Accounting Policies of Captain Pipes Ltd. Company

Mar 31, 2016

A Corporate Information

Captain Pipes Ltd. (‘the company”) having its manufacturing facilities at Shapar (Veraval), Rajkot, is engaged in the business of manufacturing and selling of UPVC pipes and fittings.

2. Significant accounting policies :

(i) Basis of preparation

These financial statements are prepared in accordance with Schedule III of the Companies Act, 2013 and under the historical cost basis of accounting and evaluated on a going concern basis, with revenues and expenses accounted for on their accrual to comply in all material aspects with the applicable accounting principles and applicable Accounting Standards notified under section 133 of the Companies Act, 2013 (The Act) read with rule 7 of Companies (Accounts) Rules, 2014. The accounting policies have been consistently applied by the Company; and the accounting policies not referred to otherwise, are in conformity with Indian Generally Accepted Accounting Principles (''Indian GAAP'').

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year unless otherwise stated.

(ii) Use of Estimates:

The preparation of financial statements require estimates and assumptions to be made that affect the reported balances of assets as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

(iii) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Sales of Goods:

Sales are recognized when significant risks and rewards of ownership of goods have been passed to the buyer.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend:

Revenue is recognized on a time proportion basis when right to receive the same gets established.

(iv) Tangible Fixed Assets :

Fixed assets are stated at their cost of acquisition plus all expenditure incurred for bringing the assets to their present location and condition including the installation cost. All costs, including specific financing cost till assets put to use, net charges on foreign exchange contracts and adjustment arising from foreign exchange rate variations attributable to the fixed assets are capitalized.

(v) Depreciation / Amortization :

The company has charged depreciation on fixed assets on Straight Line Method (SLM) method on the basis of useful life / remaining useful life and in the manner as prescribed in, Part C, Schedule II of the Companies Act, 2013. Depreciation on additions/ disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.

(vi) Inventories:

Inventories of Raw Materials and Finished Goods are stated at cost or net realizable value, whichever is lower. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formula used is ‘First in first Out Method’. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

(vii) Retirement Benefits and other employee benefits :

Defined Contribution Plans :

Defined contribution to provident fund is charged to the profit and loss account on accrual basis. Gratuity:

Provision for gratuity is provided based on valuation made at the end of the financial year, by the management of the company in respect of employees who have completed five or more years of services and are eligible for gratuity at departure @15 days salary (Last drawn salary) for each completed year of service.

Leave encashment expenditure is charged to profit and loss account at the time of leave encashed and paid, if any. Bonus expenditure is charged to profit and loss account on accrual basis.

(viii) Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

Foreign currency current assets and current liabilities outstanding at the balance sheet date are translated at the exchange rate prevailing on that date and the net gain or loss is recognized in the profit and loss account.

Foreign currency translation differences relating to liabilities incurred for purchasing of fixed assets from foreign countries are adjusted in the carrying cost of fixed asset for differences up to the year-end in the year of acquisition, whereas differences arising thereafter to be recognized in the profit and loss account. All other foreign currency gain or losses are recognized in the profit and loss account.

(ix) Operating Lease :

Operating leases: Assets acquired as leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals being income or expense are booked to the profit and loss account as incurred.

Initial direct costs in respect of the lease acquired are expenses off in the year in which such costs are incurred.

(x) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to profit and loss account.

(xi) Taxes on Income

Tax expenses comprise Current Tax / Minimum Alternate Tax (MAT) and deferred tax charge or credit.

Current Tax:

Provision for current tax / Minimum Alternate Tax (MAT) is made based on tax liability computed after considering tax allowances and exemptions, in accordance with the provisions of The Income Tax Act, 1961.

Deferred Tax:

Deferred tax assets and liability is recognized, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising mainly on account of brought forward losses, unabsorbed depreciation and minimum alternate tax under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

(xii) Earnings/(Loss) per Share :

Basic earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors.

(xiii) Provisions, contingent liabilities and contingent assets :

A provision is recognized when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent liabilities are disclosed by way of notes to the accounts.

Contingent assets are not recognized.

(xiv) Investments :

Investments being Non-Current Investments consist of investments made in equity shares of associate. Investments are stated at cost of acquisition.

(xv) Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand, cheques on hand and short-term investments with an original maturity of three months or less.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

(xvi) Government Grants & Assistance:

This includes cash subsidy being received for fixed assets being non-repayable is grouped under Capital Reserve.

(xvii) Segment Reporting:

In accordance with Accounting Standard-17 - “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company has identified its business segment as "Manufacturing of UPVC pipes and fittings". There are no other primary reportable segments. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

(xviii) Share Issue Expenses:

Portion of share issue expenses being in nature of deferred revenue expenses incurred for raising the money through initial public offer are amortized to profit and loss account over period of five years from the commencement of the relevant project.

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Mar 31, 2015

1. Corporate Information :

The Company is engaged in the business of manufacturing and selling of UPVC pipes and fittings since Five years.

2. Accounting Policies

3, Basis of Accounting

The financial Statements are prepared under the historical cost basis of accounting and evaluated on a going-concern basis, with revenue and expenses accounted for on their accrual to comply in all material aspect with the applicable accounting principles and applicable Accounting Standards notified U/s. 211(3C) of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013.

b. Use of Accounting Estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported balances of assets as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimate are made as and when the management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

C. Conversion of Pvt Ltd into Public Ltd Company

During the previous year pvt ltd company converted to public ltd company and would become effective from the date of 23.09,2014. Legal provision for conversion of pvt ltd in to public ltd co followed and effect for The same has been given in the books of accounts and company is continue on going concern basis.

d. Revenue Recognition

The revenue recognition principal state that, under the accrual basis of accounting, revenue should be recognized when an entity has substantially completed a revenue recognition process thus record the revenue when it has been earned. Revenue is being recognized as per AS - 9 REVENUE RECOGNITION, when an entity has substantially completed a revenue generation process.

e. Fined Assets

Fixed assets are stated at historical cost (net of Modvat/ Cenvat/ VAT) less accumulated depreciation. Subsidy received against fixed assets is reported as per AS-12 ACCOUNTING FOR GOVERNMENT GRANTS as "Deferred Income" and the same is apportioned to P&L A/c at the same rate applicable for fixed assets of depredation,

f. Depreciation and Amortization

Depreciation on Fixed Asset has been provided as per useful life of asset given in Schedule 2 of Companies Act. 2013. During the reporting financial year there has been change in method of depreciation from WDV to SUM basis. The retrospective effect for change in Method of Depreciation is given as per AS-6 ACCOUNTING FOR DEPRECIATION and the same is treated as Extra Ordinary item and has been credited to Profit and loss account. The amount of such depreciation reversed back is Rs. 82,78,646.527-.

g. Inventories

Raw materials are valued at lower of cost and net realizable value Cost is determined on first-in-first-out method, Inventories of manufactured finished goods are valued at net realizable value.

h. Investments

Investments are considered as long term (non current) investment and valued at cost- Any diminution in the value of long term (non current) investments, other than temporary, is recognized in the books of accounts. The fair market value of investment in Shares of 'Captain Polyp last Limited! is Rs.4,37,40,000/- Hence there is no diminution in the value of investment and its shown at cost in books of accounts as per AS- 13

ACCOUNTING OF INVESTMENT.

i. Sorrowing Costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of those assets till such time the asset is ready for its intended use. Other borrowing costs are recognized as expenses in the period in which they are incurred

j. Provision and Contingencies

Provisions: Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the estimate of which will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the Company or present obligation that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

K. Provision for Current and /deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the income-tax Act, 1961. Deferred Tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates applicable on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future. Calculation of Deferred Tax a$ under:

l. Cash Flow Statement

Cash Flows are reported using indirect method, whereby profit/floats) before extraordinary items and taxes is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities Of the Company are segregated based on the available information,

m. Employee Benefits

Provident Fund: Contribution towards provident Fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Scheme as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.

n. Earning per Share (EPS)

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all /ears presented is adjusted for events, such as bonus shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For The purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.