Mar 31, 2014
1 Basis of Accounting (AS 1)
i) The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate
ii) These accounts are prepared on the historical cost basis and the accounting principles of a going concern.
iii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.
2 Use of Estimates (AS 1)
The preparation of financial statement require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.
3 Inventories (AS 2)
Stock of Raw Material and WIP is valued at cost. Finished goods are valued at cost or market value whichever is less. Cost of Raw Material and Finished Goods includes the purchase cost (Net of any taxes on which credits are received or receivable) and other incidental cost, to bring such material to its present location and condition.
4 Cash Flows (AS 3)
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 operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.
5 Depreciation (AS 6)
Depreciation is provided on Written Down Value Method at the rates and in the manners prescribed in Schedules XIV to the Companies Act, 1956, on the basis of shifts / manners of utilization of the assets. Depreciation on additions/ disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.
6 Revenue Recognition (AS 9)
Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection. Revenue from sale of goods is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net off taxes and accounted on mercantile basis.
7 Fixed Assets (AS 10)
i) Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred. All pre-operative costs, including specific financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustment arising from foreign exchange rate variations attributable to the fixed assets are capitalised.
ii) Depreciation on fixed assets has been charged on written down value basis, pro-rata for the period of use, by adopting the revised rates of depreciation specified in Schedule XIV of the Companies Act, 1956.
8 Foreign Currency Transactions (AS 11)
i) The reporting currency of the company is Indian rupees.
ii) Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realize gain and losses on settlement of foreign currency transactions are recognized in the profit and loss account under the natural revenue heads of accounts. Exchange differences relating to fixed assets are capitalised to respective Fixed Asset.
iii) Foreign Currency assets and liabilities at the yearend are translated at the yearend exchange rates, and the resultant exchange difference is recognized in the profit and loss account.
iv) In case of forward contract, foreign currency derivatives or other financial instruments that are in substance forward exchange contracts, the premium or discount arising at the inception of the contract transactions are included in determining the net profit for the year.
9 Investments (AS 13)
Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.
10 Employee benefits (AS 15)
i) Provident fund and pension scheme are Defined Contribution Plans in the Company. The Company is a member of recognized Provident Fund scheme established under The Provident Fund & Miscellaneous Act, 1952 by the Government of India. The Company is contributing 12% of Salary & Wages of eligible employees under the scheme every month. The amount of contribution is being deposited each and every month. The contribution paid or payable under the scheme is recognized during the period under which the employee renders the related services.
ii) Employee Gratuity Fund Scheme is the Defined Benefit Plan. Provision for gratuity has been made in the accounts, in case of those employees who are eligible for the retirement benefits. Gratuity is paid at the time of retirement of employees. Provision for gratuity liability is provided based on Actuarial Valuation made.
11 Foreign exchange transactions
i) Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions are recognised in the profit and loss account. Exchange differences relating to fixed assets are adjusted in the cost of the asset.
ii) Amount payable and receivable in the foreign currency as at the yearend are translated at the yearend exchange rate. Gains and losses thereon are recognized in the profit and loss account.
12 Borrowing costs (AS 16)
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.
13 Earnings per share (AS 20)
Basic and Diluted earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period 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 number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors.
14 Taxes on income (AS 22)
Current tax - Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.
Deferred tax - Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.
15 Impairment of assets (AS 28)
An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
16 Provisions and contingent liabilities (AS 29)
A provision is recognised when the company has a present obligation as a result of past events 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 discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date.
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.
17 Preliminary Expenses (AS 26)
Preliminary Expenditure is written off fully during the year under its occurrence as per As 26.
During the year, company made a bonus allotment equivalent to Rs. 1,98,94,520 by capitalising the amount from securities premium account. Bonus issue was made to all the existing shareholder standing on the record date (i.e. 09- 10-2013), except those who waived their right to receive bonus shares, in the proportion of 2 new equity shares for every 1 existing fully paid equity shares.
During the year, company has issued 5,00,000 equity shares at Rs. 10 each with securities Premium Rs. 20 each on 29- 04-2013 and 15,00,000 equity shares at Rs. 10 each with securities Premium Rs. 20 each on 28-06-2013.
[A - Term loan from Bank of India is Secured by way of hypothication of :
a) All Plant & Machineries & other assets of the Company,
b) EQM of Land & Building situated at RO of the Company,
c) EQM of Land at Vesu standing in the name of Mr. Anandkumar Dalmia
d) All fund & non fund based joint and several guarantee by Directors, their selected relatives & sister concerns]
[B - The Company started availing Term Loan sanctioned by Bank of India, secured as above, w.e.f. 22.05.2013 towards additional Term Loan Sanctioned of Rs. 25 Cr for 1st Phase Expansion of the Company.]
1) The Company started commercial production of Phase II expansion w.e.f. 01.10.13, accordingly the date put to use is taken as 01.10.13.
2) Total Expenses during constrution period amounting to Rs. 2,95,34,950/- has been capitalised on 01.10.13, to the extent directly to the machinery which is attributable directly and remaining expenditure in proportion to the cost of Fixed Asset (except computer)
3) The Factory Land has been acquired on lease by the company for a term of 36 years for lease rent.
4) The Company has made applications for its claim for Terminal Excise Duty Refund (TED) towards machineries installed during Phase II. The effects will be made in the year of receipt of such refunds.
[Salary & Wages include Directors Remuneration to all the directors except independent Directors, amounting to Rs. 300 thousand each.(P.Y. Rs. 300 thousand each.]
[Directors sitting fees has been paid to the independent directors only of the Company @ Rs. 3,500/- per BOD meeting attended.
[Earned Leave encashed in full hence no liability towards unpaid Leave is provided]
[Staff Welfare Exps include food and medical exp of Rs. 629.90 thousand and Rs. 533.20 thousand (P.Y. Rs. 194.99 thousand and Rs. 166.66 thousand) resp. borne by the company for betterment of its employees.]
Note 1. The weighted average number of equity shares outstanding at the year ended on 31st march 2014, are also adjusted for the year end balance of share application money pending allotement, as considered potential equity shares, for calculation of Diluted Earning Per Share as per the AS 20.
4 There was no employee in receipt of remuneration aggregating to Rs. 60,00,000/- or more per year or Rs. 5,00,000/- or more per month for the part or whole of the year. Previous year also there was no such employee.
5 Balances of loans, advances, Cash & Bank and Creditors & Debtors are subject to confirmation and have been taken as appeared in the books of account of the company.
6 The quantity and value of closing stock is certified by the management as true and correct.
7 In the absence of information regarding outstanding dues of MICRO or Small Scale Industrial Enterprise(s) as per The Micro, Small & Medium Enterprise Development Act, the Company has not disclosed the same as required by Schedule VI to the Companies Act, 1956.
8 The Company has made registration under Service Tax Statute in current financial year i.e. F.Y. 2013-14. Hence the provision of Service Tax Expense has been made in current of Rs. 2,27,528 (including Rs. 92,780 for the F.Y. 2012-13, which is to be disallowed being Prior Period Item.)