Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES :
1.1 Basis of Preparation of Financial Statements and Presentation :
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013, (âthe Actâ) and other relevant provisions of the Act.
The financial statements up to and for the year ended 31st March, 2017 were prepared in accordance with the requirement of Indian Generally Accepted Accounting Principles (GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006 and considered as âPrevious GAAPâ.
These financial statements are the Companyâs first Ind AS Standalone Financial Statements.
Companyâs financial statements are presented in Indian Rupees, which is also its functional currency.
The standalone Ind AS financial statements have been prepared on the historical cost basis except the following items
a) Financial Assets - Current Investment in Mutual Fund - Valued at Fair Market Value
b) Deferred Tax Assets/Liabilities - Valued at Fair Value on Balance Sheet approach
c) Unrealised Gain on Current Investment - Valued on Fair Market Value
d) Current Assets/Liabilities in Foreign Currencies - Valued at Fair Market Value
e) Revenue from Operation includes Indirect Taxes collected from parties (Excise Duty/GST) and reflected as Gross Revenue recognized and the payment of the same Indirect Taxes (Excise Duty/GST) reflected from Statement of Profit & Loss.
1.2 Use of Estimates and Judgements :
In preparation these Standalone Ind AS Financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.
1.3 Transition to Ind AS and Statement of Changes in Equity :
The Company has adopted Ind AS with effect from 1st April, 2017 with compraratives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April, 2016 and all the periods presented have been restated. The reconciliation between Ind AS and previous Indian GAAP for profits and reserves was presented in âStatement of Changes in Equityâ of the Company.
1.4 Measurement of Fair values :
The Company has valued Financial Assets : (a) Investment in Mutual Funds, (b) Trade Receivable and Financial Liabilities - Trade Payables at a fair value. Impact of fair value changes, if any as on the date of transition, is recognized in opening reserves and changes thereafter are recognized in Statement of Profit & Loss during the period.
1.5 Cash Flow Statement and Cash and Cash Equivalents :
Cash flow statements are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts pr payments. The Cash Flows from operating, investing and financing activities of the Company are segregated based on available information.
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.
1.6 Property, Plant and Equipment and Depreciation :
Property, Plant and Equipment i.e. Tangible Fixed Assets are stated in cost, less allowable net recoverable taxes like Excise Duty - Cenvat, Import Duty - Cenvat, Service Tax - Cenvat, State Tax -Vat, GST - Credit etc. less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, overheads directly attributable to bringing the assets to its working condition for its intended use less any recoverable tax credit entitled.
Depreciation on such tangible assets have been provided on the written down value method as per the useful life prescribed in Schedule II on the Companies Act, 2013.
1.7 Impairment of assets :
The carrying amount of the Property, Plant & Equipment i.e. Fixed Assets are reviewed at each balance Sheet sate. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized. An impairment loss is charged to the Depreciation Schedule and Statement of Profit and Loss in the year which the assets is identified as impaired.
1.8 Deferred Tax Assets/Liabilities and Provision for Deferred Tax :
Deferred Tax Assets/Liabilities valued on Balance Sheet approach on availability of future taxable profit against which tax losses and tax benefit carried forward can be used. Provision for Deferred Tax recognized on the timing differences between the taxable income and the accounting income that originate in one period and are capable of the reversal in one or more subsequent enacted as at the reporting date.
1.9 Inventories:
Items of inventories are measured as per âValuation of Inventoriesâ guidelines issued by Institute of Chartered Accountants of Indian and Institute of Cost Accountants of India. The details as follows
a) Stock of Raw Materials (inclusive of various components), Stock of Stores, spares & Consumables are valued at Cost on FIFO (First in First Out) basis (excluding the amount of Cenvat/ITC of Excise/Custom/Service Tax/GST/State Tax allowable). A separate Ledger of Cenvat/ITC credit of Excise/GST/Custom/Service Tax/State Vat credit allowable has been maintained for the purpose of utilization of Cenvat/State Vat/IGST/CGST/SGST credit and the same adjusted against the payment of Output Excise Duty/CST/State Vat/IGST/CGST/SGCT liability on account of any Sales. However the Excise Duty and GST realization from party and paid shown in a separate head in the statement of Profit & Loss as per Ind AS format. Rebate on Excise Duty/IGST on exported goods, if any realized or receivable has been adjusted against such payment of Excise Duty/IGST liability on exported goods.
b) Stock of Imported Traded Goods are valued at cost including any Custom Duty, freight and reduce any Cenvat/IGST Credit allowable.
c) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat/State Vat/IGST/CGST/SGST credit allowable) or net realizable value.
d) Stock of Scrap materials such as Brass Generated Scrap, Zinc ash/Dross, and M.S.Scrap are valued at net realizable value.
e) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no changes of method of accounting since previous year under Excise/Service Tax/State Vat Resume and thereafter GST resume and/or Previous Indian GAAP accounting method and thereafter Ind AS accounting method.
1.10 Financial Assets & Financial Liabilities :
Financial Assets & Financial Liabilities are valued at fair market value. The details as below
a) Investments in Mutual Fund are valued at fair market value as per Ind AS method of accounting. Any differences from market value and cost treated as Unrealised Gain/Losses and their deferred tax assets/liabilities etc. both are provided in Statement of Profit & Loss as per Ind AS method of presentation. The opening increase/decrease in investment from their cost and market value as on 1st April, 2016 and their deffered tax liabilities etc. adjusted against Other Equity/Reserves and thereafter recognized as per through the statement of profit & loss for the period.
b) Trade Payables and Trade receivables are valued on fair Market value. Receivables and payable in Foreign Currencies are valued at closing market rate of Balance Sheet date and any differences are recognized through statement of profit & loss account.
1.11 Provisions and contingencies :
A provision is recognized when the Company has a present obligation as a result of past events and its probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discontinues to their present value and are determined based on the best estimate 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.
However as per implementation of Ind AS there are no provision made for proposed dividend and their dividend taxes, which will be approved in forthcoming Annual General Meeting. Only the actual declaration of dividend and their taxes will be provided on the date of Annual General Meeting.
1.12 Revenue Recognisation and Government Grants :
The revenue are recognized as follws
a) Sale of Manufactured Goods & Sale of Traded Goods : Export Sales in foreign currencies are recognized on prevailing exchange rate on the date of transaction of sales invoice recognized less any export return of goods. The fluctuation of foreign currencies on the date of transaction and the date of actual realization etc. are recognized in the Statement of Profit and Loss under a separate account head. The Excise Duty/IGST payment of exported goods, if any are claimed as rebate after successful export. However there are no amount of Excise Duty/IGST are reflected through Statement of Profit and Loss.
b) Sale of Scrap : As per Ind AS method the Domestic sales recognized on actual sales basis plus collection of Excise Duty/IGST/CGST/SGST. The payment of above Excise Duty/ IGST/ CGST/ SGST again reflected in expense side of Statement of Profit and Loss.
c) Government Grants, subsidies and Export incentives : The Export benefit like Sale of SHIH Licence, Duty Drawback and Export Incentive (Refund of Service Tax) are covered as export subsidies and the same are accounted for in the year of such actually materialized.
1.13 Foreign currency transaction and translations :
The foreign currencies transactions are recognized as follows
a) Initial recognition : Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the balance Sheet date : Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the balance Sheet date are restated at the year-end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these transactions are charged to the Statement of Profit and Loss.
c) Treatment of exchange differences : Exchange differences arising on settlement/restatement of short-term foreign currency monetary assets and liabilities of the Company relates to any transactions are recognized as income or expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium/discount on forward exchange contracts, which are not intended for trading or speculation purposes are amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognized in the Statement of Profit and Loss. In case of MTM (Marked to Market) profit arises of outstanding forward exchange contracts, the same was not to be provided.
1.14 Other Income & Expenditures :
a) Investment Income on actual transaction are recognized on actual basis.
b) Unrealised Gain on Investment Income recognized on the basis of fair market value at the prevailing Balance Sheet date as per implementation of Ind AS.
c) Interest Income are recognized on accrual basis.
d) Other expenses (other than Borrowing Cost and Employees benefits, which shows separately) are recognized on accrual basis.
1.15 Borrowing Cost i.e. Finance Cost:
The accounting for borrowing costs represented as Finance Cost in Statement of profit and Loss and Its include interest, amortization of ancillary cost incurred and exchange differences, if any arises from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
1.16 Employee Benefits :
Employee benefit include employees provident fund, group gratuity fund.
a) Defined contribution plans :
The Companyâs contribution to provident fund are considered as defined contribution plans and the charges as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognised Provident Fund (EPFO) which are fully funded and administered by the Central Government.
b) Defined benefit plans :
For defined benefit plans in the form of Group Gratuity Fund, the cost of providing benefits is determined using the actuarial valuations being carried out at each Balance Sheet date. Actuarial gain and losses are recognized in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognized in the Balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any assets resulting from calculation is limited to past service cost plus the present value of available refunds and reductions in future contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity cash Accumulated Scheme with Life Insurance Corporation of India (LICI) for future payment of Gratuity liability to its employees.
c) Short-term employee benefits :
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the service rendered by employees are recognized during the year when the employees render the service. These benefits includes Leave Encashment benefit of unutilized leave and bonus/exgratia, both are charged to the Statement of Profit and Loss each year on accrual basis. There are no rules in this Company for any carried forward unutilized leave benefits.
Mar 31, 2016
1 CORPORATE INFORMATION
DHP India Limited (''the Company'') is a mid-sized Manufacturing Company of Engineering Goods like Liquefied I Petroleum Gas Regulator (LP Gas Regulator), Accessories and Parts thereof. The Company is ISO 9001 : 2008 I Certified. The Company manufacturers various designs of the LP Gas Regulator, its Parts and Accessories as per I requirement of export markets. As per Section 148 of the Companies Act, 2013 read with Companies (Cost Records I and Audit) Rules, 2014, the product of the Company covered under Non-Regulated Sector, which are as below _I
2 SIGNIFICANT ACCOUNTING POLICIES:
2.1 Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 ("the 2013 Act") as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for the change of depreciation rate as per the useful life on written down method prescribed under Schedule II to the Companies Act, 2013, on going concern.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
2.3 Inventories :
In accordance with the Accounting Standards 2 (AS-2)" Valuation of Inventories" issued by the Institute of Chartered Accountants of India, the valuation of inventories are summarized as follows
a) Stock of Raw Materials (inclusive of various components), Stores, Spares & Consumables are valued at cost on FIFO (First In First Out) basis (excluding the amount of cenvat & state vat credit allowable). A separate ledger for Cenvat & State VAT credit allowable has been maintained for proper utilization of Cenvat & State VAT credit and the same adjusted against the payment of Excise duty & Output CST 8t VAT liability on account of any Sales.
Rebate of excise duty on exported goods, if any realized or receivable has been adjusted against such payment of Excise duty liability on exported goods.
b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & State VAT credit allowable) or net realizable value.
c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross & M.S.S crap are valued at net realizable value.
d) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no change of method of accounting since previous year.
2.4 Cash and Cash equivalents (for purposes of Cash Flow Statement!:
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.
2.5 Cash Flow Statement:
Cash flows are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects 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.__
2.6 Depreciation and amortisation : I
Depreciation on tangible fixed assets have been provided on the written down value method as per the useful Ilife prescribed in Schedule II to the Companies Act, 2013. I
In accordance with the Accounting Standards - 9 (AS-9) "Revenue Recognisation" issued by the Instirute of Charte- Ired Accountants of India, the revenue and expenditures are recognized as follows I
a) Sale of Manufactured Goods : Export Sales in foreign currencies are recognized on the prevailing exchange I rate on the date of transaction of sales invoice recognized less any export return of goods & payment for any I discount etc. related to sales. The fluctuation of foreign currencies on ths date of transaction and the date of I actual realisation etc. are recognized to the Statement of Profit & Loss in a separate Account Head. The Excise I duty payment of exported goods, if any are claimed as rebate after the sucessful export. However there are I no amount of Excise duty on Export Sales are reflected through Statement of Profit & Loss. I
b) Sale of Scrap : Scrap sales are recognized on actual sales basis. The recovery of Excise Duty and State VAT & I CST elements on domestic sales credited to separate ledger and adjusted against its payment. However no I amount of Excise Duty and State VAT & CST are reflected through Statement of Profit & Loss.
c) Income from Other Govt. Grants : Income from Duty Drawback & Export Incentive (Refund of Service Tax) is recognized on cash basis.
2.8 Other Income:
Profit / Loss on fluctuation of Fore rate is recognized on the difference of exchange rate of actual realization/ payment of foreign currencies transaction and the date of transaction of foreign currencies transaction. Interest income is accounted on accrual basis. The other heads of income & expenditure items having a material bearing on the financial statements are recognized on mercantile and accrual basis.
"Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the accounting of fixed Iassets are as follows I
a) Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of I fixed assets includes cost of acquisition, creation cost and other relative expenses but excludes the excise I duty and value added tax, in which the cenvat and vat credit allowable. I
b) Fixed assets acquired and put to use are capitalised and depreciation charged thereon. I
2.10 Foreign currency transactions and translations : IIn accordance with the Accounting Standards -11 (AS-11) "The Effects of Changes in Foreign Exchange Rates" issu- Ied by the Institute of Chartered Accountants of India, the foreign currency transactions are recognized as follows I
a) Initial recognisation : Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the Balance Sheet date: Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year.
Exchange differences arises out of these transaction are charged to the Statement of Profit and Loss.
c) Treatment of exchange differences : Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company related to any transactions are recognized as income or expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monitory items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognized in the Statement of Profit and Loss. In case of MTM (Marked to Market) profit arises of outstanding forward exchange contracts, the same was not to be provided.
2.11 Government grants, subsidies and export incentives :
In accordance with the Accounting Standards -12 (AS-12) "Accounting for Government Grants & Subsidies" issued by the Institute of Chartered Accountants of India, the Export benefits like Sale of SHIH License, Duty Drawback, and Export Incentive (Refund of Service Tax) are covered as export subsidies and the same are accounted for in _the year of such benefits actually materialized.__
2.12 Employee benefits:
Employee benefits include employees provident fund, group gratuity fund.
a) Defined contribution plans
The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognized Provident Fund (EPFO) which are fully funded and administered by the Central Government.
b) Defined benefit plans
For defined benefit plans in the form of group gratuity fund, the cost of providing benefits is determined using with the actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognized in the balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any assets 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. The Company contributes to the Group Gratuity Fund under a Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation of India (LIC) for future payment of gratuity liability to its employees.
c) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits includes leave encashment benefit of unutilized leave and bonus/excreta are charged to Profit & Loss Account on each year on accrual basis. There are no rules for carried forward unutilized leave benefits.
2.13 Borrowing costs :
In accordance with the Accounting Standards -16 (AS-16) "Accounting for Borrowing Costs" issued by the Institute of Chartered Accountants of India, the accounting for borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
2.14 Segment reporting:
In accordance with the Accounting Standards -17 (AS-17) "Segment Reporting" issued by the Institute of Chartered
Accountants of India, the Company has only one primary segment i.e. manufacturing of engineering goods like Liquefied Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The secondary segment of its geographical markets like domestic (within India) and exports (outside India) are reported regularly.
2.15 Earning per share :
In accordance with the Accounting Standards - 20 (AS-20) "Earning Per Share" issued by the Institute of Chartered
Accountants of India, the Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effects to extraordinary items, it any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The company has not issued any shares during the year and no any extraordinary expenses incurred, hence the basic and diluted earnings per shares of before and after extraordinary items are same.
2.16 Taxes on income :
In accordance with the Accounting Standards - 22 (AS-22) "Accounting for Taxes" issued by the Institute of Chartered Accountants of India, the provision for current income tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized.
In accordance with the Accounting Standards - 28 (AS-28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the carrying amount of the fixed assets are reviewed at each Balance Sheet date. If any
An impairment loss is charged to the Statement of Profit and Loss in the year in which the assets is identified as impaired.
2.18 Provisions and contingencies : I
which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their pre- sent value and are determined based on the best estimate 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. I Contingent liabilities are disclosed in the Notes.
In accordance with the Accounting Standards - 30 (AS-30) "Financial Instruments: Recognisation and Measurement" issued by the Institute of Chartered Accountants of India, the company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in AS-30. These forward exchange contracts are stated at fair value of each reporting date. The MTM (marked to market) losses are provided on the Statement of Profit & Loss and the MTM (marked to market) profit, if any are disclosed in the Notes.
2.20 Derivative contracts :
The Company enters into derivative contracts in the nature of forward exchange contracts with an intention to Ihedge its existing assets and liabilities and highly probable transactions. Derivative contracts which are closely Ilinked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions Iand Translations. I
Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as Iper the policy stated for Hedge Accounting. I
The MTM (marked-to market) and losses are recognized in the Statement of Profit and Loss. Gain arising on the Isame are not recognized, until realised, on grounds of prudence. I
2.21 Cenvat & VAT input credit: I
Central excise duty payment elements and Service tax payment elements, both covered and allowable as Cenvat Icredit and State value added tax payment elements allowable as VAT credit are accounted for in the books in the Iperiod in which the underlying service received is accounted and when there is no uncertainty in availing/utilising Ithe Cenvat and VAT credits. I
Dividend payment including tax thereon is appropriated from profits for the year and provisions is made for Iproposed final dividend and tax thereon is subject to consent of the shareholders at the Annual General Meeting. I
Based on the nature of products/activities of the Company and the normal time between acquisition of assets I and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2015
1.1 Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and relevant provisions of the
Companies Act, 2013 ("the 2013 Act") as applicable. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year except for the change of depreciation rate as per the
useful life on written down method prescribed under Schedule II to the
Companies Act, 2013, on going concern.
1.2 Use of Estimates :
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in the
periods in which the results are known / materialise.
1.3 Inventories :
In accordance with the Accounting Standards 2 (AS-2)" Valuation of
Inventories" issued by the Institute of Chartered Accountants of India,
the valuation of inventories are summarised as follows :-
a) Stock of Raw Materials (inclusive of various components), Stores,
Spares & Consumables are valued at cost on FIFO (First In First Out)
basis (excluding the amount of Cenvat & State VAT credit allowable). A
separate ledger for Cenvat & State VAT credit allowable has been
maintained for proper utilisation of Cenvat & State VAT credit and the
same adjusted against the payment of Excise duty & Output CST & VAT
liability on account of any Sales. Rebate of excise duty on exported
goods, if any realised or receivable has been adjusted against such
payment of Excise duty liability on exported goods.
b) Stock of Finished Goods are valued at lower of cost (excluding of
the amount of Cenvat & State VAT credit allowable) or net realisable
value.
c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross & M.
S. Scrap are valued at net realisable value.
d) There is no deviation in method of valuation of stock as prescribed
under section 142A of the Income Tax Act, 1961. Similarly there are no
change of method of accounting since previous year.
1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisitions), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk or changes in value.
1.5 Cash Flow Statement :
Cash flows are reported using the indirect method, where profit before
extraordinary items and tax is adjusted for the effects 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.
1.6 Depreciation and amortisation :
Depreciation on tangible fixed assets have been provided on the written
down value method as per the useful life prescribed in Schedule II to
the Companies Act, 2013. The assets expired their useful life and full
amount of their balance written down value provided as depreciation and
similarly their cost block & depreciation block removed from fixed
assets.
1.7 Revenue Recognisation :
In accordance with the Accounting Standards - 9 (AS-9) "Revenue
Recognisation " issued by the Institute of Chartered Accountants of
India, the revenue and expenditures are recognised as follows:-
a) Sale of Manufactured Goods : Export Sales in foreign currencies are
recognised on the prevailing exchange rate on the date of transaction
of sales invoice recognised less any export return of goods & payment
for any discount etc. related to sales. The fluctuation of foreign
currencies on ths date of transaction and the date of actual
realisation etc. are recognised to the Statement of Profit & Loss in a
separate Account Head. The Excise duty payment of exported goods, if
any are claimed as rebate after the sucessful export. However there are
no amount of Excise duty on Export Sales are reflected through
Statement of Profit & Loss.
b) Sale of Scrap : Scrap sales are recognised on actual sales basis.
The recovery of Excise Duty and State VAT & CST elements on domestic
sales credited to separate ledger and adjusted against its payment.
However no amount of Excise Duty and State VAT & CST are reflected
through Statement of Profit & Loss.
c) Income from Other Sales : Income from Sale of SHIS Licence is
recognised on cash basis.
d) Income from Other Govt. Grants : Income from Duty Drawback & Export
Incentive (Refund of Service Tax) is recognised on cash basis.
1.8 Other Income :
Profit / Loss on fluctuation of Forex rate is recognised on the
difference of exchange rate of actual realisation/ payment of foreign
currencies transaction and the date of transaction of foreign
currencies. Interest income is accounted on accrual basis. The other
heads of income & expenditure items having a material bearing on the
financial statements are recognised on mercantile and accrual basis.
1.9 Tangible Fixed Assets :
The entire Company's Fixed assets are Tangible assets. In accordance
with the Accounting Standards- 10 (AS-10) "Accounting for Fixed Assets"
issued by the Institute of Chartered Accountants of India, the
accounting of fixed assets are as follows :-
a) Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes cost of
acquisition, creation cost and other relative expenses but excludes the
excise duty and value added tax, in which the cenvat and vat credit
allowable.
b) Fixed assets acquired and put to use are capitalised and
depreciation charged thereon.
c) Fixed assets retire from active use and impaired and expired their
useful life as prescribed as per Schedule II to the Companies Act,
2013, are disposed off.
1.10 Foreign currency transactions and translations :
In accordance with the Accounting Standards-11 (AS-11) "The Effects of
Changes in Foreign Exchange Rates" issued by the Institute of Chartered
Accountants of India, the foreign currency transactions are recognised
as follows :-
a) Initial recognisation : Transaction in foreign currencies entered
into by the Company are accounted at the exchange rates prevailing on
the date of the transaction or at the rates that closely approximate
the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the Balance Sheet
date : Foreign currency monetary items (other than derivative
contracts) of the Company outstanding at the Balance Sheet date are
restated at the year-end rates. Revenue and expenses are translated at
the average exchange rates prevailing during the year. Exchange
differences arises out of these transaction are charged to the
Statement of Profit and Loss.
c) Treatment of exchange differences : Exchange differences arising on
settlement / restatement of short-term foreign currency monetary assets
and liabilities of the Company related to any transactions are
recognised as income or expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium / discount on forward
exchange contracts, which are not intended for trading or speculation
purposes, are amortised over the period of the contracts if such
contracts relate to monetary items as at the Balance Sheet date. The
MTM (Marked to Market) losses of outstanding forward exchange contracts
are recognised in the Statement of Profit and Loss. In case of MTM
(Marked to Market) profit arises of outstanding forward exchange
contracts, the same was not to be provided.
1.11 Government grants, subsidies and export incentives :
In accordance with the Accounting Standards -12 (AS-12) "Accounting for
Government Grants & Subsidies" issued by the Institute of Chartered
Accountants of India, the Export benefits like Sale of SHIS Licence,
Duty Drawback and Export Incentive (Refund of Service Tax) are covered
as export subsidies and the same are accounted for in the year of such
benefits actually materialised.
1.12 Employee benefits :
Employee benefits include employees provident fund, group gratuity
fund.
a) Defined contribution plans
The Company's contribution to provident fund are considered as defined
contribution plans and are charged as an expenses as they fall due
based on the amount of contribution required to be made. The Company
makes regular contribution to Recognised Provident Fund (EPFO) which
are fully funded and administered by the Central Government.
b) Defined benefit plans
For defined benefit plans in the form of group gratuity fund, the cost
of providing benefits is determined using with the actuarial valuations
being carried out at each Balance Sheet date. Actuarial gains and losses
are recognised in the Statement of Profit and Loss in the period in
which they occur. The retirement benefit obligation recognised in the
balance Sheet represents the present value of defined benefit obligation
as adjusted for unrecognised past service cost, as reduced by the fair
value of scheme assets. Any assets 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. The
Company contributes to the Group Gratuity Fund under a Group Gratuity
Cash Accumulated Scheme with Life Insurance Corporation of India (LIC)
for future payment of gratuity liability to its employees.
c) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
includes leave encashment benefit of unutilised leave and
bonus/exgratia are charged to Profit & Loss Account on each year on
accrual basis. There are no rules for carried forward unutilised leave
benefits.
1.13 Borrowing costs :
In accordance with the Accounting Standards - 16 (AS - 16) "Accounting
for Borrowing Costs" issued by the Institute of Chartered Accountants
of India, the accounting for borrowing costs include interest,
amortisation of ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
1.14 Segment reporting :
In accordance with the Accounting Standards - 17 (AS - 17) "Segment
Reporting" issued by the Institute of Chartered Accountants of India,
the Company has only one primary segment i.e. manufacturing of
engineering goods like Liquified Petroleum Gas Regulator (LP Gas
Regulator), accessories and parts thereof. The secondary segment of its
geographical markets like domestic (within India) and exports (outside
India) are reported regularly.
1.15 Earning per share :
In accordance with the Accounting Standards - 20 (AS-20) "Earning Per
Share" issued by the Institute of Chartered Accountants of India, the
Basic earning per share is computed by dividing the profit / (loss)
after tax (including the post tax effects of extraordinary items, it
any) by the weighted average number of equity shares outstanding during
the year. Diluted earning per share is computed by dividing the profit
/ (loss) after tax (including the post tax effects of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive poential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on conversion of all dilutive
potential equity shares. The company has not issued any shares during
the year and no any extraordinary expenses incurred, hence the basic
and diluted earning per shares of before and after extraordinary items
are same.
1.16 Taxes on income :
In accordance with the Accounting Standards - 22 (AS-22) "Accounting
for Taxes" issued by the Institute of Chartered Accountants of India,
the provision for current income tax is the amount of tax payable on
the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961. Deferred Tax is recognised on
timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable
of reversal in one or more subsequent periods. Deferred tax is measured
using the tax rates and the tax laws enacted or substantially enacted
as at the reporting date. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised.
1.17 Impairment of assets :
In accordance with the Accounting Standards - 28 (AS-28) "Impairment of
Assets" issued by the Institute of Chartered Accountants of India, the
carrying amount of the fixed assets are reviewed at each Balance Sheet
date. If any indication of impairment exists, the recoverable amount of
such assets is estimated and impairment is recognised. An impairment
loss is charged to the Statement of Profit and Loss in the year in which
the assets is identified as impaired.
1.18 Provisions and contingencies :
In accordance with the Accounting Standards - 29 (AS-29) "Provisions
and contingencies" issued by the Institute of Chartered Accountants of
India, a provision is recognised when the Company has a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are
determined based on the best estimate 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. Contingent
liabilities are disclosed in the Notes.
1.19 Hedge accounting :
In accordance with the Accounting Standards - 30 (AS-30) "Financial
Instruments: Recognisation and Measurement" issued by the Institute of
Chartered Accountants of India, the company used foreign currency
forward contracts to hedge its risks associated with foreign currency
fluctuations relating to highly probable forecast transactions. The
Company designates such forward exchange contracts in a cash flow
hedging relationship by applying the hedge accounting principles set
out in AS-30. These forward exchange contracts are stated at fair value
of each reporting date. The MTM (marked to market) losses are provided
on the Statement of Profit & Loss and the MTM (marked to market)
profit, if any are disclosed in the Notes.
1.20 Derivative contracts :
The Company enters into derivative contracts in the nature of forward
exchange contracts with an intention to hedge its existing assets and
liabilities and highly probable transactions. Derivative contracts
which are closely linked to the existing assets and liabilities are
accounted as per the policy stated for Foreign Currency Transactions
and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting.
The MTM (marked-to market) and losses are recognised in the Statement
of Profit and Loss. Gain arising on the same are not recognised, until
realised, on grounds of prudence.
1.21 Cenvat & VAT input credit :
Central excise duty payment elements and Service tax payment elements,
both covered and allowable as Cenvat credit and State value added tax
payment elements allowable as VAT credit are accounted for in the books
in the period in which the underlying service received is accounted and
when there is no uncertainty in availing/utilising the Cenvat and VAT
credits.
1.22 Dividend :
Dividend payment including tax thereon is appropriated from profits for
the year and provisions is made for proposed final dividend and tax
thereon is subject to consent of the shareholders at the Annual General
Meeting.
1.23 Operating Cycle :
Based on the nature of products/activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non- current.
Mar 31, 2014
1.1 Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (As Amended) under
section 211(3C) (which continue to be applicable in respect of Section
133 of the Companies Act, 2013 in terms of General circular 15/2013
dated September 13, 2013 of the Ministry of Corporate Affairs) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year on going concern.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in the
periods in which the results are known / materialise.
2.3 Inventories :
In accordance with the Accounting Standards 2 (AS-2)" Valuation of
Inventories" issued by the Institute of Chartered Accountants of India,
the valuation of inventories are summarised as follows :- a) Stock of
Raw Materials (inclusive of various components), Stores, Spares &
Consumables are valued at cost on FIFO (First In First Out) basis
(excluding the amount of cenvat & state vat credit allowable). A
separate ledger for Cenvat & State VAT credit allowable has been
maintained for proper utilisation of Cenvat & State VAT credit and the
same adjusted against the payment of Excise duty & Output CST & VAT
liability on account of any Sales. Rebate of excise duty on exported
goods, if any realised or receivable has been adjusted against such
payment of Excise duty liability on exported goods.
b) Stock of Finished Goods are valued at lower of cost (excluding of
the amount of Cenvat & State VAT credit allowable) or net realisable
value.
c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross &
M.S.Scrap are valued at net realisable value.
d) There is no deviation in method of valuation of stock as prescribed
under section 142A of the Income Tax Act, 1961. Similarly there are no
change of method of accounting since previous year.
2.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisitions), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk or changes in value.
2.5 Cash Flow Statement :
Cash flows are reported using the indirect method, where profit before
extraordinary items and tax is adjusted for the effects 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.
2.6 Depreciation and amortisation :
Depreciation has been provided on written down value method as per
rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata
basis except the following situation :-
a) Assets costing less than ^ 5,000 each are fully depreciated in the
year of capitalisation.
b) When, the net written down value of the assets is less than 5 % of
its original costs, then each are fully depreciated in the year end.
2.7 Revenue Recognisation :
In accordance with the Accounting Standards - 9 (AS-9) "Revenue
Recognisation" issued by the Institute of Chartered Accountants of
India, the revenue and expenditures are recognised as follows :-
a) Sale of Manufactured Goods : Export Sales in foreign currencies are
recognised on the prevailing exchange rate on the date of transaction
of sales invoice recognised less any export return of goods & payment
for any discount etc. related to sales. The fluctuation of foreign
currencies on the date of transaction and the date of actual
realisation etc. are recognised to the Statement of Profit & Loss in a
separate Account Head. The Excise duty payment of exported goods, if
any are claimed as rebate after the successful export. However, there
are no amount of Excise duty on Export Sales are reflected through
Statement of Profit & Loss.
b) Sale of Traded Goods : Export Sales in foreign currencies are
recognised on the prevailing exchange rate on the date of transaction
of sales invoice recognised.
c) Sale of Scrap : Scrap sales are recognised on actual sales basis.
The recovery of Excise Duty and State VAT & CST elements on domestic
sales credited to separate ledger and adjusted against its payment.
However no amount of Excise Duty and State VAT & CST are reflected
through Statement of Profit & Loss.
d) Income from Other Sales : Income from Sale of SHIS Licence & Duty
Entitlement Pass Book (DEPB) is recognised on cash basis.
e) Income from Other Govt. Grants : Income from Duty Drawback & Export
Incentive (Refund of Service Tax) is recognised on cash basis.
2.8 Other Income :
Profit/Loss on fluctuation of Forex rate is recognised on the
difference of exchange rate of actual realisation/payment of foreign
currencies transaction and the date of transaction of foreign currecies
transaction. Interest income is accounted on accrual basis. The other
heads of income & expenditure items having a material bearing on the
financial statements are recognised on mercantile and accrual basis.
2.9 Tangible Fixed Assets :
The entire Company''s Fixed assets are Tangible assets. In accordance
with the Accounting Standards - 10 (AS-10) "Accounting for Fixed
Assets" issued by the Institute of Chartered Accountants of India, the
accounting of fixed assets are as follows :- a) Fixed assets are
carried at cost less accumulated depreciation and impairment losses, if
any. The cost of fixed assets includes cost of acquisition, creation
cost and other relative expenses but excludes the excise duty and value
added tax, in which the cenvat and vat credit allowable.
b) Fixed assets acquired and put to use are capitalised and
depreciation charged thereon.
c) Fixed assets retire from active use and impaired are disposed off.
2.10 Foreign currency transactions and translations :
In accordance with the Accounting Standards - 11 (AS-11) "The Effects
of Changes in Foreign Exchange Rates" issued by the Institute of
Chartered Accountants of India, the foreign currency transactions are
recognised as follows :- a) Initial recognisation : Transaction in
foreign currencies entered into by the Company are accounted at the
exchange rates prevailing on the date of the transaction or at the
rates that closely approximate the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the Balance Sheet
date: Foreign currency monetary items (other than derivative contracts)
of the Company outstanding at the Balance Sheet date are restated at
the year-end rates. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arises
out of these transaction are charged to the Statement of Profit and
Loss.
c) Treatment of exchange differences : Exchange differences arising on
settlement / restatement of short-term foreign currency monetary assets
and liabilities of the Company related to any transactions are
recognised as income or expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium / discount on forward
exchange contracts, which are not intended for trading or speculation
purposes, are amortised over the period of the contracts if such
contracts relate to moneytory items as at the Balance Sheet date. The
MTM (Marked to Market) losses of outstanding forward exchange contracts
are recognised in the Statement of Profit and Loss. In case of MTM
(Marked to Market) profit arises of outstanding forward exchange
contracts, the same was not to be provided.
2.11 Government grants, subsidies and export incentives :
In accordance with the Accounting Standards - 12 (AS-12) "Accounting
for Government Grants & Subsidies" issued by the Institute of Chartered
Accountants of India, the Export benefits like Sale of SHIH Licence,
Duty Drawback, Export Incentive (Refund of Service Tax) & Duty
Entitlement Pass Book (DEPB) are covered as export subsidies and the
same are accounted for in the year of such benefits actually
materialised.
2.12 Employee benefits :
Employee benefits include employees provident fund, group gratuity
fund.
a) Defined contribution plans
The Company''s contribution to provident fund are considered as defined
contribution plans and are charged as an expenses as they fall due
based on the amount of contribution required to be made. The Company
makes regular contribution to Recognised Provident Fund (EPFO) which
are fully funded and administered by the Central Government.
b) Defined benefit plans
For defined benefit plans in the form of group gratuity fund, the cost
of providing benefits is determined using with the actuarial valuations
being carried out at each Balance Sheet date. Actuarial gains and
losses are recognised in the Statement of Profit and Loss in the period
in which they occur. The retirement benefit obligation recognised in
the balance Sheet represents the present value of defined benefit
obligation as adjusted for unrecognised past service cost, as reduced
by the fair value of scheme assets. Any assets 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. The Company contributes to the Group Gratuity Fund under a
Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation
of India (LIC) for future payment of gratuity liability to its
employees.
c) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
includes leave encashment benefit of unutilised leave and bonus/
exgratia are charged to Profit & Loss Account on each year on accrual
basis. There are no rules for carried forward unutilised leave
benefits.
2.13 Borrowing costs :
In accordance with the Accounting Standards - 16 (AS-16) "Accounting
for Borrowing Costs" issued by the Institute of Chartered Accountants
of India, the accounting for borrowing costs include interest,
amortisation of ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
2.14 Segment reporting :
In accordance with the Accounting Standards - 17 (AS-17) "Segment
Reporting" issued by the Institute of Chartered Accountants of India,
the Company has only one primary segment i.e. manufacturing of
engineering goods like Liquified Petroleum Gas Regulator (LP Gas
Regulator), accessories and parts thereof. The secondary segment of its
geographical markets like domestic (within India) and exports (outside
India) are reported regularly.
2.15 Earning per share :
In accordance with the Accounting Standards - 20 (AS-20) "Earning Per
Share" issued by the Institute of Chartered Accountants of India, the
Basic earning per share is computed by dividing the profit / (loss)
after tax (including the post tax effects of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earning per share is computed by dividing the profit
/ (loss) after tax (including the post tax effects of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on conversion of all dilutive
potential equity shares. The company has not issued any shares during
the year and no any extraordinary expenses incurred, hence the basic
and diluted earning per shares of before and after extraordinary items
are same.
2.16 Taxes on income :
In accordance with the Accounting Standards - 22 (AS-22) "Accounting
for Taxes" issued by the Institute of Chartered Accountants of India,
the provision for current income tax is the amount of tax payable on
the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961. Deferred Tax is recognised on
timing differences, being the differences between
the taxable income and the accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantially enacted as at the reporting date. Deferred tax assets
are recognised for timing differences of other items only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised.
2.17 Impairment of assets :
In accordance with the Accounting Standards - 28 (AS-28) "Impairment of
Assets" issued by the Institute of Chartered Accountants of India, the
carrying amount of the fixed assets are reviewed at each Balance Sheet
date. If any indication of impairment exists, the recoverable amount of
such assets is estimated and impairment is recognised. An impairment
loss is charged to the Statement of Profit and Loss in the year in
which the assets is identified as impaired.
2.18 Provisions and contingencies :
In accordance with the Accounting Standards - 29 (AS-29) "Provisions
and contingencies" issued by the Institute of Chartered Accountants of
India, a provision is recognised when the Company has a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are
determined based on the best estimate 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. Contingent
liabilities are disclosed in the Notes.
2.19 Hedge accounting :
In accordance with the Accounting Standards - 30 (AS-30) "Financial
Instruments: Recognisation and Measurement" issued by the Institute of
Chartered Accountants of India, the company used foreign currency
forward contracts to hedge its risks associated with foreign currency
fluctuations relating to highly probable forecast transactions. The
Company designates such forward exchange contracts in a cash flow
hedging relationship by applying the hedge accounting principles set
out in AS-30. These forward exchange contracts are stated at fair value
of each reporting date. The MTM (marked to market) losses are provided
on the Statement of Profit & Loss and the MTM (marked to market)
profit, if any are disclosed in the Notes.
2.20 Derivative contracts :
The Company enters into derivative contracts in the nature of forward
exchange contracts with an intention to hedge its existing assets and
liabilities and highly probable transactions. Derivative contracts
which are closely linked to the existing assets and liabilities are
accounted as per the policy stated for Foreign Currency Transactions
and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting.
The MTM (marked-to market) and losses are recognised in the Statement
of Profit and Loss. Gain arising on the same are not recognised, until
realised, on grounds of prudence.
2.21 Cenvat & VAT input credit :
Central excise duty payment elements and Service tax payment elements,
both covered and allowable as Cenvat credit and State value added tax
payment elements allowable as VAT credit are accounted for in the books
in the period in which the underlying service received is accounted and
when there is no uncertainty in availing/utilising the Cenvat and VAT
credits.
Mar 31, 2013
1.1 Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (As Amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year on going concern.
1.2 Use of Estimates :
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in the
periods in which the results are known / materialise.
1.3 Inventories :
In accordance with the Accounting Standards 2 (AS-2)Â Valuation of
Inventories issued by the Institute of Chartered Accountants of India,
the valuation of inventories are summarised as follows :- a) Stock of
Raw Materials (inclusive of various components), Stores, Spares &
Consumables are valued at cost on FIFO (First In First Out) basis
(excluding the amount of cenvat & state vat credit allowable). A
separate ledger for Cenvat & State VAT credit allowable has been
maintained for proper utilisation of Cenvat & State VAT credit and the
same adjusted against the payment of Excise duty & Output CST & VAT
liability on account of any Sales. Rebate of excise duty on exported
goods, if any realised or receivable has been adjusted against such
payment of Excise duty liability on exported goods.
b) Stock of Finished Goods are valued at lower of cost (excluding of
the amount of Cenvat & State VAT credit allowable) or net realisable
value.
c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross &
M.S.Scrap are valued at net realisable value.
d) There is no deviation in method of valuation of stock as prescribed
under section 142A of the Income Tax Act, 1961. Similarly there are no
change of method of accounting since previous year.
1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisitions), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk or changes in value.
1.5 Cash Flow Statement :
Cash flows are reported using the indirect method, where profit before
extraordinary items and tax is adjusted for the effects 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.
1.6 Depreciation and amortisation :
Depreciation has been provided on written down value method as per
rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata
basis except the following situation :-
a) Assets costing less than Rs. 5,000 each are fully depreciated in the
year of capitalisation.
b) When, the net written down value of the assets is less than 5 % of
its original costs, then each are fully depreciated in the year end.
1.7 Revenue Recognisation :
In accordance with the Accounting Standards - 9 (AS-9) ''Revenue
Recognisation issued by the Institute of Chartered Accountants of
India, the revenue and expenditures are recognised as follows :-
a) Sale of Manufactured Goods : Export Sales in foreign currencies are
recognised on the prevailing exchange rate on the date of transaction
of sales invoice recognised less any export return of goods & payment
for any discount etc. related to sales. The fluctuation of foreign
currencies on the date of transaction and the date of actual
realisation etc. are recognised to the Statement of Profit & Loss in a
separate Account Head. The Excise duty payment of exported goods, if
any are claimed as rebate after the successful export. However, there
are no amount of Excise duty on Export Sales are reflected through
Statement of Profit & Loss.
b) Sale of Scrap : Scrap sales are recognised on actual sales basis.
The recovery of Excise Duty and State VAT & CST elements on domestic
sales credited to separate ledger and adjusted against its payment.
However no amount of Excise Duty and State VAT & CST are reflected
through Statement of Profit & Loss.
c) Income from Other Sales : Income from Sale of Duty Entitlement Pass
Book (DEPB) is recognised on cash basis.
1.8 Other Income :
Interest income is accounted on accrual basis. The other heads of
income & expenditure items having a material bearing on the financial
statements are recognised on mercantile and accrual basis.
1.9 Tangible Fixed Assets :
The entire Company''s Fixed assets are Tangible assets. In accordance
with the Accounting Standards - 10 (AS-10) ''Accounting for Fixed
Assets issued by the Institute of Chartered Accountants of India, the
accounting of fixed assets are as follows :- a) Fixed assets are
carried at cost less accumulated depreciation and impairment losses, if
any. The cost of fixed assets includes cost of acquisition, creation
cost and other relative expenses but excludes the excise duty and value
added tax, in which the cenvat and vat credit allowable.
b) Fixed assets acquired and put to use are capitalised and
depreciation charged thereon.
c) Fixed assets retire from active use and impaired are disposed off.
1.10 Foreign currency transactions and translations :
In accordance with the Accounting Standards - 11 (AS-11) ''The Effects
of Changes in Foreign Exchange Rates issued by the Institute of
Chartered Accountants of India, the foreign currency transactions are
recognised as follows :- a) Initial recognisation : Transaction in
foreign currencies entered into by the Company are accounted at the
exchange rates prevailing on the date of the transaction or at the
rates that closely approximate the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the Balance Sheet
date: Foreign currency monetary items (other than derivative contracts)
of the Company outstanding at the Balance Sheet date are restated at
the year-end rates. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arises
out of these transaction are charged to the Statement of Profit and
Loss.
c) Treatment of exchange differences : Exchange differences arising on
settlement / restatement of short-term foreign currency monetary assets
and liabilities of the Company related to any transactions are
recognised as income or expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium / discount on forward
exchange contracts, which are not intended for trading or speculation
purposes, are amortised over the period of the contracts if such
contracts relate to moneytory items as at the Balance Sheet date. The
MTM (Marked to Market) losses of outstanding forward exchange contracts
are recognised in the Statement of Profit and Loss. In case of MTM
(Marked to Market) profit arises of outstanding forward exchange
contracts, the same was not to be provided.
1.11 Government grants, subsidies and export incentives :
In accordance with the Accounting Standards - 12 (AS-12) ''Accounting
for Government Grants & Subsidies issued by the Institute of Chartered
Accountants of India, the Export benefits like Duty Entitlement Pass
Book (DEPB) are covered as export subsidies and the same are accounted
for in the year of such benefits actually materialised.
1.12 Employee benefits :
Employee benefits include employees provident fund, group gratuity
fund.
a) Defined contribution plans
The Company''s contribution to provident fund are considered as defined
contribution plans and are charged as an expenses as they fall due
based on the amount of contribution required to be made. The Company
makes regular contribution to Recognised Provident Fund (EPFO) which
are fully funded and administered by the Central Government.
b) Defined benefit plans
For defined benefit plans in the form of group gratuity fund, the cost
of providing benefits is determined using with the actuarial valuations
being carried out at each Balance Sheet date. Actuarial gains and
losses are recognised in the Statement of Profit and Loss in the period
in which they occur. The retirement benefit obligation recognised in
the balance Sheet represents the present value of defined benefit
obligation as adjusted for unrecognised past service cost, as reduced
by the fair value of scheme assets. Any assets 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. The Company contributes to the Group Gratuity Fund under a
Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation
of India (LIC) for future payment of gratuity liability to its
employees.
c) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
includes leave encashment benefit of unutilised leave and bonus/
exgratia are charged to Profit & Loss Account on each year on accrual
basis. There are no rules for carried forward unutilised leave
benefits.
1.13 Borrowing costs :
In accordance with the Accounting Standards - 16 (AS-16) ''Accounting
for Borrowing Costs issued by the Institute of Chartered Accountants
of India, the accounting for borrowing costs include interest,
amortisation of ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
1.14 Segment reporting :
In accordance with the Accounting Standards - 17 (AS-17) ''Segment
Reporting issued by the Institute of Chartered Accountants of India,
the Company has only one primary segment i.e. manufacturing of
engineering goods like Liquified Petroleum Gas Regulator (LP Gas
Regulator), accessories and parts thereof. The secondary segment of its
geographical markets like domestic (within India) and exports (outside
India) are reported regularly.
1.15 Earning per share :
In accordance with the Accounting Standards - 20 (AS-20) ''Earning Per
Share issued by the Institute of Chartered Accountants of India, the
Basic earning per share is computed by dividing the profit / (loss)
after tax (including the post tax effects of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earning per share is computed by dividing the profit
/ (loss) after tax (including the post tax effects of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive poential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on conversion of all dilutive
potential equity shares. The company has not issued any shares during
the year and no any extraordinary expenses incurred, hence the basic
and diluted earning per shares of before and after extraordinary items
are same.
1.16 Taxes on income :
In accordance with the Accounting Standards - 22 (AS-22) ''Accounting
for Taxes issued by the Institute of Chartered Accountants of India,
the provision for current income tax is the amount of tax payable on
the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961. Deferred Tax is recognised on
timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable
of reversal in one or more subsequent periods. Dererred tax is measured
using the tax rates and the tax laws enacted or substantially enacted
as at the reporting date. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised.
1.17 Impairment of assets :
In accordance with the Accounting Standards - 28 (AS-28) ''Impairment of
Assets issued by the Institute of Chartered Accountants of India, the
carrying amount of the fixed assets are reviewed at each Balance Sheet
date. If any indication of impairment exists, the recoverable amount of
such assets is estimated and impairment is recognised. An impairment
loss is charged to the Statement of Profit and Loss in the year in
which the assets is identified as impaired.
1.18 Provisions and contingencies :
In accordance with the Accounting Standards - 29 (AS-29) ''Provisions
and contingencies issued by the Institute of Chartered Accountants of
India, a provision is recognised when the Company has a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are
determined based on the best estimate 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. Contingent
liabilities are disclosed in the Notes.
1.19 Hedge accounting :
In accordance with the Accounting Standards - 30 (AS-30) ''Financial
Instruments: Recognisation and Measurement issued by the Institute of
Chartered Accountants of India, the company used foreign currency
forward contracts to hedge its risks associated with foreign currency
fluctuations relating to highly probable forecast transactions. The
Company designates such forward exchange contracts in a cash flow
hedging relationship by applying the hedge accounting principles set
out in AS-30. These forward exchange contracts are stated at fair value
of each reporting date. The MTM (marked to market) losses are provided
on the Statement of Profit & Loss and the MTM (marked to market)
profit, if any are disclosed in the Notes.
1.20 Derivative contracts :
The Company enters into derivative contracts in the nature of forward
exchange contracts with an intention to hedge its existing assets and
liabilities and highly probable transactions. Derivative contracts
which are closely linked to the existing assets and liabilities are
accounted as per the policy stated for Foreign Currency Transactions
and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting.
The MTM (marked-to market) and losses are recognised in the Statement
of Profit and Loss. Gain arising on the same are not recognised, until
realised, on grounds of prudence.
1.21 Cenvat & VAT input credit :
Central excise duty payment elements and Service tax payment elements,
both covered and allowable as Cenvat credit and State value added tax
payment elements allowable as VAT credit are accounted for in the books
in the period in which the underlying service received is accounted and
when there is no uncertainty in availing/utilising the Cenvat and VAT
credits.
Mar 31, 2012
1.1 Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (As Amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year on going concern.
1.2 Use of Estimates :
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in the
periods in which the results are known / materialise.
1.3 Inventories:
In accordance with the Accounting Standards 2 (AS-2) "Valuation of
Inventories" issued by the Institute of Chartered Accountants of
India, the valuation of inventories are summarised as follows :-
a) Stock of Raw Materials (inclusive of various components), Stores,
Spares & Consumables, Work-in-process of Zinc Alloys are valued at cost
on FIFO (First In First Out) basis (excluding the amount of Cenvat &
state VAT credit allowable). A separate ledger for Cenvat & state VAT
credit allowable has been maintained for proper utilisation of Cenvat &
state VAT credit and the same adjusted against the payment of Excise
duty & Output vat liability on account of any Sales. Rebate of excise
duty on exported goods, if any realised or receivable has been adjusted
against such payment of Excise duty liability on exported goods.
b) Stock of Finished Goods are valued at lower of cost (excluding of
the amount of Cenvat & state VAT credit allowable) or net realisable
value.
c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash are valued
at net realisable value,
d) Goods-in-transit of purchase of raw materials & capital goods are
valued at cost as above (a).
e) There is no deviation in method of valuation of stock as prescribed
under section 142A of the Income Tax Act, 1961. Similarly there are no
change of method of accounting since previous year.
1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement):
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisitions), highly liquid
investments, that are readily convertible into known amounts of cash
and which are subject to insignificant risk or changes in value.
1.5 Cash Flow Statement:
Cash flows are reported using the indirect method, where profit before
extraordinary items and tax is adjusted for the effects 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.
1.6 Depreciation and amortisation :
Depreciation has been provided on written down value method as per
rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata
basis except the following situation
a) Assets costing less than Rs 5,000 each are fully depreciated in the
year of capitalisation.
b) When , the net written down value of the assets is less than 5 % of
its original costs, then each are fully depreciated in the year end.
1.7 Revenue Recognisation :
In accordance with the Accounting Standards - 9 (AS-9) "Revenue
Recognisation" issued by the Institute of Chartered Accountants of
India, the revenue and expenditures are recognised as follows
a) Sale of Manufactured Goods : Export Sales in foreign currencies are
recognised, net of returns, free samples & free replacements and
inclusive of premium or discount on their forward exchange contracts
materialised, if any. The entire amount of export sales has been
realised in India as per prevailing exchange rate.
b) Sale of Scrap : Scrap sales are recognised inclusive of excise duty
but exclude the sales tax and Value Added Tax. The recovery of sales
tax and Value Added Tax elements on domestic sales credited to separate
ledger and adjusted against its payment. However no amount of sales tax
and Value Added Tax on domestic sales are reflected through profit &
Loss Account.
c) Income from Other Sales: Income from Sale of Duty Entitlement Pass
Book (DEPB) is recognised on cash basis.
1.8 Other Income:
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established. The other
heads of income & expenditure items having a material bearing on the
financial statements are recognised on mercantile and accrual basis.
1.9 Tangible Fixed Assets :
The entire Company's Fixed assets are Tangible assets. In accordance
with the Accounting Standards -10 (AS-10) "Accounting for Fixed
Assets" issued by the Institute of Chartered Accountants of India,
the accounting of fixed assets are as follows
a) Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes cost of
acquisition, creation cost and other relative expenses but excludes the
excise duty and Value Added Tax, in which the Cenvat and VAT credit
allowable.
b) Fixed assets acquired and put to use are capitalised and
depreciation charged thereon.
c) Fixed assets retire from active use and impaired are disposed off.
d) Projects under which assets are not ready for their intend use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
1.10 Foreign currency transactions and translations :
In accordance with the Accounting Standards - 11 (AS-11) "The Effects
of Changes in Foreign Exchange Rates" issued by the Institute of
Chartered Accountants of India, the foreign currency transactions are
recognised as follows :-
a) Initial recognisation: Transaction in foreign currencies entered
into by the Company are accounted at the exchange rates prevailing on
the date of the transaction or at the rates that closely approximate
the rate at the date of transaction.
b) Measurement of foreign currency monetary items at the Balance Sheet
date: Foreign currency monetary items (other than derivative contracts)
of the Company outstanding at the Balance Sheet date are restated at
the year end rates. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arises
out of these transaction are charged to the Statement of Profit and
Loss.
c) Treatment of exchange differences: Exchange differences arising on
settlement / restatement of short-term foreign currency monetary assets
and liabilities of the Company related to current year transactions are
recognised as income or expense in the Statement of Profit and Loss
under the same head of accounts. The exchange difference arising on
settlement / restatement of long-term foreign monetry items and related
to earlier year items are recognised as a separate head of income or
expense in the Statement of Profit and Loss.
d) Accounting of forward contracts : Premium / discount on forward
exchange contracts, which are not intended for trading or speculation
purposes, are amortised over the period of the contracts if such
contracts relate to monetry items as at the Balance Sheet date. The MTM
(Marked to Market) losses of outstanding forward exchange contracts are
recognised in the Statement of Profit and Loss Account. In case of MTM
(Marked to Market) profit arises of outstanding toward exchange
contracts, the same was not to be provided.
1.11 Government grants, subsidies and export incentives :
In accordance with the Accounting Standards -12 (AS-12) "Accounting
for Government Grants & Subsidies" issued by the Institute of
Chartered Accountants of India, the Export benefits like Duty
Entitlement Pass Book (DEPB) are covered as export subsidies and the
same are accounted for in the year of such benefits actually
materialised.
1.12 Employee benefits :
Employee benefits include employees provident fund, group gratuity
fund.
a) Defined contribution plans
The Company's contribution to provident fund are considered as defined
contribution plans and are charged as an expenses as they fall due
based on the amount of contribution required to be made. The Company
makes regular contribution to Recognised Provident Fund (EPFO) which
are fully funded and administered by the Central Government.
b) Defined benefit plans
For defined benefit plans in the form of group gratuity fund, the cost
of providing benefits is determined using with the actuarial valuations
being carried out at each Balance Sheet date. Actuarial gains and
losses are recognised in the Statement of Profit and Loss in the period
in which they occur. The retirement benefit obligation recognised in
the balance Sheet represents the present value of defined benefit
obligation as adjusted for unrecognised past service cost, as reduced
by the fair value of scheme assets. Any assets 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. The Company contributes to the Group Gratuity Fund under a
Group Gratuity Cash Accumulated Scheme with Life insurance Corporation
of India (LIC) for future payment of gratuity liability to its
employees.
c) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
includes leave encashment benefit of unutilised leave and
bonus/exgratia are charged to Profit & Loss Account on each year on
accrual basis. There are no rules for carried forward unutilised leave
benefits.
1.13 Borrowing costs:
In accordance with the Accounting Standards -16 (AS-16) "Accounting
for Borrowing Costs" issued by the Institute of Chartered Accountants
of India, the accounting for borrowing costs include interest,
amortisation of ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
1.14 Segment reporting:
In accordance with the Accounting Standards -17 (AS-17) "Segment
Reporting" issued by the Institute of Chartered Accountants of India,
the Company has only one primary segment i.e. manufacturing of
engineering goods like Liquified Petroleum Gas Regulator (LP Gas
Regulator), accessories and parts thereof. The secondary segment of its
geographical markets like domestic (within India) and exports (outside
India) are reported regularly.
1.15 Earning per share :
In accordance with the Accounting Standards - 20 (AS-20) "Earning Per
Share" issued by the Institute of Chartered Accountants of India, the
Basic earning per share is computed by dividing the profit / (loss)
after tax (including the post tax effects of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earning per share is computed by dividing the profit
/ (loss) after tax (including the post tax effects of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on conversion of all dilutive
potential equity shares. The company has not issued any shares during
the year and no any extraordinary expenses incurred, hence the basic
and diluted earning per shares of before and after extraordinary items
are same.
1.16 Taxes on income :
In accordance with the Accounting Standards - 22 (AS-22) "Accounting
for Taxes" issued by the Institute of Chartered Accountants of India,
the provision for current income tax is the amount of tax payable on
the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961. Deferred Tax is recognised on
timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable
of reversal in one or more subsequent periods. Deferred tax is measured
using the tax rates and the tax laws enacted or substantially enacted
as at the reporting date. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised.
1.17 Impairment of assets :
In accordance with the Accounting Standards - 28 (AS-28) "Impairment
of Assets" issued by the Institute of Chartered Accountants of India,
the carrying amount of the fixed assets are reviewed at each Balance
Sheet date. If any indication of impairment exists, the recoverable
amount of such assets is estimated and impairment is recognised. An
impairment loss is charged to the Statement of Profit and Loss in the
year in which the assets is identified as impaired.
1.18 Provisions and contingencies :
In accordance with the Accounting Standards - 29 (AS-29) "Provisions
and contingencies" issued by the Institute of Chartered Accountants of
India, a provision is recognised when the Company has a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are
determined based of the best estimate 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. Contingent
liabilities are disclosed in the Notes.
1.19 Hedge accounting:
In accordance with the Accounting Standards - 30 (AS-30) "Financial
Instruments: Recognisation and Measurement" issued by the Institute
of Chartered Accountants of India, the company used foreign currency
forward contracts to hedge its risks associated with foreign currency
fluctuations relating to highly probable forecast transactions. The
Company designates such forward exchange contracts in a cash flow
hedging relationship by applying the hedge accounting principles set
out in AS-30. These forward exchange contracts are stated at fair value
of each reporting date. The MTM (marked to market) losses are provided
on the Statement of Profit & Loss and the MTM (marked to market)
profit, if any are disclosed in the Notes.
1.20 Derivative contracts :
The Company enters into derivative contracts in the nature of forward
exchange contracts with an intention to hedge its existing assets and
liabilities and highly probable transactions. Derivative contracts
which are closely linked to the existing assets and liabilities are
accounted as per the policy stated for Foreign Currency Transactions
and Translations.
Derivative contracts designated as a hedging instrument for highly
probable forecast transactions are accounted as per the policy stated
for Hedge Accounting.
The marked to market and losses are recognised in the Statement of
Profit and Loss. Gain arising on the same are not recognised, until
realised, on grounds of prudence.
1.21 Cenvat & VAT input credit:
Central excise duty payment elements and Service tax payment elements,
both covered and allowable as Cenvat credit and state Value Added Tax
payment elements allowable as VAT credit are accounted for in the books
in the period in which the underlying service received is accounted and
when there is no uncertainty in availing/utilising the Cenvat and VAT
credits.
Mar 31, 2011
1. Basis of Preparation of Financial Statements :
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India ("Indian GAAP") and
relevant provisions of the Companies Act, 1956 with the Accounting
Standards prescribed in Companies (Accounting Standards) Rules, 2006,
issued by the Central Government in consultation with the National
Advisory Committee on Accounting Standards, to the extent applicable.
The fundamental accounting assumptions based on going concern and
consistency.
2. Use of Estimates :
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent liabilities and assets as at the Balance Sheet date and
reported amounts of income and expenses during the year. Actual results
could differ from those estimates. Difference between the actual
results and the estimates are recognized in the year in which the
results are known/materialized.
3. Fixed Assets and Depreciations :
The entire Company's Fixed Assets are Tangible Assets. In accordance
with the Accounting Standard 10 (AS - 10) "Accounting for Fixed Assets"
issued by the Institute of Chartered Accountants of India, the
accounting of fixed assets & depreciation computed as follows :-
a) Fixed Assets are stated at their original cost of acquisition as
reduced by sale/loss of any fixed assets, and accumulated depreciation
thereof on such fixed assets.
b) Addition to Fixed Assets are stated at cost of equipment, creation
cost and other relative expenses and excludes Excise Duty, Education
Cess, Higher & Secondary Education Cess and Input Service Tax payment
elements for availing Cenvat Credit on Capital Goods, and allowable
West Bengal Value Added Tax elements etc. for availing West Bengal VAT
Credit on Capital Goods of such assets.
c) Depreciation on fixed assets is calculated on pro-rata basis with
reference to the date of addition/disposal at the written down value
rates prescribed in the Schedule XIV of the Companies Act, 1956.
4. Impairment of Fixed Assets :
The carrying amounts of fixed assets are reviewed at each balance sheet
date in accordance with Accounting Standards 28 on "Impairment of
Assets" prescribed by Companies (Accounting Standards) Rules,2006, to
determine whether there is any indication of impairment. An assets is
treated as impaired when the carrying cost of assets exceeds its
recoverable value. An impairment loss is charged to the profit and loss
account in the year in which an assets is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
5. Investments:
In accordance with the Accounting Standard 13 (AS - 13) "Accounting for
Investments" issued by the Institute of Chartered Accountants of India,
the investments are classified as current investments and long-term
investments. As on date the all investments of the company are
classified as current investments. The accounting treatments are as
below :-
a) Current investments in shares of various domestic companies are
valued at cost on First- in-First-Out (Fl FO) basis. The Profit & Loss
on sale of shares are also calculated on the basis of
First-in-First-Out (FIFO) method. Provisions for diminution in value of
current investments are also provided on each investment.
b) Long term investments in shares of various domestic companies and
units of mutual funds are valued at cost and/or Net Assets Value (NAV)
cost on First-in-First-Out (FIFO) basis. The Profit & Loss on sale of
shares and redemption of mutual funds are also calculated on the basis
of First-in-First-Out (FIFO) method. Provision for diminution in value
of such long term investments are also provided on each investment.
c) The moment of current and long term investment made during the year
are also disclosed.
6. Accounting for Foreign Currency Transaction :
In accordance with the Accounting Standard 11 (AS - 11) "The Effects of
Changes in Foreign Exchange Rates" issued by the Institute of Chartered
Accountants of India, the Transaction in Foreign Currencies are
accounted for at the exchange rate prevailing on the date of
transaction. Foreign Currency monetary assets at the year end are
translated using closing transaction rates. Fluctuations, if any, due
to change in exchange rates between the dates of transactions and date
of realisation within the same financial year are adjusted against the
same account heads. The un-hedged closing outstanding/advances etc. in
Foreign Currencies transactions are valued at closing exchange rate as
on the year end. The hedged closing outstanding in Foreign Currencies
transactions are valued at their respective forward contract rates. Any
difference arises on the valuation of forward contract rates and
booking rates as well as closing rates & booking rates etc. are
recognized in Profit & Loss Account on respective account head.
Exchange differences arising on settlements/transactions related to
earlier year or succeeding year are recognized separately in the Profit
& Loss Account.
7. Employee Benefits :
The Company has Defined Contribution Plan for its employees Retirement
Benefits comprising of Recognized Provident Fund & Pension Fund. The
Company makes regular contribution to Recognized Provident Fund &
Pension Fund which are fully funded and administered by the Government.
Contributions are recognized in Profit and Loss Account on accrual
basis. The Company has Defined Benefit Plan of Retirement Gratuity
schemes. The Company contributes to the Group Gratuity Fund under the
Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation
of India (LIC) for future payment of gratuity liability to its
employees. Consequent to the adoption of Accounting Standard 15 (AS-15
Revised) on "Employee Benefits", the liability for the Gratuity as at
the year end has been determined on the basis of an independent
actuarial valuation made by LIC with the method stated in AS-15
(Revised) and such liability/ assets has been adjusted and provided in
these Accounts.
Other Benefits like Leave Encashment benefit for any unutilized leave
are charged to Profit and Loss Account on each year on accrual basis of
actual payment made to employee. There are no rules for carried forward
unutilized leave benefit.
8. Forward contracts in foreign currencies :
The Company uses foreign exchange forward contracts to hedge its
exposure to movements in foreign currency rates. The use of these
foreign exchange forward contracts reduces the risk or cost to the
Company and the Company does not use the foreign exchange forward
contracts for trading or speculation purposes. The premium or discount
on all such contracts arising at the inception of each contract is
amortised as income or expenses of these particulars contracts.
9. Provision for Current and Deferred Tax :
In accordance with the Accounting Standard 22 (AS - 22) "Accounting for
Taxes" issued by the Institute of Chartered Accountants of India, the
provision for current income tax and current fringe benefit tax is made
after taking into consideration benefits admissible under the
provisions of the Income Tax Act, 1961. Deferred tax resulting from
"timing differences" between taxable income (inclusive of allowable
carried forward losses as per Income Tax Act, 1961) and accounting
income is accounted for using the tax rates and laws that are enacted
or substantively enacted as on the balance sheet date. The Deferred Tax
Assets is recognised and carried forward only to the extent that there
is a virtual certainty that the asset will be realized in future. Such
assets are reviewed as at each balance sheet date to reassess
realisation.
10. Prior period adjustments, extra-ordinary items and changes in
Accounting Policy:
Prior period adjustments, extra-ordinary items and changes in
accounting policies having material impact on the financial affairs of
the Company are disc'osed.
11. Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
12. Earning Per Share:
In accordance with the Accounting Standard 20 (AS - 20) "Earning Per
Share" issued by the Institute of Chartered Accountants of India, basic
earning per share is computed using the weighted average number of
shares outstanding during the period.
13. Revenue Recognisation:
In accordance with the Accounting Standard 9 (AS - 9) "Revenue
Recognisation" issued by the Institute of Chartered Accountants of
India, the Revenue and expenditures are recognized as below :-
a) Export Sales in Foreign Currencies represent the Export Sales less
if any Export Returns, Sample/Replacement etc. (inclusive of premium or
discount on their forward contracts in foreign currencies materialized,
if any) and the entire amount has been realized in India as per
prevailing exchange rate.
b) Domestic Sales represents Basic plus Excise Duty & Cess on invoice
value of goods supplied and are recorded net of deduction on the any
sample/replacement bills etc.
c) Scrap Sales represents Basic plus Excise Duty & Cess on invoice
value of scrap material.
d) The recovery of Central Sales Taxes and West Bengal Value Added
Taxes etc. in Domestic Sales credited to separate account and no amount
of Central Sales Tax & West Bengal Value Added Taxes etc. payment is
reflected through Profit & Loss Account.
e) Consumption of Raw Materials and Components, Stores & Spares,
Imported Goods & Traded Goods etc. include invoiced value of goods
purchased less trade discount, rebate, Cenvat, and West Bengal VAT
Credit allowable on such purchase etc.
f) The other heads of income & all expenditure items having a material
bearing on the financial statements are recognised on mercantile &
accrual basis.
14. Inventories:
In accordance with the Accounting Standard 2 (AS - 2) "Valuation of
Inventories" issued by the Institute of Chartered Accountants of India,
the valuation of stock summarized as below :-
a) Stock of Raw Materials, Components & Paints, Stores & Spares and
Consumables, Work- in-process Zinc Alloys are valued at cost on Fl FO
basis (excluding of the amount of Cenvat & West Bengal VAT Credit
allowable). A separate ledger for Cenvat & West Bengal VAT Credit
allowable has been maintained for proper utilization of Cenvat & West
Bengal VAT Credit and the same adjusted against payment of Excise Duty
and Output VAT liability on account of any Sales. Rebate of Excise Duty
if any realized or receivable has been adjusted against the payment of
Excise Duty.
b) Stocks on Finished Goods & Semi-Finished Goods are valued at lower
of cost (excluding of the amount of Cenvat & West Bengal VAT Credit
allowable) or net realisable value.
c) Stocks of Scrap Materials are valued at net realisable value.
d) Goods-in-transit of purchase material are valued at purchase price.
e) There is no deviation in method of valuation of stock as prescribed
U/s.145Aof the Income Tax Act, 1961.
Mar 31, 2010
1. Basis of Preparation of Financial Statements :
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India ("Indian GAAP") and
relevant provisions of the Companies Act, 1956 with the Accounting
Standards prescribed in Companies (Accounting Standards) Rules, 2006,
issued by the Central Government in consultation with the National
Advisory Committee on Accounting Standards, to the extent applicable.
The fundamental accounting assumptions based on going concern and
consistency.
2. Use of Estimates :
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent liabilities and assets as at the Balance Sheet date and
reported amounts of income and expenses during the year. Actual results
could differ from those estimates. Difference between the actual
results and the estimates are recognized in the year in which the
results are known/materialized.
3. Fixed Assets and Depreciations :
The entire Companys Fixed Assets are Tangible Assets. In accordance
with the Accounting Standard 10 (AS - 10) "Accounting for Fixed Assets"
issued by the Institute of Chartered Accountants of India, the
accounting of fixed assets & depreciation computed as follows :-
a) Fixed Assets are stated at their original cost of acquisition as
reduced by sale/loss of any fixed assets, and accumulated depreciation
thereof on such fixed assets.
b) Addition to Fixed Assets are stated at cost of equipment, creation
cost and other relative expenses and excludes Excise Duty, Education
Cess, Higher & Secondary Education Cess and Input Service Tax payment
elements for availing Cenvat Credit on Capital Goods, and allowable
West Bengal Value Added Tax elements etc. for availing West Bengal Vat
Credit on Capital Goods of such assets.
c) Depreciation on fixed assets is calculated on pro-rata basis with
reference to the date of addition/disposal at the written down value
rates prescribed in the Schedule XIV of the Companies Act , 1956.
4. Impairment of Fixed Assets :
The carrying amounts of fixed assets are reviewed at each balance sheet
date in accordance with Accounting Standards 28 on "Impairment of
Assets" prescribed by Companies (Accounting Standards) Rules,2006, to
determine whether there is any indication of impairment. An assets is
treated as impaired when the carrying cost of assets exceeds its
recoverable value. An impairment loss is charged to the profit and loss
account in the year in which an assets is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
5. Investments :
In accordance with the Accounting Standard 13 (AS - 13) "Accounting for
Investments" issued by the Institute of Chartered Accountants of India,
the investments are classified as current investments and long-term
investments. As on date the all investments of the company are
classified as current investments. The accounting treatments are as
below :-
a) Current investments in shares of various domestic companies are
valued at cost on First- in-First-Out (FIFO) basis. The Profit & Loss
on sale of shares are also calculated on the basis of
First-in-First-Out (FIFO) method. Provisions for diminution in value of
current investments are also provided on each investment.
b) Long term investments in shares of various domestic companies and
units of mutual funds are valued at cost and/or Net Assets Value (NAV)
cost on First-in-First-Out (FIFO) basis. The Profit & Loss on sale of
shares and redemption of mutual funds are also calculated on the basis
of First-in-First-Out (FIFO) method. Provision for diminution in value
of such long term investments are also provided on each investment.
c) The moment of current and long term investment made during the year
are also disclosed.
6. Accounting for Foreign Currency Transaction :
In accordance with the Accounting Standard 11 (AS Ã 11) "The Effects of
Changes in Foreign Exchange Rates" issued by the Institute of Chartered
Accountants of India, the Transaction in Foreign Currencies are
accounted for at the exchange rate prevailing on the date of
transaction. Foreign Currency monetary assets at the year end are
translated using closing transaction rates. Fluctuations, if any, due
to change in exchange rates between the dates of transactions and date
of realisation within the same financial year are adjusted against the
same account heads. Exchange differences arising on
settlements/transactions related to earlier year are recognized
separately in the Profit and Loss Account.
7. Employee Benefits :
The Company has Defined Contribution Plan for its employees Retirement
Benefits comprising of Recognized Provident Fund & Pension Fund. The
Company makes regular contribution to Recognized Provident Fund &
Pension Fund which are fully funded and administered by the Government.
Contributions are recognized in Profit and Loss Account on accrual
basis.
The Company has Defined Benefit Plan of Retirement Gratuity schemes.
The Company contributes to the Group Gratuity Fund under the Group
Gratuity Cash Accumulated Scheme with Life Insurance Corporation of
India (LIC) for future payment of gratuity liability to its employees.
Consequent to the adoption of Accounting Standard 15 {AS-15 Revised) on
"Employee Benefits", the liability for the Gratuity as at the year end
has been determined on the basis of an independent actuarial valuation
made by LIC with the method stated in AS-15 (Revised) and such
liability/ assets has been adjusted and provided in these Accounts.
Other Benefits like Leave Encashment benefit for any unutilized leave
are charged to Profit and Loss Account on each year on accrual basis of
actual payment made to employee. There are no rules for carried forward
unutilized leave benefit.
8. Forward contracts in foreign currencies :
The Company uses foreign exchange forward contracts to hedge its
exposure to movements in foreign currency rates. The use of these
foreign exchange forward contracts reduces the risk or cost to the
Company and the Company does not use the foreign exchange forward
contracts for trading or speculation purposes. The premium or discount
on all such contracts arising at the inception of each contract is
amortised as income or expenses of these particular contracts. Any
profit and loss arising on the cancellation of forward contracts is
recognized as income or expenses separately for the period.
9. Provision for Current and Deferred Tax :
In accordance with the Accounting Standard 22 (AS Ã 22) "Accounting for
Taxes" issued by the Institute of Chartered Accountants of India, the
provision for current income tax and current fringe benefit tax is made
after taking into consideration benefits admissible under the
provisions of the Income Tax Act, 1961. Deferred tax resulting from
"timing differences" between taxable income (inclusive of allowable
carried forward losses as per Income Tax Act, 1961) and accounting
income is accounted for using the tax rates and laws that are enacted
or substantively enacted as on the balance sheet date. The Deferred Tax
Assets is recognised and carried forward only to the extent that there
is a virtual certainty that the asset will be realized in future. Such
assets are reviewed as at each balance sheet date to reassess
realisation.
10. Prior period adjustments, extra-ordinary items and changes in
Accounting Policy:
Prior period adjustments, extra-ordinary items and changes in
accounting policies having material impact on the financial affairs of
the Company are disclosed.
11. Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
12. Earning Per Share :
In accordance with the Accounting Standard 20 (AS Ã 20) "Earning Per
Share" issued by the Institute of Chartered Accountants of India, basic
earning per share is computed using the weighted average number of
shares outstanding during the period.
13. Revenue Recognisation :
In accordance with the Accounting Standard 9 (AS - 9) "Revenue
Recognisation" issued by the Institute of Chartered Accountants of
India, the Revenue and expenditures are recognized as below :- a)
Export Sales in Foreign Currencies represent the Export Sales less
Export Returns, if any, Sample/Replacement etc.(inclusive of premium or
discount on their forward contracts in foreign currencies materialized,
if any) and the entire amount has been realized in India as per
prevailing exchange rate.
b) Domestic Sales represents Basic plus Excise Duty & Cess on invoice
value of goods supplied and are recorded net of deduction on any
sample/replacement bills etc.
c) Scrap Sales represents Basic plus Excise Duty & Cess on invoice
value of scrapped Materials (Zinc Ash & Zinc Dross etc.).
d) The recovery of Central Sales Taxes and West Bengal Value Added
Taxes etc. in Domestic Sales credited to separate account and no amount
of Central Sales Tax & West Bengal Value Added Taxes etc. payment is
reflected through Profit & Loss Account.
e) Consumption of Raw Materials and Components, Stores & Spares,
Imported Goods & Traded Goods etc. include invoiced value of goods
purchased less trade discount, rebate, Cenvat, and West Bengal VAT
Credit allowable on such purchase etc.
f) The other heads of income & all expenditure items having a material
bearing on the financial statements are recognised on mercantile &
accrual basis.
14. Inventories :
In accordance with the Accounting Standard 2 (AS - 2) "Valuation of
Inventories" issued by the Institute of Chartered Accountants of India,
the valuation of stock summarized as below :-
a) Stock of Raw Materials, Components & Paints, Stores & Spares and
Consumables, Work- in-process Zinc Alloys are valued at cost on FIFO
basis (excluding the amount of Cenvat & West Bengal VAT Credit
allowable). A separate ledger for Cenvat & West Bengal VAT Credit
allowable has been maintained for proper utilization of Cenvat & West
Bengal VAT Credit and the same adjusted against payment of Excise Duty
and Output VAT liability on account of any Sales. Rebate of Excise Duty
if any realized or receivable has been adjusted against the payment of
Excise Duty.
b) Stocks on Finished Goods & Semi-Finished Goods are valued at lower
of cost (excluding of the amount of Cenvat & West Bengal Vat Credit
allowable) or net realisable value.
c) Stocks of Scrap Materials are valued at net realisable value.
d) Goods-in-transit of purchase material are valued at purchase price.
e) There is no deviation in method of valuation of stock as prescribed
U/s.145A of the Income Tax Act, 1961.