Mar 31, 2015
1.1. Basis Of Preparation Of Financial Statements:
The Financial statements have been prepared on accrual basis under the
historical cost convention and in accordance with generally accepted
accounting principles in India and materially comply with the Mandatory
Accounting Standards notified by the Central Government of India under
the Companies (Accounting Standards) Rules, 2006, as amended, and with
the relevant provisions of the Companies Act, 2013.
All the assets and liabilities have been classified as current and
non-current as per the Company's normal operating cycle and other
criteria as set out in Schedule III of the Companies Act, 2013. Based
on the nature of products and the time between the acquisition of
assets and processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle to be 12
months for the purpose of current - non-current classification of
assets and liabilities.
During the financial year 2014-15, the Company has recorded a Net loss
of Rs. 5.89 lakhs as against the net loss of Rs. 103.10 lakhs incurred
during the previous year. As mentioned in note no. 4 to the Notes to
Financial Statements, the additional depreciation cost incurred due to
estimation of depreciation as per Schedule II of the Companies Act,
2013 has resulted in the loss for the year and the accumulated losses
have eroded 78% of networth.
The Management is confident that the Company will be able to generate
profits in years to come and meet its financial obligation as they
arise. Based on the increase in the performances, the increse in
productivity and the marketing capability, working capital support from
the banker and the promoters during the year 2014-15 and the
anticipated big orders during the year 2015-16, the accompanying
Financial Statements have been prepared on a going concern basis.
1.2. Use of Estimates:
The preparation of financial statements in conformity with Indian
Generally Accepted Account! ng Policies (GAAP) requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure relating to contingent
liabilities as at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates. Any revision to accounting
estimates is recognized prospectively in the current and future
periods.
1.3. Fixed Assets:
Fixed assets are carried at cost of acquisition, net of accumulated
depreciation and impairment losses. The cost of fixed assets includes
freight, duties, taxes and other incidental expenses relating to
acquisition. Where fixed assets have been acquired from a country
outside India, the cost of these fixed assets also includes exchange
differences (favorable and unfavorable) arising in respect of foreign
currency loans on other liabilities incurred specifically for the
purpose of their acquisition. Borrowing costs related to the
acquisition or construction of the qualifying fixed assets for the
period up to the completion of their acquisition or constructions are
capitalized. Losses arising from the retirement and the gains or losses
arising from disposal of fixed assets which are carried at cost are
recognized in the Statement of Profit & Loss.
1.4. Depreciation:
Till the year ended March 31, 2014, Schedule XIV to the Companies Act,
1956, prescribed requirements concerning depreciation of fixed assets.
From the current year, Schedule XIV has been replaced by Schedule II of
the Companies Act, 2013.
As prescribed under part C of schedule II of Companies Act, 2013,
Depreciation is systematically allocated over the useful life of an
asset. The depreciation is provided on the Straight Line Method from
the beginning of the month in which the asset is ready for use.
Depreciation on additions to assets or on sale / disposal of assets, is
calculated on pro rata basis from the month of such addition or upto
the month of such sale / disposal as the case may be.
1.5. Revenue Recognition:
Revenue from sale of manufactured goods, including scrap, is recognized
on transfer of all significant risks and rewards of ownership to the
buyer. The amount recognized as sale is inclusive of excise duty, sales
tax, and net of trade and quantity discounts on accrual basis. Interest
on deployment of surplus funds is recognized using the time
proportionate method based on underlying interest rates.
1.6. inventories:
Inventories are carried at the lower of cost and net realizable value.
The comparison of cost and net realizable value is made on an item by
item basis.
Cost comprises of purchase price and all incidental expenses incurred
in bringing the inventory to its present location and condition. The
method of determination of cost is as follows:
a. Raw materials, valued at cost net of cenvat;
b. Finished goods at lower of cost or net realizable value and
inclusive of excise duty;
c. Goods in Transit valued at cost excluding excise duty and taxes;
d. Stock of scrap at estimated realizable value;
e. Stores and spares - landed cost on a first in first out method.
The provision for inventory obsolescence is assessed annually and is
provided as and when considered necessary.
1.7. Foreign Exchange Transactions:
Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transaction. Exchange
differences arising on foreign exchange transactions settled during the
year are recognized in the Statement of profit and loss of the year,
except that exchange differences related to acquisition of fixed assets
from a country outside India are adjusted in the carrying amount of the
related fixed assets.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date; the resultant exchange differences are recognized in the
statement of profit and loss except those related to acquisition of
fixed assets from a country outside India which are adjusted in the
carrying amount of the related fixed assets.
1.8. Provisions and contingent liabilities:
The Company recognizes a provision when there is a present obligati on
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognized
when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.
1.9. Tax on income:
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the year) provided in
the books of accounts.
1.10. Excise Duty/Custom Duty:
Excise Duty in respect of goods manufactured by the company is being
accounted for at the time of removal of goods from the factory for
sale. Custom duty is accounted in the books as and when paid/incurred.
1.11. Earnings Per Share:
The basic and diluted earnings per share are computed by dividing the
net profit attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The company did not have any potentially dilutive equity shares
outstanding during the year.
1.12. Retirement benefits to employees:
I. Short Term employee benefits:
Short term employee benefits falling due within are recognized as an
expense as per the Company's Scheme based on expected obligati ons. The
benefits like salaries, wages etc and the expected cost of bonus,
ex-gratia are recognized in the period in which the employees renders
the related service.
II. Retirement benefits:
Retirement benefits comprise of provident fund, superannuation and
gratuity which are recognized as follows:
a. Provident fund:
This is a defined contribution plan. Contributions in respect of staff
and workers are remitted to provident fund authorities in accordance
with the relevant statute and are charged to statement of profit and
loss as and when due. The Company has no further obligations for future
provident fund benefits in respect of these employees other than its
annual contributions.
b. Superannuation:
This is a defined contribution plan. The Company makes contribution as
per the scheme to superannuation Fund administered by Life Insurance
Corporation of India. The Company has no further obligation of future
superannuation benefits other than its annual contributions and
recognizes such contributions ons as expense as and when due.
c. Gratuity:
This is a defined benefit plan. Provision for gratuity is made based on
actuarial valuation using projected unit credit method. Actuarial gains
and losses, comprising of experience adjustments and the effects of
changes in actuarial assumptions, are recognized immediately in the
statement of profit and loss as income or expense.
1.13. Research & Development:
Research & Development expenditure of revenue nature is charged to
Statement of Profit & Loss, while Capital Expenditure is added to the
cost of fixed assets in the year in which they are incurred.
1.14. INTANGIBLE ASSETS:
Impairment of Assets:
The company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at the recoverable amount.
Mar 31, 2014
1.1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared on accrual basis under the
historical cost convention and in accordance with generally accepted
accounting principles in India and materially comply with the Mandatory
Accounting Standards notified by the Central Government of India under
the Companies (Accounting standards) Rules, 2006 and with the relevant
provisions of the Companies Act, 1956.
The Company has recorded a net loss of Rs.103.10 lakhs for the year and
the accumulated losses have eroded 71% of its entire net worth and the
current Ratio is also not healthy. The Management is confident that the
Company will be able to generate profits in future years and meet its
financial obligation as they arise. The accompanying Financial
Statements have been prepared on a going concern basis based on
cumulative impact of following mitigating factors:
* The Company is working on supply side price control to match with
sale side price realization so that there is no loss of margin on
account of price fluctuations.
* Company is taking all the necessary efforts for sale of land that
belongs to the Company at Nellore which will bring long term liquidity
and subsequently reduce the interest burden. Due to bifurcation of the
state of Andhra Pradesh and restructuring of Government, industrial
growth is expected in the area resulting in a good sale opportunity.
* The Company concentrated on identifying the customers / orders which
gave prompt realizations and resultant profits and had a detailed study
on categorization of the customers, based on the orders and
realizations which will help the Company to move forward in a right
path.
* The Continued support by the Promoters by bringing in fund will also
help the Company at large.
1.2. USE OF ESTIMATES
The preparation of financial statements in conformity with Indian
Generally Accepted Accounting Policies (GAAP) requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure relating to contingent
liabilities as at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates. Any revision to accounting
estimates is recognized prospectively in current and future periods.
1.3. FIXED ASSETS AND DEPRECIATION
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes freight, duties, taxes
and other incidental expenses relating to acquisition. Where fixed
assets have been acquired from a country outside India, the cost of
these fixed assets also includes exchange differences (favorable and
unfavorable) arising in respect of foreign currency loans on other
liabilities incurred specifically for the purpose of their acquisition.
Borrowing costs related to the acquisition or construction of the
qualifying fixed assets for the period up to the completion of their
acquisition or constructions are capitalized.
Depreciation is provided on the Straight Line Method from the beginning
of the month in which the asset is ready for use. The rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 are
considered as the minimum rates. If the management''s estimate of the
useful life of a fixed asset at the time of acquisition of the asset or
of the remaining useful life on a subsequent review is shorter than
that envisaged in the aforesaid schedule, depreciation is provided at a
higher rate based on the management''s estimate of the useful life or
remaining useful life. Pursuant to this policy, depreciation on assets
has been provided at the rates based on the estimated useful lives of
fixed assets.
Assets individually costing Rs 5,000 or less are depreciated at the
rate of 100%. Depreciation is charged on a proportionate basis for all
assets purchased and sold during the year.
1.4. REVENUE RECOGNITION
Revenue from sale of manufactured goods, including scrap, is recognized
on transfer of all significant risks and rewards of ownership to the
buyer. The amount recognized as sale is inclusive of excise duty, sales
tax, and net of, trade and quantity discounts on accrual basis.
Interest on deployment of surplus funds is recognized using the time
proportionate method based on underlying interest rates.
1.5. INVENTORIES
Inventories are carried at the lower of cost and net realizable value.
The comparison of cost and net realizable value is made on an item by
item basis.
Cost comprises of purchase price and all incidental expenses incurred
in bringing the inventory to its present location and condition. The
method of determination of cost is as follows:
a. Raw materials, valued at cost net of cenvat
b. Finished goods at lower of cost or net realizable value and
inclusive of excise duty.
c. Goods in Transit valued at cost excluding excise duty and taxes.
d. Stock of scrap at estimated realizable value.
e. Stores and spares - landed cost on a first in first out method
f. The provision for inventory obsolescence is assessed annually and
is provided as and when considered necessary.
1.6. FOREIGN EXCHANGE TRANSACTIONS
Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transaction. Exchange
differences arising on foreign exchange transactions settled during the
year are recognized in the Statement of profit and loss of the year,
except that exchange differences related to acquisition of fixed assets
from a country outside India are adjusted in the carrying amount of the
related fixed assets.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date; the resultant exchange differences are recognized in the
profit and loss account except those related to acquisition of fixed
assets from a country outside India which are adjusted in the carrying
amount of the related fixed assets.
1.7. PROVISIONS AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognized
when it
is probable that an outflow of resources embodying economic benefits
will be required to settle a present obligation as a result of an
obligating event, based on a reliable estimate of such obligation.
1.8. TAX ON INCOME
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the year) provided in
the books of accounts.
1.9. EXCISE DUTY/CUSTOM DUTY
Excise Duty in respect of goods manufactured by the company is being
accounted for at the time of removal of goods from the factory for
sale. Custom duty is accounted in the books as and when paid/incurred.
1.10. EARNING PER SHARE
The basic and diluted earnings per share are computed by dividing the
net profit attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The company did not have any potentially dilutive equity shares
outstanding during the year.
1.11. RETIREMENT BENEFITS TO EMPLOYEES
I. Short Term employee benefits:
Short term employee benefits falling due within are recognized as an
expense as per the Company''s Scheme based on expected obligations. The
benefits like salaries, wages etc and the expected cost of bonus,
ex-gratia are recognized in the period in which the employees renders
the related service.
II. Retirement benefits:
Retirement benefits comprise of provident fund, superannuation and
gratuity which are recognized as follows:
a. Provident fund:
This is a defined contribution plan. Contributions in respect of staff
and workers are remitted to provident fund authorities in accordance
with the relevant statute and are charged to statement of profit and
loss as and when due. The Company has no further obligations for future
provident fund benefits in respect of these employees other than its
annual contributions.
b. Superannuation:
This is a defined contribution plan. The Company makes contribution as
per the scheme to superannuation Fund administered by Life Insurance
Corporation of India. The Company has no further obligation of future
superannuation benefits other than its annual contributions and
recognizes such contributions as expense as and when due.
c. Gratuity:
This is a defined benefit plan. Provision for gratuity is made based on
actuarial valuation using projected unit credit method. Actuarial gains
and losses, comprising of experience adjustments and the effects of
changes in actuarial assumptions, are recognized immediately in the
statement of profit and loss as income or expense.
1.12. INTANGIBLE ASSETS
Impairment of Assets:
The company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at the recoverable amount.
1.13. RESEARCH & DEVELOPMENT
Research & Development expenditure of revenue nature is charged to
Profit & Loss A/c, while Capital Expenditure is added to the cost of
fixed assets in the year in which they are incurred.
Mar 31, 2012
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared on accrual basis under the
historcal cost convention and in accordance with generally accepted
accounting principles in India and materially comply with the Mandatory
Accounting Standards notified by the Central Government of India under
the Companies (Accounting standards) Rules'2006 and with the relevant
provisions of the Companies Act'1956,
1.2. USE OF ESTIMATES
The preparation of financial statements in conformity with Indian
Generally Accepted Accounting Principles (GAAP) requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure relating to contingent
liabilities as at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
1.3. FIXED ASSETS AND DEPRECIATION
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes freight'duties'taxes
and other incidental expenses relating to acquisition. Where fixed
assets have been acquired from a country outside India'the cost of
these fixed assets also includes exchange differences (favorable and
unfavorable) arising in respect of foreign currency loans on other
liabilities incurred specifically for the purpose of their
acquisition. Borrowing costs related to the acquisition or construction
of the qualifying fixed assets for the period up to the completion of
their acquisition or constructions are capitalized.
Depreciation is provided on the Straight Line Method from the beginning
of the month in which the asset is ready for use. The rates of
depreciation prescribed in Schedule XIV to the Companies Act'1956 are
considered as the minimum rates. If the managementÃs estimate of the
useful life of a fixed asset at the time of acquisition of the asset
or of the remaining useful life on a subsequent review is shorter than
that envisaged in the aforesaid schedule'depreciation is provided at a
higher rate based on the managementÃs estimate of the useful life or
remaining useful life. Pursuant to this policy'depreciation on assets
has been provided at the rates based on the estimated useful lives of
fixed assets
Assets individually costing Rs 5,000 or less are depreciated at the
rate of 100%. Depreciation is charged on a proportionate basis for all
assets purchased and sold during the year.
1.4. REVENUE RECOGNITION
Revenue from sale of Manufactured goods 'including scrap'is
recognized on transfer of all significant risks and rewards of
ownership to the buyer. The amount recognized as sale is inclusive of
excise duty sales tax'and net of'trade and quantity discounts on
accrual basis. Interest on deployment of surplus funds is recognized
using the time proportionate method based on underlying interest rates.
1.5. INVENTORIES
Inventories are carried at the lower of cost and net realizable value.
The comparison of cost and net realizable value is made on an item by
item basis.
Cost comprises of purchase price and all incidental expenses incurred
in bringing the inventory to its present location and condition. The
method of determination of cost is as follows:
(a) Raw materials'valued at cost net of CENVAT
(b) Finished goods at lower of cost or net realizable value and
inclusive of excise duty.
(c) Goods in Transit valued at cost excluding excise duty and taxes.
(d) Stock of scrap at estimated realizable value.
(e) Stores and spares à landed cost on a in first out method
(f) The provision for inventory obsolescence is assessed annually and
is provided as and when considered necessary.
1.6. FOREIGN EXCHANGE TRANSACTIONS
Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transaction. Exchange
differences arising on foreign exchange transactions settled during the
year are recognized in the statement of profit and loss of the year,
except that exchange differences related to acquisition of fixed
assets from a country outside India are adjusted in the carrying amount
of the related fixed assets.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date; the resultant exchange differences are recognized in the
statement of profit and loss except those related to acquisition of
fixed assets from a country outside India which are adjusted in the
carrying amount of the related fixed assets.
1.7. PROVISIONS AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may'but probably
will not'require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote'no provision or disclosure is made.
Provisions for onerous contracts'i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it'are recognized
when it is probable that an outflow of resources embodying economic
will be required to settle a present obligation as a result
of an obligating event'based on a reliable estimate of such
obligation.
1.8. TAX ON INCOME
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the year) provided in
the books of accounts.
1.9. EXCISE DUTY/CUSTOM DUTY
Excise Duty in respect of goods manufactured by the Company is being
accounted for at the time of removal of goods from the factory for
sale. Custom duty is accounted in the books as and when paid/ incurred.
1.10. EARNING PER SHARE
The basic and diluted earnings per share are computed by dividing the
net profit attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The Company did not have any potentially dilutive equity shares
outstanding during the year.
1.11. RETIREMENT BENEFITS TO EMPLOYEES
i Short Term employee benefits:
Short term employee benefits falling due within are recognized as an
expense as per the CompanyÃs Scheme based on expected obligations. The
benefits like salaries'wages etc and the expected cost of bonus,
ex-gratia are recognized in the period in which the employees renders
the related service.
ii. Retirement benefits:
Retirement benefits comprise of provident fund'superannuation and
gratuity which are recognized as follows::
a) Provident fund
This is a defined contribution plan. Contributions in respect of staff
and workers are remitted to provident fund authorities in accordance
with the relevant statute and are charged to statement of profi t and
loss as and when due. The Company has no further obligations for future
provident fund benefits in respect of these employees other than its
annual contributions.
b) Superannuation
This is a defined contribution plan. The Company makes contribution as
per the scheme to superannuation fund administered by Life Insurance
Corporation of India. The Company has no further obligation of future
superannuation benefits other than its annual contributions and
recognizes such contributions as expense as and when due.
c) Gratuity
This is a defined benefit plan. Provision for gratuity is made based
on actuarial valuation using projected unit credit method. Actuarial
gains and losses'comprising of experience adjustments and the effects
of changes in actuarial assumptions'are recognized immediately in the
statement of profit and loss as income or expense
1.12. RESEARCH & DEVELOPMENT
Research & Development expenditure of revenue nature is charged to
statement of profit & loss'while Capital Expenditure is added to the
cost of fixed assets in the year in which they are incurred.
1.13. INTANGIBLE ASSETS
Impairment of Assets:
The Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists'the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount'the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss. If at the balance
sheet date there is an indication that if a previously assessed
impairment loss no longer exists'the recoverable amount is reassessed
and the asset is reflected at the recoverable amount.
Mar 31, 2011
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(a) The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards issued by the Institute of
Chartered Accountants of India and the relevant provisions of the
Companies Act, 1956, to the extent applicable. The financial statements
are presented in Indian rupees.
(b) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
3. FIXED ASSETS AND DEPRECIATION
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes freight, duties, taxes
and other incidental expenses relating to acquisition. Where fixed
assets have been acquired from a country outside India, the cost of
these fixed assets also includes exchange differences (favorable and
unfavorable) arising in respect of foreign currency loans on other
liabilities incurred specifically for the purpose of their acquisition.
Borrowing costs related to the acquisition or construction of the
qualifying fixed assets for the period up to the completion of their
acquisition or constructions are capitalized.
Depreciation is provided on the Straight Line Method from the beginning
of the month in which the asset is ready for use. The rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 are
considered as the minimum rates. If the management's estimate of the
useful life of a fixed asset at the time of acquisition of the asset or
of the remaining useful life on a subsequent review is shorter than
that envisaged in the aforesaid schedule, depreciation is provided at a
higher rate based on the management's estimate of the useful life or
remaining useful life. Pursuant to this policy, depreciation on assets
has been provided at the rates based on the estimated useful lives of
fixed assets
Assets individually costing Rs 5,000 or less are depreciated at the
rate of 100%.
Depreciation is charged on a proportionate basis for all assets
purchased and sold during the year.
4. REVENUE RECOGNITION
Revenue from sale of manufactured goods including scrap is recognized
on transfer of all significant risks and rewards of ownership to the
buyer. The amount recognized as sale is inclusive of excise duty sales
tax, and net of, trade and quantity discounts on accrual basis.
Interest on deployment of surplus funds is recognized using the time
proportionate method based on underlying interest rates.
5. INVENTORIES
Inventories are carried at the lower of cost and net realized value.
The comparison of cost and net realizable value is made on an item by
item basis.
Cost comprises of purchase price and all incidental expenses incurred
in bringing the inventory to its present location and condition. The
method of determination of cost is as follows:
(a) Raw materials, valued at cost net of cenvat.
(b) Finished goods at lower of cost or net realizable value and
inclusive of excise duty.
(c) Goods in Transit valued at cost excluding excise duty and taxes.
(d) Stock of scrap at estimated realizable value.
(e) Stores and spares à landed cost on a first in first out method.
(f) The provision for inventory obsolescence is assessed annually and
is provided as and when considered necessary.
6. FOREIGN EXCHANGE TRANSACTIONS
Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transaction. Exchange
differences arising on foreign exchange transactions settled during the
year are recognized in the profit and loss account of the year, except
that exchange differences related to acquisition of fixed assets from a
country outside India are adjusted in the carrying amount of the
related fixed assets.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date; the resultant exchange differences are recognized in the
profit and loss account except those related to acquisition of fixed
assets from a country outside India which are adjusted in the carrying
amount of the related fixed assets.
7. PROVISIONS AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognized
when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.
8. TAX ON INCOME
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the year) provided in
the books of accounts.
9. EXCISE DUTY/CUSTOM DUTY
Excise Duty in respect of goods manufactured by the company is being
accounted for at the time of removal of goods from the factory for
sale.
Custom duty is accounted in the books as and when paid/incurred.
10. EARNING PER SHARE
The basic and diluted earnings per share are computed by dividing the
net profit attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The company did not have any potentially dilutive equity shares
outstanding during the year.
11. RETIREMENT BENEFITS TO EMPLOYEES
i. Short Term employee benefits:
Short term employee benefits falling due within are recognized as an
expense as per the Company's Scheme based on expected obligations. The
benefits like salaries, wages etc and the expected cost of bonus,
ex-gratia are recognized in the period in which the employees renders
the related service.
ii. Retirement benefits:
Retirement benefits comprise of provident fund, superannuation and
gratuity which are recognized as follows:
a) Provident fund
This is a defined contribution plan. Contributions in respect of staff
and workers are remitted to provident fund authorities in accordance
with the relevant statute and are charged to profit and loss account as
and when due. The Company has no further obligations for future
provident fund benefits in respect of these employees other than its
annual contributions.
b) Superannuation
This is a defined contribution plan. The Company makes contribution as
per the scheme to superannuation fund administered by Life Insurance
Corporation of India. The Company has no further obligation of future
superannuation benefits other than its annual contributions and
recognizes such contributions as expense as and when due.
c) Gratuity
This is a defined benefit plan. Provision for gratuity is made based on
actuarial valuation using projected unit credit method. Actuarial gains
and losses, comprising of experience adjustments and the effects of
changes in actuarial assumptions, are recognized immediately in the
profit and loss account as income or expense.
12. RESEARCH & DEVELOPMENT
Research & Development expenditure of revenue nature is charged to
Profit & Loss A/c, while Capital Expenditure is added to the cost of
fixed assets in the year in which they are incurred.
13. INTANGIBLE ASSETS
Impairment of Assets:
The company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the profit and loss account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
14. With respect to the balances of Debtors & Creditors and
advances/deposits received from the customers as per books of account.
Confirmation of balances are awaited and adjustments if any will be
made in the books on receipt of confirmations.
15. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES
The management is currently in the process of identifying enterprises
which have provided goods and services to the company which qualify
under the definition of micro, small and medium enterprises, as defined
in Micro, Small and Medium Enterprises Act 2001. Accordingly, based on
information available, the amount payable to such enterprises as on
31st March 2011 is Nil.
16. The computation of profit under section 349 of the Companies Act,
1956 is not considered necessary as the managerial remuneration that is
paid is minimum remuneration based on the effective capital of the
Company as prescribed under Schedule XIII of the said Act.
19. LEASES
Operating leases
The company is obligated under cancelable operating lease for Kavarapet
factory which is renewable at the options of the lessor and the lessee.
The expense under the contracted lease amounts to Rs. 21.83 lakhs (
previous year Rs. 30.80 lakhs)
21. As at 31st March, 2011, the company had Rs.467.30 lakhs unabsorbed
depreciation and carried forward losses under tax laws.
22. SEGMENTAL REPORTING
The company currently operates in one business segment in manufacturing
of PP bags and one geographical segment in India. In line with
Accounting Standard 17, as the relevant information is available from
the balance sheet and the profit and loss account itself, and therefore
keeping in view of the objective of segment reporting, the company has
not disclosed segment information.
Mar 31, 2010
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(a) The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards issued by the Institute of
Chartered Accountants of India and the relevant provisions of the
Companies Act, 1956, to the extent applicable. The financial statements
are presented in Indian rupees.
(b) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
2 USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
3. FIXED ASSETS AND DEPRECIATION
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes freight, duties, taxes
and other incidental expenses relating to acquisition. Where fixed
assets have been acquired from a country outside India, the cost of
these fixed assets also includes exchange differences (favourable and
unfavourable) arising in respect of foreign currency loans on other
liabilities incurred specifically for the purpose of their acquisition.
Borrowing costs related to the acquisition or construction of the
qualifying fixed assets for the period up to the completion of their
acquisition or construction are capitalized.
Depreciation is provided on the Straight Line Method from the beginning
of the month in which the asset is ready for use. The rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 are
considered as the minimum rates. If the managements estimate of the
useful life of a fixed asset at the time of acquisition of the asset or
of the remaining useful life on a subsequent review is shorter than
that envisaged in the aforesaid schedule, depreciation is provided at a
higher rate based on the managements estimate of the useful life or
remaining useful life. Pursuant to this policy, depreciation on assets
has been provided at the rates based on the estimated useful lives of
fixed assets
Assets individually costing Rs 5,000 or less are depreciated at the
rate of 100%.
Depreciation is charged on a proportionate basis for all assets
purchased and sold during the year.
4. REVENUE RECOGNITION
Revenue from sale of Manufactured goods , including scrap, is
recognised on transfer of all significant risks and rewards of
ownership to the buyer. The amount recognised as sale is inclusive of
sales tax, custom duty, trade and quantity discounts on accrual basis.
Interest on deployment of surplus funds is recognised using the time
proportionate method based on underlying interest rates.
5. INVENTORIES
Inventories are carried at the lower of cost and net realizable value.
The comparison of cost and net realizable value is made on an
item-by-item basis.
Cost comprises of purchase price and all incidental expenses incurred
in bringing the inventory to its present location and condition. The
method of determination of cost is as follows:
- Raw materials - valued at cost.
- Finished goods - at landed cost on a first in first out method
- Stores and spares - at landed cost on a first in first out method
The provision for inventory obsolescence is assessed annually and is
provided as and when considered necessary.
6. FOREIGN EXCHANGE TRANSACTIONS
Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognized in the profit and loss account of the year, except
that exchange differences related to acquisition of fixed assets from a
country outside India are adjusted in the carrying amount of the
related fixed assets.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date; the resultant exchange differences are recognized in the
profit and loss account except those related to acquisition of fixed
assets from a country outside India which are adjusted in the carrying
amount of the related fixed assets.
7. PROVISIONS AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognized
when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.
8. INCOME TAX
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and no
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the year)
provided in the books of accounts.
9. SALES
Sales are inclusive of Excise Duty and Sales Tax.
10. EXCISE DUTY
Excise Duty in respect of goods manufactured by the company is being
accounted for, at the time of removal of goods from the factory for
sale.
11. RETIREMENT BENEFITS TO EMPLOYEES.
i Short Term
Short term employee benefits are recognised as an expense as per the
Companys scheme based on expected obligations.
ii. Post Retirement
Post retirement benefits comprise of provident fund, superannuation and
gratuity which are accounted for as follows:
a) Provident fund
This is a defined contribution plan. Contributions in respect of staff
and workers are remitted to provident fund authorities in accordance
with the relevant statute and are charged to profit and loss account as
and when due. The Company has no further obligations for future
provident fund benefits in respect of these employees other than its
annual contributions.
b) Superannuation
This is a defined contribution plan. The Company makes contribution as
per the scheme to Superannuation Fund administered by Life Insurance
Corporation of India. The Company has no further obligation for future
superannuation benefits other than its annual contributions and
recognises such contributions as expense as and when due.
c) Gratuity
This is a defined benefit plan. Provision for gratuity is made based on
actuarial valuation using projected unit credit method. Actuarial gains
and losses, comprising of experience adjustments and the effects of
changes in actuarial assumptions, are recognised immediately in the
profit and loss account as income or expense.
12 . RESEARCH & DEVELOPMENT
Research & Development expenditure of revenue nature is charged to
Profit & Loss A/c, while Capital Expenditure is added to the cost of
fixed assets in the year in which they are incurred.
13. DEFERRED TAX LIABILITY
Deferred Tax resulting from timing difference between book and Tax
profit is accounted for under liability method, at the current rate of
tax, to the extent, the timing differences are expected to crystallize.
14. INTANGIBLE ASSETS
Impairment of Assets:
The company assesses at each balance sheet date whether there is any
indication that an asset including goodwill may be impaired. If any
such indication exists, the Company estimates the recoverable amount of
the asset. If such recoverable amount of the asset or the recoverable
amount of the cash-generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an impairment loss and
is recognized in the profit and loss account. If at the balance sheet
date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at the recoverable amount.
15. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES:
The management is currently in the process of identifying enterprises
which have provided goods and services to the company which qualify
under the definition of micro, small and medium enterprises, as defined
in Micro, Small and Medium Enterprises Act 2001. Accordingly, based on
information available, the amount payable to such enterprises as on
31st March 2010 is NIL