Accounting Policies of Vadilal Enterprises Ltd. Company
Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES:-
a) Statement of compliance
The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013.
Upto the year ended March 31, 2017, the Company prepared its financial statements in accordance with generally accepted accounting principles in India, including accounting standards read with Section 133 of the Companies Act, 2013 notified under Companies (Accounting Standards) Rules, 2006 (âPrevious GAAPâ). These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016.
b) Basis of Preparation of Financial Statements
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristic into account when pricing the asset or liability at the measurement date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
1) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or Liabilities.
2) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
3) Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
c) Use of Estimates
The presentation of the financial statements are in conformity with the Ind AS which requires the management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
d) Inventories
Inventories are stated at lower of cost and net realizable value. Cost of inventories are determined on the basis of weighted average cost Method. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
e) Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
f) Revenue Recognition
Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, related discounts & incentives and volume rebates.
Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
g) Property, plant and equipment
Property, Plant & Equipments are stated at actual cost (including cost of acquisition and installation) less accumulated depreciation and net of impairment, if any.
All items of property, plant and equipment are derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Depreciation
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on Property, Plant and Equipment is charged based on straight line method on an estimated useful life as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II.
The estimated useful lives and residual values of the property, plant and equipment are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Depreciation on items of property, plant and equipment acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition / disposal.
Transition to Ind AS
For transition to Ind AS, the Company has elected to apply IndAS retrospectively to arrive at carrying value of all its property, plant and equipments.
h) Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognized on a straight-line basis over their estimated useful lives. The estimated useful life are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in the statement of profit and loss when the asset is derecognized.
Useful lives of intangible assets
Intangible assets are amortised over their estimated useful life on a straight line basis over a period of 5 years.
Transition to Ind AS
For transition to Ind AS, the Company has elected to apply IndAS retrospectively to arrive at carrying value of all its property, plant and equipments.
i) Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Company as a lessee
Rental expense from operating lease is generally recognized on a straight line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessors expected inflationary cost increase, such increases are recognized in the year in which such benefits accrue.
Company as a lessor
Rental income from operating leases is generally recognized on a straight line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Initial direct cost incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight line basis over the lease term.
j) Foreign Currencies
In preparing the financial statements of the Company, the transactions in currencies other than the entity''s functional currency (INR) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rate prevailing at that date and differences are recognised in statement of Profit and Loss account. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on monetary items are recognized in the statement of profit and loss in the period in which they arise.
k) Employee Benefits
Employee benefits include provident fund, employee state insurance scheme, gratuity fund and compensated absences.
Defined Contribution Plan:
The Company''s contribution to Provident Fund is considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to in the statement of profit and loss. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
1) Service costs comprising current service costs, gains and losses on curtailments and settlements; and
2) Net interest expense or income
The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
Short-term and Long term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related services rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange of the related service.
Liabilities recognised in respect of short-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the company in respect of services provided by employees up to the reporting date.
l) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily takes a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
m) Earnings per share
A basic earnings per share is computed by dividing the profit/(loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The company did not have any potential to dilutive securities in any period presented.
n) Taxation
Tax expense represents the sum of the current tax and deferred tax.
Current Tax
The tax currently payable is based on taxable profit for the year. Current tax is measured at the amount expected to be paid to the tax authorities, based on estimated tax liability computed after taking credit for allowances and exemption in accordance with the local tax laws. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets include Minimum Alternate Tax (MAT) credit paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT credit is recognized as deferred tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
Current and deferred tax for the year
Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.
o) Provisions, Contingent Liabilities and Contingent Assets and Commitments
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligations. When a provision is measured using the cash flow estimated to settle the present obligation, its carrying amount is the present obligations of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
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 in respect of which the likelihood of outflow of resources is remote, no disclosure is made.
p) Financial Instruments
Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the statement of profit and loss.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through profit and loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.
Financial liabilities
Financial liabilities are measured at amortised cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments recognised by the Company are measured at the proceeds received net off direct issue cost.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in financial statements if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
q) Impairment
Financial assets (other than at fair value)
The Company assesses at each Balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
Non-financial assets
Property, plant and Equipment and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash generating unit for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the statement of profit and loss.
r) Operating Cycle
The Company presents assets and liabilities in the balance sheet based on current / non-current classification based on operating cycle.
An asset is treated as current when it is:
1. Expected to be realized or intended to be sold or consumed in normal operating cycle;
2. Held primarily for the purpose of trading;
3. Expected to be realized within twelve months after the reporting period, or
4. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
1. It is expected to be settled in normal operating cycle;
2. It is held primarily for the purpose of trading;
3. It is due to be settled within twelve months after the reporting period, or
4. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The company has identified twelve months as its operating cycle.
s) Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements in conformity with the Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing as material adjustment to the carrying amounts of assets and liabilities within next financial year.
i. Income taxes
As described in Note 2(n), the Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.
ii. Discount rate used to determine the carrying amount of the Companyâs defined benefit obligation
As described in Note 40, in determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
iii. Useful lives of property, plant and equipment
As described in Note 2(g), the Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment.
iv. Allowances for doubtful debts
As described in Note 10, the Company makes allowances for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.
v. Allowances for inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.
vi. Fair value measurement of Financial Instruments
When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. Information about the fair value of various assets and liabilities are disclosed in note 36.
Mar 31, 2016
Company Information
Vadilal Enterprise Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange in India. The Company is engaged in the marketing and distribution of the Ice cream and frozen desserts and Process food products of the brand âVadilalâ all over India except Ice cream, Dairy Product and frozen desserts in Maharashtra, Goa, Karnataka, Kerala & Andhra Pradesh.
1. Basis Of Preparation:
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act, 2013 read to-gether with Paragraph 7 ofthe Companies (Accounts) Rules,2014. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for certain fixed assets which are carried at revalued amount.
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
1.1. Significant accounting policies
A) USE OF ESTIMATES:
Preparation of financial statements in conformity with the generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates, are recognized in the period in which the results are known / materialized.
B) FIXED ASSETS AND DEPRECIATION:
TANGIBLE ASSETS :
(i) Fixed assets are stated at cost of acquisition & installation, less accumulated depreciation and impairment loss, if any. Borrowing costs incurred during the period of construction/ acquisition of assets are added to the cost of Fixed Assets. Major expenses on modification /alterations increasing efficiency/capacity of the plant are also capitalized. Exchange differences arising out of fluctuations in exchange rate on settlement/period end in long term foreign currency monetary liabilities used for acquisition of fixed assets are adjusted to the cost of the fixed assets and depreciated over the remaining useful life of the asset.
INTANGIBLE ASSETS :
(ii) Intangible assets are carried at cost less accumulated amortization and impairment if any.
DEPRECIATION & AMORTISATION:
(iii) (a) Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used.
(iii) (b) Software is amortized on straight line basis over a period of five years.
(iv) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of tangible assets exceeds its recoverable amount. The recoverable amount is measured as the higher of the net selling price & the value in use determined by the present value of estimated future cash flows.
C) INVESTMENTS:
Investments are classified as noncurrent investments and are stated at cost. A Provision for diminution in the value of noncurrent investments is made for each investment individually, only if such decline is other than temporary.
D) INVENTORIES:
Inventories are valued as under:
INVENTORY VALUATION METHOD
(i) Finished Goods : At lower of Cost or Net realizable value. Cost is determined on ''Weighted Average'' basis. (Trading)
(ii) Machinery Parts : At lower of Cost or Net realizable value. Cost is determined on ''Weighted Averageâ basis. Due provision for obsolescence and wear & tear is made.
E) REVENUE RECOGNITION:
(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue from Sale of goods is recognized 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.
(ii) Sales are shown net of Damages, Trade Discount and Special Scheme Discount. Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable certainty of recovery.
(iv) Dividend income from Investment is accounted for when the right to receive is established
(v) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
(vi) Lease Rent income are accounted when there is reasonable certainty of recovery.
F) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc, and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance scheme are defined contribution plans. The contribution paid / payable under the schemes is recognised during the period in which the employees renders the related services.
(ii) Defined Benefit Plans:
The employee''s gratuity fund scheme and compensated absences is company''s defined benefit plans.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government Securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and loss account.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligations under the defined benefit plans, to recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefits plans are recognized when the curtailment or settlement occurs. Past service cost is recognized as expense on a straight -line basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term compensated absences, is recognized in the same manner as in case of defined benefit plans as mentioned in (b)(ii) above.
G) BORROWING COST:
Borrowing cost utilized for acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets till the activities necessary for its intended use are complete. All other borrowing costs are charged in statement of profit & loss of the year in which incurred.
H) TAXES ON INCOME :
a) Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such asset. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed at each Balance Sheet date to reassess realization.
b) MAT Credit Entitlement
MAT credit is recognized as an asset only when there is convincing evidence that the company will pay normal income tax within the specified period. The asset shall be reviewed at each balance sheet date.
I) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.
(ii) Assets and Liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the year-end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognized over the life of the contract. The difference in translation of current assets and current liabilities is recognized in the statement of Profit & Loss.
(iii) Exchange differences, in respect of accounting periods commencing on or after 7th December,2006 arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the remaining useful life of the asset, and in other cases are accumulated in a âForeign currency Monetary item Translation Difference Accountâ in the company''s financial statements and amortized Accountâ in the company''s financial statements and amortized over the balance period of such long term asset/liability but not beyond accounting period ending on or before 31st March, 2020.
J) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognized when the company has present legal or constructive obligation, as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. These are reviewed at each year end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.
K) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which have a material effect on the financial position of the company are considered for preparing the financial statement.
L) EARNINGS PER SHARE:
Basic Earnings Per Share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares Outstanding during the period. 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 are adjusted for the effects of all dilutive potential equity shares.
M) LEASES :
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expenses in the statement of profit and loss.
N) CASH AND CASH EQUIVALENTS :
Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.
O) CASH FLOW STATEMENT :
Cash flow statement is prepared using the indirect method, whereby profit before extraordinary item and tax is adjusted for the effect of transitions of non - cash nature and any deferrals or accruals of past or future cash receipts or payment. The cash flow from operating, investing and financing of the company are segregated based on the available informationâs.
Terms/rights attached to equity shares
The company has only one class of equity shares having a par value ofRs.10 per share. Each holder of equity share is entitled to one vote per share. The company declares & pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General meeting.
During the year ended 31 March 2016,the amount of per share dividend recognized as distributions to equity shareholders was Rs.0.80 (P.Y.Rs. 0.80)
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be distributed in the number of equity shares held by the shareholders.
The company does not have any holding company.
The company has not issued any bonus shares, or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of balance sheet.
Mar 31, 2015
A) USE OF ESTIMATES:
Preparation of financial statements in confirmity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and the reported amount of revenue and expenses during the
reporting period. Difference between the actual results and estimates,
are recognised in the period in which the results are
known/materialised.
B) FIXED ASSETS AND DEPRECIATION:
TANGIBLE ASSETS :
(i) Fixed assets are stated at cost of acquisition & installation,less
accumulated depreciation and impairment loss, if any. Borrowing costs
incurred during the period of construction/ acquisition of assets are
added to the cost of Fixed Assets. Major expenses on modification
/alterations increasing efficiency/capacity of the plant are also
capitalised. Exchange differences arising out of fluctuations in
exchange rate on settlement/period end in long term foreign currency
monetary liabilities used for acquisition of fixed assets are adjusted
to the cost of the fixed assets and depreciated over the remaining
useful life of the asset.
INTANGIBLE ASSETS :
(ii) Intangible assets are carried at cost less accumulated
amortisation and impairment if any. DEPRECIATION & AMORTISATION :
(iii) (a) Depreciation is provided based on useful life of the assets
as prescribed in Schedule II to the Companies Act, 2013 except in
respect of the following assets, where useful life is different than
those prescribed in Schedule II are used.
Particulars Estimated Useful Life
Building
1) Office Building 58 Years
Plant & Machinery
1) Push Carts,Tricycles, &
Insulated Iron / Plastic Boxes 5 Years
2) Specific assets of Parlour 3 Years
3) Freezer on wheels 7 Years
(b) Software is amortised on straight line basis over a period of five
years.
(iv) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of tangible
assets exceeds its recoverable amount. The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
C) INVESTMENTS:
Investments are classified as non current investments and are stated at
cost. A Provision for diminution in the value of non current
investments is made for each investment individually,only if such
decline is other than temporary.
D) INVENTORIES:
Inventories are valued as under:
INVENTORY VALUATION METHOD
(i) Finished Goods : At lower of Cost or Net realisable value. Cost is
determined on 'FIFO' basis. (Trading)
(ii) Machinery Parts : At lower of Cost or Net realisable value. Cost
is determined on 'Weighted Average' basis.
Due provision for obsolescence and wear & tear
is made.
E) REVENUE RECOGNITION:
(i) 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.
(ii) Sales are shown net of Damages, Trade Discount and Special Scheme
Discount. Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable
certainty of recovery.
(iv) Dividend income from Investment is accounted for when the right to
receive is established
(v) Interest income is recognised on time proportion basis taking into
account the amount outstanding and the rate applicable.
(vi) Lease Rent income are accounted when there is reasonable certainty
of recovery.
F) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognised in the period in which
the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the
employees renders the related services.
(ii) Defined Benefit Plans:
The employee's gratuity fund scheme and compensated absences is
company's defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognises each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Acturial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
G) BORROWING COST:
Borrowing cost utilized for acquisition,construction or production of
qualifying assets are capitalised as part of cost of such assets till
the activities necessary for its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
H) TAXES ON INCOME :
a) Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised,on timing
differences,being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is virtual certainity of realisation of such asset.Other deferred tax
assets are recognised only to the extent there is resonable certainity
of realisation in future. Such assets are reviewed at each Balance
Sheet date to reassess realisation.
b) MAT Credit Entitlement
MAT credit is recognised as an asset only when there is convincing
evidence that the company will pay normal income tax within the
specified period. The asset shall be reviewed at each balance sheet
date.
I) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction,such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the statement of Profit & Loss.
(iii) Exchange differences, in respect of accounting periods commencing
on or after 7th December,2006 arising on reporting of long-term foreign
currency monetary items at rates different from those which they were
initially recorded during the period, or reported in previous financial
statements,in so far as they relate to the acquisition of a depreciable
capital asset, are added to or deducted from the cost of the asset and
are depreciated over the remaining useful life of the asset, and in
other cases are accumulated in a "Foreign currency Monetary item
Translation Difference Account" in the company's financial statements
and amortised Account" in the company's financial statements and
amortised over the balance period of such long term asset/liability but
not beyond accounting period ending on or before 31st March, 2020.
J) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation,as a result of past events,for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation. These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
K) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement.
L) EARNINGS PER SHARE:
Basic Earning Per Share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares Outstanding during the period. For the
purpose of calculating diluted earning 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 are
adjusted for the effects of all dilutive potential equity shares.
M) LEASES:
Leases, where the lessor effectively retains substaintially all the
risks and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments are recognized as an
expenses in the statement of profit and loss.
N) CASH AND CASH EQUIVALENTS :
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments with an
orignal maturity of three months or less.
O) CASH FLOW STATEMENT :
Cash flow statement is prepared using the indirect method, whereby
profit before extraordinary item and tax is adjusted for the effect of
transations of non - cash nature and any deferrals or accruals of past
or future cash receipts or payment. The cash flow from operating,
investing and financing of the company are segregated based on the
available informations.
Mar 31, 2014
A) USE OF ESTIMATES:
Preparation of financial statements in confirmity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and accompanying notes. Difference between the actual
results and estimates, are recognised in the period in which the
results are known/materialised.
B) FIXED ASSETS AND DEPRECIATION:
TANGIBLE ASSETS :
(i) Fixed assets are stated at cost of acquisition & installation, less
accumulated depreciation and impairment loss, if any. Borrowing costs
incurred during the period of construction/acquisition of assets are
added to the cost of Fixed Assets. Major expenses on modification /
alterations increasing efficiency / capacity of the plant are also
capitalised. Exchange differences arising out of fluctuations in
exchange rate on settlement / period end in long term foreign currency
monetary liability used for acquisition of fixed assets are adjusted to
the cost of the fixed assets and depreciated over the remaining useful
life of the asset.
INTANGIBLE ASSETS :
(ii) Intangible assets are carried at cost less accumulated
amortisation and impairment if any.
DEPRECIATION :
(iii) Depreciation on fixed assets is provided on "Straight Line
Method" at the rates and in the manner prescribed in Schedule XIV of
the Companies Act,1956,(as amended), except incase of.
(a) Electrical installation (Acrylic Glow Sign Board & Translite)
addition made upto 31.03.09, Push Carts,Tricycles, & Insulated Iron /
Plastic Boxes in respect of which depreciation is charged at 20% based
on the estimated useful life of five years.
(b) On specific assets of Parlour on which depreciation is charged at
33.33% based on the estimated useful life of three years.
(c) In respect of Deep Freeze Machines for addition from the year
2001-02,depreciation is charged at 10% based on estimated useful life
of Ten years.
(d) On freezer on wheels, depreciation is provided on the basis of
estimated useful life of seven years.
(e) Cost of electrical installation more than five years old and their
corresponding depreciation are adjusted from gross block of tangible
assets and depreciation fund respectively.
(f) Software is amortised on straight line basis over a period of 5
years.
(iv) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of tangible
assets exceeds its recoverable amount.The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
C) INVESTMENTS:
Investments are classified as non current investments and are stated at
cost.A Provision for diminution in the value of non current investments
is made for each investment individually,only if such decline is other
than temporary.
D) INVENTORIES:
Inventories are valued as under:
INVENTORY VALUATION METHOD
(i) Finished Goods : At lower of Cost or Net realisable value. Cost is
determined on ''FIFO'' basis.
(Trading)
(ii) Machinery Parts : At lower of Cost or Net realisable value. Cost
is determined on ''Weighted Average'' basis.Due provision for obsolescence
and wear & tear is made.
E) REVENUE RECOGNITION:
(i) 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.
(ii) Sales are shown net of Damages, Trade Discount and Special Scheme
Discount.Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable
certainty of recovery.
(iv) Dividend income from Investment is accounted for when the right to
receive is established.
(v) Interest income is recognised on time proportion basis taking into
account the amount outstanding and the rate applicable.
(vi) Lease Rent income are accounted when there is reasonable certainty
of recovery.
F) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognised in the period in which
the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the
employees renders the related services.
(ii) Defined Benefit Plans:
The employee''s gratuity fund scheme and compensated absences is
company''s defined benefit plans. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, which recognises each
period of service as giving rise to additional unit of employee
benefits entitlement and measures each unit separately to build up the
final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Acturial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
G) BORROWING COST:
Borrowing cost utilized for acquisition,construction or production of
qualifying assets are capitalised as part of cost of such assets till
the activities necessary for its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
H) TAXES ON INCOME :
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised,on timing
differences,being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is virtual certainty of realisation of such asset.Other deferred tax
assets are recognised only to the extent there is resonable certainty
of realisation in future. Such assets are reviewed at each Balance
Sheet date to reassess realisation.
I) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction,such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the statement of Profit & Loss.
(iii) Exchange differences, in respect of accounting periods commencing
on or after 7th December,2006 arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable capital asset, are added to or deducted from the cost of
the asset and are depreciated over the remaining useful life of the
asset, and in other cases are accumulated in a "Foreign currency
Monetary item Translation Difference Account" in the company''s
financial statements and amortised Account" in the company''s
financial statements and amortised over the balance period of such long
term asset/liability but not beyond accounting period ending on or
before 31st March, 2020.
J) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation,as a result of past events,for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation.These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
K) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement.
L) EARNINGS PER SHARE:
Basic Earning Per Share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earning 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 are
adjusted for the effects of all dilutive potential equity shares.
M) LEASES :
Leases, where the lessor effectively retains substaintially all the
risks and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments are recognized as an
expenses in the statement of profit and loss.
N) CASH AND CASH EQUIVALENTS :
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments with an
original maturity of three months or less.
O) CASH FLOW STATEMENT :
Cash flow statement is prepared using the indirect method, whereby
profit before extraordinary item and tax is adjusted for the effect of
transations of non - cash nature and any deferrals or accruals of past
or future cash receipts or payment. The cash flow from operating,
investing and financing of the company are segregated based on the
available informations.
P) MEASUREMENT OF EBITDA :
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act 1956, the Company has elected to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/(loss) from continuing
operations. In its measurement, the company does not include
deperciation and amortization expense, finance costs and tax expense.
Mar 31, 2013
A) USE OF ESTIMATES:
Preparation of financial statements in confirmity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and accompanying notes. Difference between the actual
results and estimates, are recognised in the period in which the
results are known/materialised.
B) FIXED ASSETS AND DEPRECIATION:
TANGIBLE ASSET :
(i) Fixed assets are stated at cost of acquisition & installation, less
accumulated depreciation and impairment loss, if any. Borrowing costs
incurred during the period of construction/acquisition of assets are
added to the cost of Fixed Assets. Major expenses on modification /
alterations increasing efficience / capacity of the plant are also
capitalised. Exchange differences arising out of fluctuations in
exchange rate on settlement / period end in long term foreign currence
monetary liabilities used for acquisition of fixed assets are adjusted
to the cost of the fixed assets and depreciated over the remaining
useful life of the asset.
(ii) From April 1, 2012 the company has changed the accounting of
purchase of Deep freeze machines and Freezer on wheel by debiting to
CWIP/Addition to Fixed assets which was earlier debited to purchase of
stock in trade. The stock of Deep freeze machines and Freezer on wheel
as on April 1, 2012 have also been transferred to CWIP/Addition to
Fixed assets from Inventory. However,due to such change profit for the
year ended on March 31,2013 has not been impacted
INTANGIBLE ASSET :
(iii) Intangible assets are carried at cost less accumulated
amortisation and impairment if any.
(iv) Depreciation on fixed assets is provided on "Straight Line Method"
at the rates and in the manner prescribed in Schedule XIV of the
Companies Act,1956,.(as amended). Except incase of
(a) Electrical installation (Acrylic Glow Sign Board & Translite)
addition made upto 31.03.09, Push Carts,Tricycles, & Insulated Iron /
Plastic Boxes in respect of which depreciation is charged at 20% based
on the estimated useful life of five years.
(b) On Plastic Crates and on specific assets of Happinezz Parlour on
which depreciation is charged at 33.33% based on the estimated useful
life of three years.
(c) In respect of Deep Freeze Machines for addition from the year
2001-02,depreciation is charged at 10% based on estimated useful life
of Ten years.
(d) On Freezer on wheels depreciation is provided on the basis of
estimated useful life of seven years.
(e) Cost of electrical installation more than five years old and their
corresponding depreciation are adjusted from gross block of tangible
assets and depreciation fund respectively.
(f) Software is amortised on straight line basis over a period of 5
years.
(v) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of tangible
assets exceeds its recoverable amount.The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
C) INVESTMENTS:
Investments are classified as non current investments and are stated at
cost.A Provision for diminution in the value of non current investments
is made for each investment individually,only if such decline is other
than temporary.
D) INVENTORIES:
Inventories are valued as under:
INVENTORY VALUATION METHOD
(i) Finished Goods : At lower of Cost or Net realisable value. Cost is
determined on (Trading) ''FIFO'' basis. Due provision for obsolescence
and wear & tear is made.
(ii) Machinery Parts : At lower of Cost or Net realisable value. Cost
is determined on ''Weighted Average'' basis. Due provision for
absolescence and wear & tear is made.
E) REVENUE RECOGNITION:
(i) 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.
(ii) Sales are shown net of Damages, Trade Discount and Special Scheme
Discount.Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable
certainty of recovery. ( iv) Dividend income from Investment is
accounted for when the right to receive is established (v) Interest
income is recognised on time proportion basis taking into account the
amount outstanding and the rate applicable.
F) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits :
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognised in the period in which
the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the
employees renders the related services.
(ii) Defined Benefit Plans:
The employee''s gratuity fund scheme and compensated absences is
company''s defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognises each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Acturial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
G) BORROWING COST:
Borrowing cost utilized for acquisition,construction or production of
qualifying assets are capitalised as part of cost of such assets till
the activities necessary for its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
H) TAXES ON INCOME :
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised,on timing
differences,being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods.Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is virtual certainity of realisation of such asset.Other deferred tax
assets are recognised only to the extent there is resonable certainity
of realisation in future. Such assets are reviewed at each Balance
Sheet date to reassess realisation.
I) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction,such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the statement of Profit & Loss.
(iii) Exchange differences,in respect of accounting periods commencing
on or after 7th December,2006 arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable capital asset, are added to or deducted from the cost of
the asset and are depreciated over the remaining useful life of the
asset, and in other cases are accumulated in a "Foreign currency
Monetary item Translation Difference Account" in the company''s
financial statements and amortised Account" in the company''s financial
statements and amortised over the balance period of such long term
asset/liability but not beyond accounting period ending on or before
31st March, 2020.
J) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation,as a result of past events,for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation.These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
K) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement.
L) EARNINGS PER SHARE:
Basic Earning Per Share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares Outstanding during the period. For the
purpose of calculating diluted earning 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 are
adjusted for the effects of all dilutive potential equity shares.
M) LEASES :
Leases, where the lessor effectively retains substaintially all the
risks and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments are recognized as an
expenses in the statement of profit and loss on a straight line basis
over the lease term.
N) CASH AND CASH EQUIVALENTS :
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments with an
orignal maturity of three months or less.
O) CASH FLOW STATEMENT :
Cash flow statement is prepared using the indirect method, whereby
profit before extraordinary item and tax is adjusted for the effect of
transations of non - cash nature and any deferrals or accruals of past
or future cash receipts or payment. The cash flow from operating,
investing and financing of the company are segregated based on the
available informations.
P) MEASUREMENT OF EBITDA :
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act 1956, the Company has elected to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/(loss) from continuing
operations. In its measurement, the company does not include
deperciation and amortization expense, finance costs and tax expense.
Additional informmation to the Financial Statements
Mar 31, 2012
A) ACCOUNTING CONVENTION:
The financial statements have been prepared in accordance with the
accounting principles generally accepted in India (Indian GAAP) and
comply with the Companies (Accounting Standards) Rules, 2006, issued by
the Central Government and relevant provisions of Companies Act, 1956
and are based on the historical cost convention.
B) USE OF ESTIMATES:
Preparation of financial statements in conformity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and accompanying notes. Difference between the actual
results and estimates, are recognised in the period in which the
results are known/materialized.
C) REVENUE RECOGNITION:
(i) Revenue is recognised when it is earned and no significant
uncertainty exists as to its realization 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.
(ii) Sales are shown net of Damages, Trade Discount and Special Scheme
Discount. Sales do not include Value Added Tax.
(iii) Service charges income is accounted when there is reasonable
certainty of recovery.
(iv) Income of Forex Advisory Fees accounted on accrual basis.
(v) Dividend income from Investment is accounted for when the right to
receive is established
(vi) Interest income is recognised on time proportion basis taking into
account the amount outstanding and the rate applicable.
D) FIXED ASSETS AND DEPRECIATION:
(i) Fixed assets are stated at cost of acquisition & installation, net
of cenvat and VAT credits availed, if any, less accumulated
depreciation and impairment loss, if any. Borrowing costs incurred
during the period of construction/ acquisition of assets is added to
the cost of Fixed Assets. Major expenses on modification / alterations
increasing efficiency/capacity of the plant are also capitalized.
Exchange differences arising out of fluctuations in exchange rate on
settlement/period end in long term foreign currency monetary
liabilities used for acquisition of fixed assets are adjusted to the
cost of the fixed assets and depreciated over the remaining useful life
of the asset.
(ii) Depreciation on fixed assets is provided on "Straight Line
Method" at the rates and in the manner prescribed in Schedule XIV of
the Companies Act,1956,.(as amended) except in case of;
(a) Electrical installation (Acrylic Glow Sign Board & Translite)
addition made upto 31.03.09, Push Carts, Tricycles, & Insulated Iron /
Plastic Boxes in respect of which depreciation is charged at 20% based
on the estimated useful life of five years.
(b) On Plastic Crates and on specific assets of Happinezz Parlour on
which depreciation is charged at 33.33% based on the estimated useful
life of three years.
(c) In respect of Deep Freeze Machines for addition from the year
2001-02, depreciation is charged at 10% based on estimated useful life
of Ten years.
(d) Cost of electrical installation more than five years old and their
corresponding depreciation are adjusted from gross block of tangible
assets and depreciation fund respectively.
Change in estimates :
(e) With effect from 1-04-2011 the company has reviewed the estimated
useful life of Freezer on
wheels and estimated useful life is revised from 5 years to 7 years.
Accordingly depreciation for the year is provided considering the
revised rates. If depreciation had been provided at the old rates,
depreciation would have been higher by Rs. 35.92 for the year and profit
before tax lower by an equivalent amount.
(iii) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of tangible
assets exceeds its recoverable amount. The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
E) INVESTMENTS:
Investments are classified as non-current investments and are stated at
cost. A Provision for diminution in the value of non-current
investments is made for each investment individually, only if such
decline is other than temporary.
(F) INVENTORIES:
Inventories are valued as under:
INVENTORY VALUATION METHOD
(i) Finished Goods : At lower of Cost or Net realizable value. Cost is
determined on (Trading) 'FIFO' and 'Special identification' basis,
whichever applicable. Due provision for obsolescence and wear & tear is
made.
(ii) Machinery Parts : At Lower of cost or Net realizable Value. Cost
is determined on "Weighted Average" basis.
Due Provision for obsolescence and wear & tear is made.
G) EMPLOYEES BENEFITS:
(a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, and short term compensated absences, etc., and
the expected cost of bonus, ex-gratia are recognised in the period in
which the employee renders the related service.
(b) Post-Employment Benefits:
(i) Defined Contribution Plans:
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the employee
renders the related services.
(ii) Defined Benefit Plans:
The employee's gratuity fund scheme and compensated absences is
company's defined benefit plans. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee
benefits entitlement and measures each unit separately to build up the
final obligation. The obligation is measured at the present value of
the estimated future cash flows. The discount rates used for
determining the present value of the obligation under defined benefit
plans, is based on the market yields on Government Securities as at the
balance sheet date, having maturity periods approximating to the terms
of related obligations.
Actuarial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognize the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits:
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
H) BORROWING COST:
Borrowing cost utilized for acquisition, construction or production of
qualifying assets are capitalized as part of cost of such assets till
the activities necessary for its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
(I) TAXES ON INCOME:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is virtual certainty of realization of such asset. Other deferred tax
assets are recognised only to the extent there is reasonable certainty
of realization in future. Such assets are reviewed at each Balance
Sheet date to reassess realization.
(J) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction, such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the statement of Profit & Loss.
(iii) Exchange differences, in respect of accounting periods commencing
on or after 7th December,2006 arising on reporting of long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in previous
financial statements, in so far as they relate to the acquisition of a
depreciable capital asset, are added to or deducted from the cost of
the asset and are depreciated over
the remaining useful life of the asset, and in other cases are
accumulated in a "Foreign currency Monetary item Translation
Difference Account" in the company's financial statements and
amortized over the balance period of such long term asset/liability but
not beyond accounting period ending on or before 31st March, 2020.
(K) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation, as a result of past events, for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation. These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
(L) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement.
(M) EARNINGS PER SHARE:
Basic Earnings Per Share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. 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 are
adjusted for the effects of all dilutive potential equity shares.
(N) LEASES:
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight line basis over the
lease term.
(O) CASH AND CASH EQUIVALENTS:
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short term investments with an
original maturity of three months or less.
(P) MEASUREMENT OF EBITDA:
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2011
(A) ACCOUNTING CONVENTION :
The financial statements have been prepared in accordance with the
accounting principles generally accepted in India (Indian GAAP) and
comply with the Companies (Accounting Standards) Rules, 2006, issued by
the Central Government and relevant provisions of Companies Act, 1956
and are based on the historical cost convention as modified to include
the revaluation of certain fixed assets.
(B) USE OF ESTIMATES:
Preparation of financial statements in confirmity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and accompanying notes. Difference between the actual
results and estimates, are recognised in the period in which the
results are known/materialised.
(C) REVENUE RECOGNITION:
SALES ACCOUNTING:
(i) 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.
(ii) Sales are shown net of Damages,Trade Discount and Special Scheme
Discount.Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable
certainty of recovery.
(iv) Income of Forex Advisory Fees accounted on accrual basis.
(v) Dividend income from Investment is accounted for when the right to
receive is established
(D) FIXED ASSETS AND DEPRECIATION & IMPAIRMENT:
(i) Fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment loss.Other attributable cost incurred for
bringing the fixed assets to its intended use are added to the cost of
Fixed Assets.Adjustments arising from exchange rate variations relating
to transaction in foreign currencies attributable to Fixed Assets are
capitalized.
(ii) Depreciation on fixed assets is provided on "Straight Line Method"
at the rates and in the manner prescribed in Schedule XIV of the
Companies Act,1956,.(as amended) except in case of;
(a) On electrical installation (Acrylic Glow Sign Board & Translite)
addition made upto 31.03.09, Push Carts,Tricycles, Insulated Iron /
Plastic Boxes and Freezer on wheels in respect of which depreciation is
charged at 20% based on the estimated useful life of five years.
(b) On Plastic Crates and on specific assets of Happinezz Parlour on
which depreciation is charged at 33.33% based on the estimated useful
life of three years.
(c) In respect of Deep Freeze Machines for addition from the year
2001-02,depreciation is charged at 10% based on estimated useful life
of Ten years.
(d) Cost of electrical installation more than five years old and their
corresponding depreciation are adjusted from gross block of fixed
assets and depreciation fund respectively.
(iii) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of fixed
assets exceeds its recoverable amount.The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
(E) INVESTMENTS:
Investments are classified as long term investments and are stated at
cost.A Provision for diminution in the value of long term investments
is made for each investment individually,only if such decline is other
than temporary.
(F) INVENTORIES:
Inventories are valued as under: INVENTORY VALUATION METHOD
(i) Finished Goods At Cost or Net realisable value whichever is
lower.Cost is determined on ÃFIFO' and (Trading) ÃSpecial
identification' basis, whichever applicable.Due provision for
obsolescence and wear & tear is made.
(ii) Machinery Parts At Lower of cost or Net realisable Value.Cost is
determined on"Weighted Average" basis.Due Provision for obsolescence
and wear & tear is made.
(G) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognised in the period in which
the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the
employees renders the related services.
(ii) Defined Benefit Plans:
The employee's gratuity fund scheme and compensated absences is
company's defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognises each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Acturial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
(H) FOREIGN CURRENCY TRANSACTIONS:
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction,such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the Profit & Loss Account.
(I) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation,as a result of past events,for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation.These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
(J) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement.
(K) BORROWING COST:
Borrowing cost utilized for acquisition,construction or production of
qualifying assets are capitalised as part of cost of such assets till
the activities necessary for its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
(L) TAXES ON INCOME :
(i) Current tax is determined as the amount of tax payable in respect
of taxable income for the year. Deferred tax is recognised,on timing
differences,being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods.Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is reasonable certainity of realisation of such asset.Other deferred
tax assets are recognised only to the extent there is resonable
certainity of realisation in future. Such assets are reviewed at each
Balance Sheet date to reassess realisation.
(M) MISCELLANEOUS EXPENDITURE :
Upfront interest paid on restructuring of term loans is amortised over
the tenure of such loans.
Mar 31, 2010
(A) ACCOUNTING CONVENTION :
The financial statements have been prepared in accordance with the
accounting principles generally accepted in India (Indian GAAP) and
comply with the Companies (Accounting Standards) Rules,2006, issued by
the Central Government and relevant provisions of Companies Act, 1956
and are based on the historical cost convention as modified to include
the revaluation of certain fixed assets.
(B) USE OF ESTIMATES:
Preparation of financial statements in confirmity with the generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of the financial
statements and accompanying notes. Differance between the actual
results and estimates, are recognised in the period in which the
results are known/ materialised.
(C) REVENUE RECOGNITION:
SALES ACCOUNTING:
(i) Revenue is recognised when it is earned and no significant
uncertainly 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.
(li) Sales are shown net of Damages.Trade Discount and Special Scheme
Discount.Sales do not include Value Added Tax.
(iii) Service charges income are accounted when there is reasonable
certainty of recovery.
(iv) Income of Forex Advisory Fees accounted on accural basis.
(v) Dividend income from Investment is accounted for when the right to
receive is established
(D) FIXED ASSETS AND DEPRECIATION & IMPAIRMENT:
(i) Fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment loss.Other attributable cost incurred for
bringing the fixed assets to its intended use are added to the cost of
Fixed Assets.Adjustments arising from exchange rate variations relating
to transaction in foreign currencies attributable to Fixed Assets are
capitalised.
(ii) Depreciation on fixed assets is provided on "Straight Line Method"
at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1356,.(as amended) except in case of;
(a) On electrical installation (Acrylic Glow Sign Board &Translite)
addition madeupto31.03.09, Push Carts.Tricycles, Insulated Iron /
Plastic Boxes and Freezer on wheels in respect of which depreciation is
charged at 20% based on the estimated useful life of five years.
(b) On Plastic Crates and on specific assets of Happinezz Parlour on
which depreciation is charged at 33.33% based on the estimated useful
life of three years.
(c) In respect of Deep Freeze Machines for addition from the year
2001-02,depreciation is charged at 10% based on estimated useful life
of Ten years.
(d) Cost of electrical installation more than five years old and their
corresponding depreciation are adjusted from gross block of fixed
assets and depreciation fund respectively.
(iii) IMPAIRMENT OF ASSETS:
The carrying amount of assets is reviewed a? each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of fixed
assets exceeds its recoverable amount.The recoverable amount is
measured as the higher of the net selling price & the value in use
determined by the present value of estimated future cash flows.
(E) INVESTMENTS:
Investments are classified as long term investments and are stated at
cost.A Provision for diminution in the value of long term investments
is made for each investment individually.only if such decline is other
than temporary.
(F) INVENTORIES:
Inventories are valued as under:
INVENTORY . VALUATION METHOD
(i) Finished Goods. At Cost or Net realisable value whichever is
lower.Cost is determined on FIFO and (Trading) Special
identification basis, whichever applicable. Due provision for
obsolescence
and wear & tear is made. (ii) Machinery Parts. At Lower of cost or
Net realisable Value.Cost is determined on"Weighted Average" basis.
Due Provision for obsolescence and wear & tear is made.
(G) EMPLOYEES BENEFITS :
(a) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex- gratia are recognised in the period in
which the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed provident fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the schemes is recognised during the period in which the
employees renders the related services. (ii) Defined Benefit Plans:
The employees gratuity fund scheme and compensated absences is
companys defined benefit plans. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, which recognises each
period of service as giving rise to additional unit of employee
benefits entitlement and measures each unit separately to build up the
final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Secuirties as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Acturial gains and losses are recognised immediately in the profit and
loss account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligations under the defined benefit plans, to
recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognised when the curtailment or settlement
occurs. Past service cost is recognised as expense on a straight -line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognised in the same manner as in case of
defined benefit plans as mentioned in b)ii) above.
(H) FOREIGN CURRENCY TRANSACTIONS:
(i) transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Assets and Liabilities related to foreign currency transactions
remaining unsettled at the end of the year are translated at the
year-end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction,such difference having
been recognised over the life of the contract. The difference in
translation of current assets and current liabilities is recognized in
the Profit & Loss Account. (I) PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS:
Provisions are recognised when the company has present legal or
constructive obligation,as a result of past events,for which it is
probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made for the amount of the obligation.These are reviewed at each year
end and adjusted to reflect the best current estimate.
Contingent Liabilities are disclosed by way of notes to Accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
(J) CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE:
All contingencies and events occurring after Balance Sheet date which
have a material effect on the financial position of the company are
considered for preparing the financial statement. (K) BORROWING COST:
Borrowing cost utilized for acquisition,construction or production of
qualifying assets are capitalised as part of cost of such assets till
the activities necessary for Its intended use are complete. All other
borrowing costs are charged in statement of profit & loss of the year
in which incurred.
(L) TAXES ON INCOME :
(i) Current tax is determined as the amount of tax payable in respect
of taxable income for the year. Deferred tax is recognised.on timing
differences,being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods.Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is reasonable certainity of realisation of such asset.Other deferred
tax assets are recognised only to the extent there is resonable
certainity of realisation in future. Such assets are reviewed at each
Balance Sheet date to reassess realisation.
(M) MISCELLANEOUS EXPENDITURE :
Upfront interest paid on restructuring of term loans is amortised over
the tenure of such loans.
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