, individually costing less than five thousands, are fully
depreciated in the year of purchase.
Depreciation on Assets added / disposed off during the year have been
provided on pro-rata basis with reference to the day of additions /
deletions from the respective day of purchase/sale.
Continuous process plants are classified based on technical assessment
and depreciation is provided accordingly.
iv) INTANGIBLE FIXED ASSETS AND AMORTISATION:
Intangible assets are recognized when it is probable that the future
economic benefit attributable to the assets will flow to the Company
and its cost can be reliably measured.Intangible Assets are stated at
acquisition cost, net of accumulated amortization and accumulated
impairment losses, if any. Intangible assets are amortized on a
straight line basis over their estimated useful lives.
Expenditure incurred on acquisition/development of intangible assets
which are not put/ready to use at the reporting date is disclosed under
intangible assets under development.
v) IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss if any is
charged to Statement of Profit and Loss Account in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognized in prior years is recorded when there is an indication that
the impairment losses recognized for the assets no longer exist or have
decreased.
However there is no such impairment in the year under consideration.
vi) INVENTORY:
Raw Materials are valued at lower of cost or net realizable value.
However, these items are considered to be realizable at cost if the
finished products in which they will be used, are expected to be sold
at or above cost.However there is no stock raw materials for the year
under consideration.
Finished Goods and Work in Progress are valued at lower of cost or net
realizable value. Cost of Finished Goods and Work in Progress includes
the cost of conversion and other costs incurred to bring the
inventories to their present location and condition.However there is no
stock of Finished Goods for the year under consideration.
Stock in trade is valued at lower of cort or net realisable value.
Cost of inventories is computed on FIFO Basis
Obsolete stock if any is valued at net realizable value.However there
is no stock for the year under consideration. vii INVESTMENTS:
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.
Investments are recorded at cost on the date of purchase, which
includes acquisition charges such as brokerage, stamp duty, taxes, etc.
Current Investments are stated at lower of cost and quoted/fair value.
Provision for diminution in the value of Long Term Investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
viii) GOVERNMENT GRANTS
Government Grants are recognized when there is reasonable assurance
that the same will be received and all attaching conditions will be
complied with. Revenue grants are recognized in the Statement of Profit
& Loss account. Capital grants relating to specific Tangible/Intangible
assets are reduced from the gross value of the respective Tangible/
Intangible assets. Other capital grants in nature of promoter's
contribution are credited to capital reserve.
However no government grants are received by the company in the year
under consideration.
ix) REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and can be reliably
measured.
SALE OF GOODS:
"Domestic Sale is recognized on dispatch to customers and is net of
returns. ""Sales"" includes basic sales value and excise, but excludes
other recoveries such as insurance, sales tax etc.
OTHER INCOME:
Interest is recognized on Time Proportion Basis with reference to
principal outstanding and rate of Interest applicable.
Dividend income is regonised when the shareholder's right to receive
payment has been established. Rent income is received on renting their
immovable properties and amenities on accrual basis.
x) EMPLOYEE BENEFITS:
Retirement benefits to employees comprise of provident fund
contributions, gratuity and leave encashment entitlements. Contribution
to Provident Fund is made in accordance with the statute and provided
on accrual basis. Gratuity are provided for, according to the rules of
these benefit schemes, on the basis of actuarial valuation done at the
year-end by independent actuaries using the Projected Unit Credit
Method. Actuarial losses/gains are recognized in the Statement of
Profit and Loss in the year in which they arise. Leave encashment are
paid in the year in which they accrue.
xi) FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are recorded at the rate of exchange
prevailing on the date of transaction. The exchange difference
resulting from settled transactions is recognized in the statement of
profit and loss if applicable.
Year end balances of monetary items are restated at the year end
exchange rates and the resultant net gain or loss is recognized in the
statement of profit and loss.
Premium or discounts on forward contracts where there are underlying
assets/liabilities are amortized over the life of the contract. Such
foreign exchange forward contracts are revalued at the Balance Sheet
date and the exchange difference between the spot rate at the date of
contract and spot rate on the Balance Sheet date is recognized as
gain/loss in the Statement of Profit and loss.
xii) BORROWING COST:
Borrowing Costs attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such assets are ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss Account
in the period in which they are incurred.
xiii) LEASES:
[a] As a Lessee:
Leases, where significant portion of risk and reward of ownership are
retained by the Lessor, are classified as Operating Leases and lease
rentals thereon are charged to the Statement of Profit and Loss on a
straight-line basis over the lease term.
[b] As a Lessor:
If the Company has leased certain tangible assets, and such leases,
where the Company has substantially retained all the risks and rewards
of ownership, are classified as operating leases.
Lease income is recognised in the Statement of Profit and Loss on a
straight-line basis over lease term.
The Company's significant leasing arrangements are in respect of
operating leases for administrative office.
xiv) TAXES ON INCOME:
Tax expense comprises of current and deferred tax.
Provision for current tax is made on the basis of estimated taxable
income for the relevant accounting year in accordance with the Income
Tax Act, 1961.
Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and the liability on a net basis.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognized to
the extent there is reasonable certainty that these would be realized
in future.
In case of unabsorbed losses and unabsorbed depreciation, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profit. At each Balance Sheet date the Company reassesses the
unrecognized deferred tax assets.
Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in Guidance Note issued
by the ICAI, the said asset is created by way of a credit to the
Statement of Profit and Loss and shown as MAT Credit Entitlement.
The Company reviews the same at each Balance Sheet date and writes down
the carrying amount of MAT Credit Entitlement to the extent there is no
longer convincing evidence to the effect that the Company will pay
normal Income Tax during the specified period.
The Company has the policy of reviewing and passing proper adjustment
entries for Income Tax paid, Provision for Income Tax made and
excess/short tax provision for the year after filing Income Tax
returns. The Company also makes a fair estimate of the Income Tax
liability for the said year and gives effects to it in the Books of
Accounts.
xv) CASH AND CASH EQUIVALENT :
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash on hand and cash at bank including fixed deposit with
original maturity period of three months or less and short term highly
liquid investments with an original maturity of three months or less.
xvi) CASH FLOW STATEMENT:
Cash flows are reported using the Indirect Method, whereby profit
before tax is adjusted for the effects of transactions of non-cash
nature, any deferrals or accruals of past or future cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated based on the
available information.
xvii) RESEARCH & DEVELOPMENT:
Revenue expenditure on Research and Development is charged to the
Statement of Profit and Loss in the year in which it is incurred.
Capital Expenditure on Research and Development is shown as an addition
to Fixed Assets or Work-in-Progress, as the case may be. However there
are no such expenditure in the year under consideration.
xviii) EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company's earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the
conversion of potential equity shares that have changed the number of
equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
xix) PROVISION & CONTINGENCIES:
The company estimates the probability of any loss that might be
incurred on outcome of contingencies on the basis of information
available.
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions are determined based on
management's estimate required to settle the obligation at the balance
sheet date, supplemented by experience of similar transactions. These
are reviewed at each balance sheet date and adjusted to reflect the
management's current estimates.
In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be
reasonable estimated, a disclosure is made in the financial statements.
In case of remote possibility neither provision nor disclosure is made
in the financials.
A Contingent Asset is neither recognised nor disclosed in the Financial
Statements.
Mar 31, 2014
I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements are prepared in accordance with the generally
accepted accounting principles in India (Indian GAAP) under the
historical cost convention on an accrual basis and are in compliance
with all material aspect the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")
read with the General Circular No. 15/2013 dated 13th September 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. The accounting policies have been consistently
applied by the company and are consistent with those used in the
previous year All assets and liabilities have been classified as
current or non-current as per the Company''s normal operating cycle and
other criteria set out in the Revised Schedule VI to the Companies Act,
1956. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and
cash equivalents, the Company has ascertained its operating cycle as up
to twelve months for the purpose of current and non-current
classification of assets and liabilities.
ii) USE OF ESTIMATES:
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements,estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future peiods.
iii) TANGIBLE FIXED ASSETS AND DEPRECIATION:
TANGIBLE FIXED ASSETS:
Tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
CAPITAL WORK IN PROGRESS:
Expenses incurred towards acquisition of fixed assets which have not
been installed or not put to use before the year end are disclosed
under capital work in progress and no depreciation has been provided on
that.However there is no Capital Work in Progress during the year under
consideration.
DEPRECIATION:
Depreciation on fixed assets is charged on written down value basis in
the manner and as per the rates and method provided in schedule XIV of
the Companies Act, 1956. Fixed Assets, individually costing less than
five thousands, are fully depreciated in the year of
purchase.Depreciation on Assets added / disposed off during the year
have been provided on pro-rata basis with reference to the day of
additions / deletions from the respective day of purchase/sale.
iv) INTANGIBLE FIXED ASSETS AND AMORTISATION:
Intangible assets are recognized when it is probable that the future
economic benefit attributable to the assets will flow to the Company
and its cost can be reliably measured.Intangible Assets are stated at
acquisition cost, net of accumulated amortization and accumulated
impairment losses, if any. Intangible assets are amortized on a
straight line basis over their estimated useful lives.Expenditure
incurred on acquisition/development of intangible assets which are not
put/ready to use at the reporting date is disclosed under intangible
assets under development.
v) IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss if any is
charged to Statement of Profit and Loss Account in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognized in prior years is recorded when there is an indication that
the impairment losses recognized for the assets no longer exist or have
decreased.However there is no such impairment in the year under
consideration.
vi) INVENTORY:
Raw Materials are valued at lower of cost or net realizable value.
However, these items are considered to be realizable at cost if the
finished products in which they will be used, are expected to be sold
at or above cost.However there is no stock raw materials for the year
under consideration.Finished Goods and Work in Progress are valued at
lower of cost or net realizable value. Cost of Finished Goods and Work
in Progress includes the cost of conversion and other costs incurred to
bring the inventories to their present location and condition.However
there is no stock of Finished Goods for the year under
consideration.Stock in trade is valued at lower of cort or net
realisable value.Cost of inventories is computed on FIFO BasisObsolete
stock if any is valued at net realizable value.However there is no
stock for the year under consideration.
vii) INVESTMENTS:
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.Investments are recorded at cost on
the date of purchase, which includes acquisition charges such as
brokerage, stamp duty, taxes, etc. Current Investments are stated at
lower of cost and quoted/fair value. Provision for diminution in the
value of Long Term Investments is made, only if, in the opinion of the
management, such a decline is regarded as being other than temporary.
viii) GOVERNMENT GRANTS
Government Grants are recognized when there is reasonable assurance
that the same will be received and all attaching conditions will be
complied with. Revenue grants are recognized in the Statement of Profit
& Loss account. Capital grants relating to specific Tangible/Intangible
assets are reduced from the gross value of the respective
Tangible/Intangible assets. Other capital grants in nature of
promoter''s contribution are credited to capital reserve.However no
government grants are received by the company in the year under
consideration.
ix) REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and can be reliably
measured.
SALE OF GOODS:
Domestic Sale is recognized on dispatch to customers and is net of
returns. "Sales" includes basic sales value and excise, but excludes
other recoveries such as insurance, sales tax etc.
OTHER OPERATING REVENUE
Other operating revenue includes labour charges on accrual basis, and
scrap sales on actual sale.
OTHER INCOME:
Interest is recognized on Time Proportion Basis with reference to
principal outstanding and rate of Interest applicable. Dividend income
is regonised when the shareholder''s right to receive payment has been
established. Rent income is received on renting their immovable
properties and amenities on accrual basis.
x) EMPLOYEE BENEFITS:
Retirement benefits to employees comprise of provident fund
contributions, gratuity and leave encashment entitlements. Contribution
to Provident Fund is made in accordance with the statute and provided
on accrual basis. Gratuity are provided for, according to the rules of
these benefit schemes, on the basis of actuarial valuation done at the
year-end by independent actuaries using the Projected Unit Credit
Method. Actuarial losses/gains are recognized in the Statement of
Profit and Loss in the year in which they arise. Leave encashment are
paid in the year in which they accrue.
xi) FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are recorded at the rate of exchange
prevailing on the date of transaction. The exchange difference
resulting from settled transactions is recognized in the statement of
profit and loss if applicable.Year end balances of monetary items are
restated at the year end exchange rates and the resultant net gain or
loss is recognized in the statement of profit and loss.
Premium or discounts on forward contracts where there are underlying
assets/liabilities are amortized over the life of the contract. Such
foreign exchange forward contracts are revalued at the Balance Sheet
date and the exchange difference between the spot rate at the date of
contract and spot rate on the Balance Sheet date is recognized as
gain/loss in the Statement of Profit and loss.
xii) BORROWING COST:
Borrowing Costs attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such assets are ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss Account
in the period in which they are incurred.
xiii) LEASES:
[a] As a Lessee: Leases, where significant portion of risk and reward
of ownership are retained by the Lessor, are classified as Operating
Leases and lease rentals thereon are charged to the Statement of Profit
and Loss on a straight-line basis over the lease term.
[b] As a Lessor: If the Company has leased certain tangible assets, and
such leases, where the Company has substantially retained all the risks
and rewards of ownership, are classified as operating leases.Lease
income is recognised in the Statement of Profit and Loss on a
straight-line basis over lease term.The Company''s significant leasing
arrangements are in respect of operating leases for administrative
office.
xiv) TAXES ON INCOME:
Tax expense comprises of current and deferred tax.Provision for current
tax is made on the basis of estimated taxable income for the relevant
accounting year in accordance with the Income Tax Act, 1961. Current
tax assets and current tax liabilities are offset when there is a
legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and the liability on a net
basis.The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognized to
the extent there is reasonable certainty that these would be realized
in future.In case of unabsorbed losses and unabsorbed depreciation, all
deferred tax assets are recognized only if there is virtual certainty
supported by convincing evidence that they can be realized against
future taxable profit. At each Balance Sheet date the Company
reassesses the unrecognized deferred tax assets.
Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in Guidance Note issued
by the ICAI, the said asset is created by way of a credit to the
Statement of Profit and Loss and shown as MAT Credit Entitlement. The
Company reviews the same at each Balance Sheet date and writes down the
carrying amount of MAT Credit Entitlement to the extent there is no
longer convincing evidence to the effect that the Company will pay
normal Income Tax during the specified period.The Company has the
policy of reviewing and passing proper adjustment entries for Income
Tax paid, Provision for Income Tax made and excess/short tax provision
for the year after filing Income Tax returns. The Company also makes a
fair estimate of the Income Tax liability for the said year and gives
effects to it in the Books of Accounts.
xv) CASH AND CASH EQUIVALENTS :
Cash and Cash Equivalents for the purpose of cash flow statement
comprise cash on hand and cash at bank including fixed deposit with
original maturity period of three months or less and short term highly
liquid investments with an original maturity of three months or less.
xvi) CASH FLOW STATEMENT:
Cash flows are reported using the Indirect Method, whereby profit
before tax is adjusted for the effects of transactions of non-cash
nature, any deferrals or accruals of past or future cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated based on the
available information.
xvii) RESEARCH & DEVELOPMENT:
Revenue expenditure on Research and Development is charged to the
Statement of Profit and Loss in the year in which it is incurred.
Capital Expenditure on Research and Development is shown as an addition
to Fixed Assets or Work-in-Progress, as the case may be. However there
are no such expenditure in the year under consideration.
xviii) EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company''s earnings per share is the net
profit for the period after deducting preference dividends and any
attributable tax thereto for the period. The weighted average number of
equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the
conversion of potential equity shares that have changed the number of
equity shares outstanding, without a corresponding change in
resources.For the purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
xix) PROVISION & CONTINGENCIES:
The company estimates the probability of any loss that might be
incurred on outcome of contingencies on the basis of information
available.A provision is recognized when the company has a present
obligation as a result of past event and it is probable that an outflow
of resources will be required to settle the obligation in respect of
which a reliable estimate can be made. Provisions are determined based
on management''s estimate required to settle the obligation at the
balance sheet date, supplemented by experience of similar transactions.
These are reviewed at each balance sheet date and adjusted to reflect
the management''s current estimates. In cases where the available
information indicates that the loss on the contingency is reasonably
possible but the amount of loss cannot be reasonable estimated, a
disclosure is made in the financial statements. In case of remote
possibility neither provision nor disclosure is made in the
financials.A Contingent Asset is neither recognised nor disclosed in
the Financial Statements.
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