A Oneindia Venture
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Accounting Policies of Evexia Lifecare Ltd. Company
Mar 31, 2024
1.3 SIGNIFICANT ACCOUNTING POLICIES
A. Property, Plant and Equipment:
i. Recognition and measurement
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items.
Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognized in the Statement of Profit and Loss.
If significant parts of an item of property, plant and equipment have different useful life, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in the Statement of Profit and Loss.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1,2016 measured as per the Previous GAAP and use that carrying value as the deemed cost (except to the extent of any adjustment permissible under other accounting standard) of the property, plant and equipment.
ii. Subsequent Expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
iii. Depreciation
Depreciation on tangible fixed assets is provided in accordance with the provisions of Schedule II of the Companies Act 2013. Depreciation on additions / deductions is calculated on pro rata basis from/up to the month of additions/deductions. The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
B. Intangible Assets:
i. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any.
C. Impairment:
i. Non - financial assets
At each balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite life may be impaired. If any such impairment exists, the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
D. Inventories:
i. Finished and Semi-Finished Products produced and purchased by the company are carried at Cost and net realizable value, whichever is lower.
ii. Work in Progress is carried at lower of cost and net realizable value.
iii. Raw Material is carried at lower of cost and net realizable value.
iv. Stores and Spares parts are carried at cost. Necessary provision is made and expensed in case of identified obsolete and nonmoving items.
Cost of Inventory is generally ascertained on the ''Weighted average'' basis. Work in progress, Finished and semifinished products are valued at on full absorption cost basis.
Cost Comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Packing Material is considered as finished goods. Consumable stores are written off in the year of Purchase.
E. Foreign Currency Transactions
Transactions in Foreign Currency and Non-Monetary Assets are accounted for at the Exchange Rate prevailing on the date of the transaction. All monetary items denominated in Foreign Currency are converted at the Year-End Exchange Rate. The Exchange Differences arising on such conversion and on settlement of the transactions are recognized as income or as expenses in the year in which they arise.
F. Investments and Other Financial Assets:
Classification
The Company classifies its financial assets in the following measurement categories:
⢠Those to be measured subsequently at fair value (either through other comprehensive income, or through Statement of Profit and Loss), and
⢠Those measured at amortized cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in Statement of Profit and Loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt or equity investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, in case of a financial asset not at fair value through profit and loss, the Company measures a financial asset at its fair value plus, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through Statement of Profit and Loss are expensed in Statement of Profit and Loss.
(a) Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.
(b) Fair Value through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of
principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through Other Comprehensive Income (OCI), except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit and loss and recognized in other gains/ losses. Interest income from these financial assets is included in other income using the effective interest rate method.
(c) Fair value through profit and loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through Statement of Profit and Loss. Interest income from these financial assets is included in other income.
Equity Instruments
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to Statement of Profit and Loss. Dividends from such investments are recognized in Statement of Profit and Loss as other income when the Company''s right to receive payment is established.
Changes in the fair value of financial assets at fair value through profit and loss are recognized in other gain/losses in the Statement of Profit and Loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
Derecognition
A financial asset is derecognized only when
(a) The Company has transferred the rights to receive cash flows from the financial asset or
(b) Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
G. Cash and Cash Equivalents:
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and highly liquid investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
H. Financial Liabilities:
Measurement
All financial liabilities are recognized initially at fair value and in the case of loans, borrowings and payables recognized net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.
I. Revenue recognition:
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Revenue from the sale of goods is recognized at the point in time when control of the asset is transferred to the customer, generally on the delivery of the goods. Revenue is recognisable to the extent of the amount that reflects the consideration (i.e. the transaction price) to which the Company is expected to be entitled in exchange for those goods or services excluding any amount received on behalf of third party (such as indirect taxes).
J. Other Income:
Other income is comprised primarily of interest income, dividend income, gain/loss on investments and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Claims for export incentives/ duty drawbacks, duty refunds and insurance are accounted when the right to receive payment is established. Dividend Income is recognized when the right to receive dividend is established.
K. Employee benefits:
A. Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognized at actual amounts due in the period in which the employee renders the related service.
B. Contribution towards defined benefit contribution Schemes Gratuity plan
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is eligible for gratuity on post-employment at 15 days salary (last drawn salary) for each completed year of service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of the financial year. Current service cost, Past-service costs are recognized immediately in Statement of profit or loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Re measurements are not reclassified to profit or loss in subsequent periods.
L. Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
M. Taxes on Income:
Income Tax expense comprises of current and deferred tax. Income Tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
(i) Current Tax
Current Tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date
Current tax assets and liabilities are offset if, and only if, the Company:
a) has a legally enforceable right to set off the recognized amounts; and
b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if:
a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Mar 31, 2023
1.1 CORPORATE INFORMATION
Evexia Lifecare Limited (Formerly known as Kavit Industries Limited) is Public Limited Company incorporated in India under the provisions of the Companies Act, 1956. The Company''s strength lies in the trading of Chemicals, Agriculture Produce and Various Other Products of Consumer Goods.
The Board of Directors approved the standalone financial statements for the year ended March 31, 2023 and authorized for issue on 27th May,2023.
Significant Accounting policies followed by the Company.
1.2 BASIS OF PREPARATIONi. Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 (âthe Actâ), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act as applicable.
The accounting policies are applied consistently to all the periods presented in the financial statements.
ii. Historical cost convention
The financial statements have been prepared on a historical cost basis, except the following:
⢠Certain financial assets and liabilities that are measured at fair value;
⢠Assets held for sale - measured at lower of carrying amount or fair value less cost to sell;
⢠Defined benefit plans - plan assets measured at fair value.
iii. Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (not exceeding twelve months) and other criteria set out in the Schedule III to the Act.
iv. Functional and presentation currency
These financial statements are presented in Indian Rupees, which is the Company''s functional currency.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
1.3 SIGNIFICANT ACCOUNTING POLICIESA. Property, Plant and Equipment:i. Recognition and measurement
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items.
Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognized in the Statement of Profit and Loss.
If significant parts of an item of property, plant and equipment have different useful life, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in the Statement of Profit and Loss.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 measured as per the Previous GAAP and use that carrying value as the deemed cost (except to the extent of any adjustment permissible under other accounting standard) of the property, plant and equipment.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation on tangible fixed assets is provided in accordance with the provisions of Schedule II of the Companies Act 2013. Depreciation on additions / deductions is calculated on pro rata basis from/up to the month of additions/deductions. The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
i. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment, if any.
C. Impairment:i. Non - financial assets
At each balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite life may be impaired. If any such impairment exists, the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
i. Finished and Semi-Finished Products produced and purchased by the company are carried at Cost and net realizable value, whichever is lower.
ii. Work in Progress is carried at lower of cost and net realizable value.
iii. Raw Material is carried at lower of cost and net realizable value.
iv. Stores and Spares parts are carried at cost. Necessary provision is made and expensed in case of identified obsolete and nonmoving items.
Cost of Inventory is generally ascertained on the ''Weighted average'' basis. Work in progress, Finished and semi-finished products are valued at on full absorption cost basis.
Cost Comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Packing Material is considered as finished goods. Consumable stores are written off in the year of Purchase.
E. Foreign Currency Transactions
Transactions in Foreign Currency and Non-Monetary Assets are accounted for at the Exchange Rate prevailing on the date of the transaction. All monetary items denominated in Foreign Currency are converted at the Year-End Exchange Rate. The Exchange Differences arising on such conversion and on settlement of the transactions are recognized as income or as expenses in the year in which they arise.
F. Investments and Other Financial Assets:Classification
The Company classifies its financial assets in the following measurement categories:
⢠Those to be measured subsequently at fair value (either through other comprehensive income, or through Statement of Profit and Loss], and
⢠Those measured at amortized cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in Statement of Profit and Loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt or equity investments when and only when its business model for managing those assets changes.
At initial recognition, in case of a financial asset not at fair value through profit and loss, the Company measures a financial asset at its fair value plus, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through Statement of Profit and Loss are expensed in Statement of Profit and Loss.
(a] Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.
(b] Fair Value through Other Comprehensive Income (FVOCI]: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through Other Comprehensive Income (OCI], except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit and loss and recognized in other gains/ losses. Interest income from these financial assets is included in other income using the effective interest rate method.
(c] Fair value through profit and loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through Statement of Profit and Loss. Interest income from these financial assets is included in other income.
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to Statement of Profit and Loss. Dividends from such investments are recognized in Statement of Profit and Loss as other income when the Company''s right to receive payment is established.
Changes in the fair value of financial assets at fair value through profit and loss are recognized in other gain/losses in the Statement of Profit and Loss. Impairment losses (and reversal of impairment losses] on equity investments measured at FVOCI are not reported separately from other changes in fair value.
A financial asset is derecognized only when
(a) The Company has transferred the rights to receive cash flows from the financial asset
or
(b) Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and highly liquid investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
H. Financial Liabilities:Measurement
All financial liabilities are recognized initially at fair value and in the case of loans, borrowings and payables recognized net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.
I. Revenue recognition:
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Revenue from the sale of goods is recognized at the point in time when control of the asset is transferred to the customer, generally on the delivery of the goods. Revenue is recognisable to the extent of the amount that reflects the consideration (i.e. the transaction price) to which the Company is expected to be entitled in exchange for those goods or services excluding any amount received on behalf of third party (such as indirect taxes).
Other income is comprised primarily of interest income, dividend income, gain/loss on investments and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Claims for export incentives/ duty drawbacks, duty refunds and insurance are accounted when the right to receive payment is established. Dividend Income is recognized when the right to receive dividend is established.
K. Employee benefits:A. Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognized at actual amounts due in the period in which the employee renders the related service.
B. Contribution towards defined benefit contribution Schemes Gratuity plan
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is eligible for gratuity on post-employment at 15 days salary (last drawn salary] for each completed year of service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of the financial year. Current service cost, Past-service costs are recognized immediately in Statement of profit or loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Re measurements are not reclassified to profit or loss in subsequent periods.
L. Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Income Tax expense comprises of current and deferred tax. Income Tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
Current Tax is the amount of income taxes payable (recoverable] in respect of the taxable profit (tax loss] for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date
Current tax assets and liabilities are offset if, and only if, the Company:
a] has a legally enforceable right to set off the recognized amounts; and
b] intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if:
a] the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b] the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
N. Provisions and Contingencies:
a] Provisions are recognized based on the best estimate of probable outflow of resources which would be required to settle obligations arising out of past events.
b] Contingent liabilities not provided for as per (a] above are disclosed in notes forming part of the Financial Statements If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate,
the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
c] Contingent Assets are disclosed, where the inflow of economic benefits is probable.
a] Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes] by the weighted average number of equity shares outstanding during the period.
b] For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
(A] Lease Liability
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments shall be discounted using incremental borrowing rate.
(B] Right-of-use assets
Initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
Subsequent measurement
(A] Lease Liability
Company measure the lease liability by (a] increasing the carrying amount to reflect interest on the lease liability; (b] reducing the carrying amount to reflect the lease payments made; and (c] remeasuring the carrying amount to reflect any reassessment or lease modifications.
(B] Right-of-use assets
Subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight line basis over the shorter of the lease term and useful life of the under lying asset.
Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use] is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU] to which the asset belongs.
Short term lease is that, at the commencement date, has a lease term of 12 months or less. A lease that contains a purchase option is not a short-term lease. If the company elected to apply short term lease, the lessee shall recognise the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis. The lessee shall apply another systematic basis if that basis is more representative of the pattern of the lessee''s benefit.
Leases for which the company is a lessor is classified as a finance or operating lease. Whenever, the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
Lease income is recognised in the statement of profit and loss on straight line basis over the lease term.
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.
2. USE OF JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
While preparing financial statements in conformity with Ind AS, the management has made certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on the management estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecasted and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.
Judgment, estimates and assumptions are required in particular for:
a) Determination of the estimated useful life of tangible assets
Useful life of tangible assets is based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful life are different from that prescribed in Schedule II, they are based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers'' warranties and maintenance support.
b) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation, actuarial rates and life expectancy. The discount rate is determined by reference to market yields at the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations. Due to complexities involved in the valuation and its long-term nature, defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting period.
c) Recognition of deferred tax liabilities
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases, and unutilized business loss and depreciation carryforwards and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carry-forwards and unused tax credits could be utilized.
d) Discounting of financial assets / liabilities
All financial assets / liabilities are required to be measured at fair value on initial recognition. In case of financial assets / liabilities which are required to be subsequently measured at amortized cost, interest is accrued using the effective interest method.
Mar 31, 2018
33 FINANCIAL RISK MANAGEMENT
The company''s activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in market conditions and the Company''s activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
(A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
(i) Trade receivables
The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. However, based on historical data, there were no significant bad debts written off nor provision for doubtful debts had been created. Further there is no Trade Receivables outstanding for more than 6 months at reporting date. Hence, allowances for doubtful debt has not been created.
(ii) Cash and cash equivalents
As at the year end, the Company held cash and cash equivalents of 17.38 Lacs (31.03.2017 74.34 Lakhs, 01.04.2016 157.30 '' Lakhs). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.
(iii) Loans and advances
In the case of loans to employees, the same is managed by establishing limits. (Which in turn based on the employees salaries and number of years of service put in by the concern employee)
(iv) Other Financials Assets
Others Financial Assets are considered to be of good quality and there is no significant increase in credit risk.
(v) REVALUATION OF FIXED ASSETS
The company has revalued it''s land, building, plant & machinery during the year after taking valuation report from external independent value. The figures shown in books of accounts are revalued figures and increase in carrying amount arising from upward revaluation in land amount has been transfer to revaluation reserve under the head reserves and surplus.
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
Maturities of financial liabilities
The tables herewith analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company uses derivative to manage market risk. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.
Currency risk
The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses both derivative instruments, i.e, foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.
The company enters into foreign currency forward contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables/receivables.
CAPITAL MANAGEMENT
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
The objective of company''s capital management are to:
- Safeguard their ability to continue as going concern so that they can continue to provide benefits to their shareholders
- Maximize the wealth of the shareholder.
- Maintain optimal capital structure to reduce the cost of capital
The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
The Company monitors capital using a ratio of ''adjusted net debt'' to ''total equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents, other bank bank balances and current investments.
Mar 31, 2016
Notes Forming Part of the Financial Statements
1. General Information
Kavit Industries Limited (Formerly known as Atreya Petrochem Limited) is Public Limited Company incorporated in India under the provisions of the Companies Act, 1956. The Companyâs strength lies in the various business Segments like manufacturing of Oil Products, Manufacturing & Trading of Garments of men and woman wears with Brand Name "RAW ", Company has also expanded another Line of Business in Power Sector with Name " KAVIT GREEN ENERGY PRIVATE LIMITEDâ ( 100% SPV OF KIL). The same has been set up as a Solar Energy Power Project in Karnataka which is awarded by KARNATAKA RENEWABLE ENERGY DEVELOPMENT LIMITED (Govt of Karnataka Undertaking.
2. Basis of preparation and presentation of financial statements
(a) Accounting Convention
The Accounts of the Company are prepared under the Historical Cost Convention on the Accrual Basis of Accounting in accordance with the Generally Accepted Accounting Principles in India (âGAAPâ) and in compliance with the mandatory Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, as amended, and with the relevant provisions of the Companies Act, 1956. The Financial Statements are presented in Indian Rupees rounded off to the nearest rupees.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting periods. Examples of such estimate include future obligations under employee benefit plans, income taxes, useful lives of fixed assets and intangible assets, impairment of assets, provision for doubtful debts etc. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could vary from these estimates. Appropriate changes in estimates are made as the management becomes aware of the changes in circumstances surrounding the estimates. Any revision to accounting estimates is recognized in the period in which such results are known/ materialized. Effect of material changes is disclosed in the notes to the financial statements.
The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisitions of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current-non-current classification of assets and liabilities.
(b) Tangible Assets, Depreciation
i. Tangible assets are stated at Cost less Accumulated Depreciation, Impairment loss, if any, ascertained as per the Accounting Standard 28 (Impairment of Assets). Cost comprises the Purchase Price and any such costs attributable for the purpose of bringing the asset to its working condition for its intended use.
ii. Tangible Assets under construction, Advances paid towards acquisition of Tangible Assets and Cost of Assets not ready for use as at the year end, are disclosed as Capital Work-In Progress.
iii. In respect of Tangible Assets depreciation is provided on Straight line basis applying the rates specified in schedule XIV of Companies Act 1956 except Computer.
iv. Tangible Assets below Rs.10000 are fully depreciated in the year of acquisition.
(c) Investment
Investments of long term-nature are stated at cost, less adjustment for any diminution, other than temporary, in the value thereof. Current Investments are stated at lower of cost or market value.
(d) Inventory
Finished and Semi-Finished Products produced and purchased by the company are carried at Cost and net realizable value, whichever is lower.
Work in Progress is carried at lower of cost and net realizable value.
Raw Material is carried at lower of cost and net realizable value.
Stores and Spares parts are carried at cost. Necessary provision is made and expensed in case of identified obsolete and non moving items.
Cost of Inventory is generally ascertained on the âWeighted average'' basis. Work in progress, Finished and semi finished products are valued at on full absorption cost basis.
Cost Comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Packing Material is considered as finished goods. Consumable stores are written off in the year of Purchase.
(e) Employee Benefits
Provision for Gratuity, Leave Encashment and bonus has not been made as none of the employee have completed the minimum qualified period of services.
(f) Impairment of Assets
At each balance sheet date, the management reviews the carrying amounts of each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exits, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the assets. Cash flows used to determine value in use are derived from annual budgets and strategic plans of the cash generating units.
(g) Revenue Recognition
Sale are recognized on when substantial risks and rewards of ownership in the goods are transferred to the buyer i.e. delivery as per terms of sale.
(h) Other Income
Interest Income and income from Investments are accounted on accrual basis.
Dividend Income is recognized when the right to receive dividend is established.
(i) Foreign Currency Transactions
Transactions in Foreign Currency and Non-Monetary Assets are accounted for at the Exchange Rate prevailing on the date of the transaction. All monetary items denominated in Foreign Currency are converted at the Year-End Exchange Rate. The Exchange Differences arising on such conversion and on settlement of the transactions are recognized as income or as expenses in the year in which they arise.
(j) Taxes on Income
Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
Deferred Tax is recognized for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets.
Deferred Tax Assets are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
(k) Cash & Cash Equivalent
Cash & Cash Equivalent for the purpose of cash flow statement comprises of cash at bank and in hand and short term investments/ bank deposits with an original maturity of three months or less.
(l) Provisions
A Provision is recognized when company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
(m) Trade Receivables:
In respect of Receivable for Sundry Debtors (Incl. Receivable on Sale of Investments) of Rs.166.92 Lacs and Other Trade receivable, the amount of Bad & Doubtful Debts are is not ascertainable on account of non- receipt of confirmation from the party.
(n) In respect of loan and advances, the amount of bad and doubtful debts is not ascertainable on account of non- receipt of confirmation from the party.
(o) In the opinion of the Directors, Current Assets, Loans & Advances have values at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and all known liabilities is adequate.
(p) Sundry Creditors, Unsecured loans, other liabilities, loans and advances, sundry debtors, and other current assets are subject to confirmation.
(q) Micro Small & Medium Enterprise: The Company is in the process of compiling the relevant information. Dues to Micro and small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. This has been relied upon by us.
(r) Claims, Demands and Contingencies :
Details of disputed and/ or contingent Liabilities are as follows:
(s) In the opinion of the Management, the Provident Fund and ESI act are not applicable, hence no provision have been made for the same.
(t) Earning & Expenditure in Foreign Currency : Nil (P.Y. - Nil)
(u) Directors Remuneration: 7,20,000 (P.Y. - Nil)
(v) Auditors Remuneration : 67,416/- (P.Y.60,000)
Mar 31, 2015
1. General Information
Kavit Industries Limited (Formeriyknown asAtreya Petrochem Limited) is
Public Limited Company incorporated in India under the provisions of
the Companies Act, 1956. The Company's strength lies in the various
business Segments like manufacturing of Oil Products, Manufacturing &
Trading of Garments of men and woman wears with Brand Name "RAW ",
Company has also expanded another Line of Business in Power Sector with
Name " KAVIT GREEN ENERGY PRIVATE LIMITED" (100% SPV OF KIL). The same
has been set up as a Solar Energy Power Project in Karnataka which is
awarded by KARNATAKA RENEWABLE ENERGY DEVELOPMENT LIMITED (Govt of
Karnataka Undertaking.
2. Basis of preparation and presentation of financial statements (a)
Accounting Convention The Accounts of the Company are prepared under
the Historical Cost Convention on the Accrual Basis of Accounting in
accordance with the Generally Accepted Accounting Principles in India
("GAAP") and in compliance with the mandatory Accounting Standards
notified under the Companies (Accounting Standards) Rules. 2006. as
amended, and with the relevant provisions of the Companies Act, 1956.
The Financial Statements are presented in Indian Rupees rounded off to
the nearest rupees.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of financial statements and the results of
operations during the reporting periods. Examples of such estimate
include future obligations under employee benefit plans, income taxes,
useful lives of fixed assets and intangible assets, impairment of
assets, provision for doubtful debts etc. Management believes that the
estimates used in the preparation of the financial statements are
prudent and reasonable. Actual results could vary from these
estimates..Appropriate changes in estimates are made as the management
becomes aware of the changes in circumstances surrounding the
estimates. Any revision to accounting estimates is recognized in the
period in which such results arc known/ materialized. Effect of
material changes is disclosed in the notes to the financial statements.
The Company has also reclassified the previous year figures in
accordance with the requirements applicable in the current year.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisitions
of assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current-non-current classification of assets
and liabilities.
(b) Tangible Assets, Depreciation
i. Tangible assets are stated at Cost less Accumulated Depreciation,
Impairment loss, if any, ascertained as per the Accounting Standard 28
(Impairment of Assets). Cost comprises the Purchase Price and any such
costs attributable for the purpose of bringing the asset to its working
condition for its intended use.
ii. Tangible Assets under construction, Advances paid towards
acquisition of Tangible Assets and Cost of Assets not ready for use as
at the year end, are disclosed as Capital Work-In Progress.
iii. In respect of Tangible Assets depreciation is provided on Straight
line basis applying the rates specified in schedule XIV of Companies
Act 1956 except Computer.
iv. Tangible Assets below Rs. 10000 are fully depreciated in the year
of acquisition.
(c) Investment
Investments of long term-nature are stated at cost, less adjustment for
any diminution, other than temporary, in the value thereof. Current
Investments are stated at lower of cost or market value.
(d) Inventory
Finished and Semi-Finished Products produced and purchased by the
company are carried at Cost and net realisable value, whichever is
lower.
Work in Progress is carried at lower of cost and net realisable value.
Raw Material is carried at lower of cost and net realisable value.
Stores and Spares parts are carried at cost. Necessary provision is
made and expensed in case of identified obsolete and non moving items.
Cost of Inventory is generally ascertained on the Weighted average'
basis. Work in progress. Finished and semi finished products are valued
at on full absorption cost basis.
Cost Comprises expenditure incurred in the normal course of business in
bringing such inventories to its location and includes, where
applicable, appropriate overheads based on normal level of activity.
Packing Material is considered as finished goods. Consumable stores
are written off in the year of Purchase.
(e) Employee Benefits
Provision for Gratuity, Leave Encashment and bonus has not been made as
none of the employee have completed the minimum qualified period of
services.
(f) Impairment of Assets
At each balance sheet date, Che management reviews the carrying amounts
of each cash generating unit to determine whether there is any
indication that those assets were impaired. If any such indication
exits, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss. Recoverable amount is higher
of an asset's net selling price and value in use. In assessing value in
use, the estimated future cash flows expected from the continuing use
of the assets and from its disposal are discounted to their present
value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to [he
assets. Cash Hows used to determine value in use are derived from
annual budgets and strategic plans of the cash generating units.
(g) Revenue Recognition
Sale are recognized on when substantial risks and rewards of ownership
in the goods are transferred to the buyer i.e. delivery as per terms of
sale.
(h) Other Income
interest income and income from Investments are accounted on accrual
basis. Dividend Income is recognized when the right to receive
dividend is established.
(i) Foreign Currency Transactions
Transactions in Foreign Currency and Non--Monetary Assets are accounted
for at the Exchange Rate prevailing on the date of the transaction. All
monetary items denominated in Foreign Currency are converted at the
Year-End Exchange Rate. The Exchange Differences arising on such
conversion and on settlement of the transactions are recognized as
income or as expenses in the year in which they arise,
(j) Taxes on Income
Current Income Tax is measured at the amount expected to be paid to the
ta.x authorities in accordance with the Income Tax Act, 1961.
Deferred Tax is recognized tor all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized.
(k) Cash & Cash Equivalent
Cash & Cash Equivalent for the purpose of cash flow statement comprises
of cash at bank and in hand and short term investments/ bank deposits
with an original maturity ofthree months or less.
(l) Provisions
A Provision is recognized when company has a present obligation as a
result of past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at: each reporting date
and adjusted to reflect the current best estimates.
(m) Trade Receivables:
In respect of Receivable for Sundry Debtors (Incl. Receivable on Sale
of Investments) of Rs. 166.92 Lacs and Other Trade receivable, the
amount of Bad & Doubtful Debts are is not ascertainable on account of
non- receipt of confirmation from the party.
(n) In respect of loan and advances, the amount of bad and doubtful
debts is not ascertainable on account of non- receipt of confirmation
from the party.
(o) In the opinion of the Directors, Current Assets, Loans & Advances
have values at which they are stated in the Balance Sheet, if realized
in the ordinary course of business. The provision for depreciation and
all known liabilities is adequate.
(p) Sundry Creditors, Unsecured loans, other liabilities, loans and
advances, sundry debtors, and other current assets are subject to
confirmation.
(q) Micro Small & Medium Enterprise: The Company is in the process of
compiling the relevant information. Dues to Micro and small enterprises
have been determined to the extent such parties have been identified on
the basis of information collected by the management. This has been
relied upon by us.
Mar 31, 2014
(a) Accounting Convention
The Accounts of the Company are prepared under the Historical Cost
Convention on the Accrual Basis of Accounting in accordance with the
Generally Accepted Accounting Principles in India ("GAAP") and in
compliance with the mandatory Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006, as amended, and with the
relevant provisions of the Companies Act, 1956. The Financial
Statements are presented in Indian Rupees rounded off to the nearest
rupees.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of financial statements and the results of
operations during the reporting periods. Examples of such estimate
include future obligations under employee benefit plans, income taxes,
useful lives of fixed assets and intangible assets, impairment of
assets, provision for doubtful debts etc. Management believes that the
estimates used in the preparation of the financial statements are
prudent and reasonable. Actual results could vary from these estimates.
Appropriate changes in estimates are made as the management becomes
aware of the changes in circumstances surrounding the estimates. Any
revision to accounting estimates is recognized in the period in which
such results are known/ materialized. Effect of material changes is
disclosed in the notes to the financial statements.
The Company has also reclassified the previous year figures in
accordance with the requirements applicable in the current year.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisitions
of assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current-non-current classification of assets
and liabilities.
(b) Tangible Assets, Depreciation
i. Tangible assets are stated at Cost less Accumulated Depreciation,
Impairment loss, if any, ascertained as per the Accounting Standard 28
(Impairment of Assets). Cost comprises the Purchase Price and any such
costs attributable for the purpose of bringing the asset to its working
condition for its intended use.
ii. Tangible Assets under construction, Advances paid towards
acquisition of Tangible Assets and Cost of Assets not ready for use as
at the year end, are disclosed as Capital Work-In Progress.
iii. In respect of Tangible Assets depreciation is provided on Straight
line basis applying the rates specified in schedule XIV of Companies
Act 1956 except Computer.
iv. Tangible Assets below Rs.10000 are fully depreciated in the year
of acquisition.
(c) Investment
Investments of long term-nature are stated at cost, less adjustment for
any diminution, other than temporary, in the value thereof. Current
Investment are stated at lower of cost or market value.
(d) Inventory
Finished and Semi-Finished Products produced and purchased by the
company are carried at Cost and net realisable value, whichever is
lower.
Work in Progress is carried at lower of cost and net realisable value.
Raw Material is carried at lower of cost and net realisable value.
Stores and Spares parts are carried at cost. Necessary provision is
made and expensed in case of identified obsolete and non moving items.
Cost of Inventory is generally ascertained on the ''Weighted average''
basis. Work in progress, Finished and semi finished products are
valued at on full absorption cost basis.
Cost Comprises expenditure incurred in the normal course of business in
bringing such inventories to its location and includes, where
applicable, appropriate overheads based on normal level of activity.
Packing Material is considered as finished goods. Consumable stores are
written off in the year of Purchase.
(e) Employee Benefits
Provision for Gratuity, Leave Encashment and bonus has not been made as
none of the employee have completed the minimum qualified period of
services.
(f) Impairment of Assets
At each balance sheet date, the management reviews the carrying amounts
of each cash generating unit to determine whether there is any
indication that those assets were impaired. If any such indication
exits, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss. Recoverable amount is higher
of an asset''s net selling price and value in use. In assessing value in
use, the estimated future cash flows expected from the continuing use
of the assets and from its disposal are discounted to their present
value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the
assets. Cash flows used to determine value in use are derived from
annual budgets and strategic plans of the cash generating units.
(g) Revenue Recognition
Sale are recognized on when substantial risks and rewards of ownership
in the goods are transferred to the buyer i.e. delivery as per terms of
sale.
(h) Other Income
Interest Income and income from Investments are accounted on accrual
basis.
Dividend Income is recognized when the right to receive dividend is
established.
(i) Foreign Currency Transactions
Transactions in Foreign Currency and Non-Monetary Assets are accounted
for at the Exchange Rate prevailing on the date of the transaction. All
monetary items denominated in Foreign Currency are converted at the
Year-End Exchange Rate. The Exchange Differences arising on such
conversion and on settlement of the transactions are recognized as
income or as expenses in the year in which they arise.
(j) Taxes on Income
Current Income Tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income Tax Act, 1961.
Deferred Tax is recognized for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized.
(k) Cash & Cash Equivalent
Cash & Cash Equivalent for the purpose of cash flow statement comprises
of cash at bank and in hand and short term investments/ bank deposits
with an original maturity of three months or less.
(l) Provisions
A Provision is recognized when company has a present obligation as a
result of past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
(m) Trade Receivables:
In respect of Receivable for Sundry Debtors (Incl. Receivable on Sale
of Investments) of Rs. 209.07 Lacs and Other Trade receivable, the
amount of Bad & Doubtful Debts are is not ascertainable on account of
non- receipt of confirmation from the party.
(n) In respect of loan and advances, the amount of bad and doubtful
debts is not ascertainable on account of non- receipt of confirmation
from the party.
(o) In the opinion of the Directors, Current Assets, Loans & Advances
have values at which they are stated in the Balance Sheet, if realized
in the ordinary course of business. The provision for depreciation and
all known liabilities is adequate.
(p) Sundry Creditors, Unsecured loans, other liabilities, loans and
advances, sundry debtors, and other current assets are subject to
confirmation.
(q) Micro Small & Medium Enterprise: The Company is in the process of
compiling the relevant information. Dues to Micro and small enterprises
have been determined to the extent such parties have been identified on
the basis of information collected by the management. This has been
relied upon by us.
(r) Claims, Demands and Contingencies :
Details of disputed and/ or contingent Liabilities are as
follows:
As on As on
31.03.2014 31.03.2013
Bank Guarantee - Expired 78,345 78,345
(Not Claimed by District Supply
Office)
Motor Spirit Tax-Disputed 92,50,463 92,50,463
(Remanded)
Income Tax Demanded-Disputed 1,58,27,752 1,66,66,195
Excise Duty - Disputed 8,87,65,288 8,87,65,288
(s) In the opinion of the Management, the Provident Fund and ESI act
are not applicable, hence no provision have been made for the same.
(t) Earning & Expenditure in Foreign Currency : Nil (P.Y. - Nil)
(u) Directors Remuneration : Nil (P.Y. - Nil)
(v) Auditors Remuneration : 60000 (P.Y.60000)
Mar 31, 2012
A. COPRORATE INFORMATION
Kavit Industries Ltd is public limited - listed company incorporated
in India under provision of Companies Act, 1956. The company''s strength
lies in business process of manufacturing of various petrochemical
downstream products such as specialty oils, petroleum sulphonates,
solvents, etc. for industrial applications such as rubber, leather, ink
and paint industries. It is well recognized as a ''Partner of Choice'' by
leading companies across the country.
B. Basis of preparation and presentation of financial statements
The accounts of the Company are prepared under the historical cost
convention on the accrual basis of accounting in accordance with the
generally accepted accounting principles in India ("GAAP") and
comply with the mandatory accounting standards notified under the
Companies (Accounting Standards) Rules, 2006, as amended, and with the
relevant provisions of the Companies Act, 1956. The financial
statements are presented in Indian rupees rounded off to the nearest
rupees.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of financial statements and the results of
operations during the reporting periods. Examples of such estimate
include future obligations under employee benefit plans, income taxes,
useful lives of fixed assets and intangible assets, impairment of
assets, provision for doubtful debts etc. Management believes that the
estimates used in the preparation of the financial statements are
prudent and reasonable. Actual results could vary from these estimates.
Appropriate changes in estimates are made as the management becomes
aware of the changes in circumstances surrounding the estimates. Any
revision to accounting estimates is recognized in the period in which
such results are known/ materialized. Effect of material changes is
disclosed in the notes to the financial statements.
During the year ended March 2012, the revised Schedule VI notified
under the Companies Act, 1956 has become applicable to the Company for
presentation of its financial statements. The adoption of revised
Schedule VI does not impact recognition and measurement principles
followed for preparation of financial statement. However, the revised
Schedule VI has a significant impact on the presentation and
disclosures made in the financial statements. The Company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
All assets and liabilities have been classified as current or non-
current as per the Company''s normal operating cycle and other criteria
set out in the revised Schedule VI to the Companies Act, 1956. Based on
the nature of products and the time between the acquisitions of assets
for processing and their realization in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current-noncurrent classification of assets and
liabilities.
C. SIGNIFICANT ACCOUNTING POLICIES:
a) Fixed Assets & Depreciation.
(i) Fixed assets are stated at cost less accumulated
depreciation/amortization. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
(ii) Fixed assets under construction, advances paid towards acquisition
of fixed assets and cost of assets not ready for use as at the year
end, are disclosed as capital work-in progress.
iii) Depreciation is provided on SLM basis at the rate and method
prescribed under schedule XIV of Companies Act 1956 except Computer.
b) Investments
Investments classified as long-term investments are stated at cost.
Diminution in the investment has not been worked out and provided.
c) Inventory
Inventory comprises of raw materials, Semi finished and Finished goods
are valued at Cost or net realisable Value, whichever is lower. Packing
Material considered as finish goods.
Consumable stores are written off in the year of Purchase.
d) Employee Benefits
Provision for gratuity has not been made as none of the employee have
completed the minimum qualified period of services.
e) Claims, Demands and Contingencies
Details of disputed and or contingent liabilities are not available.
f) Provision for Current and Deferred Tax :
i) Tax liability of the company is estimated considering the provision
of Income Tax Act, 1961.
ii) Deferred tax is recognized subject to consideration of prudence, on
timing difference being the difference between taxable incomes and
accounting income that originate in one period, and are capable of
reversal in one or more subsequent period(s). Such deferred tax is
quantified using rates and laws enacted or substantively enacted as at
the end of the financial year. In the absence of virtual certainty of
sufficient future taxable income, deferred tax assets are not
recognized in the account.
g) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
h) Revenue Recognition:
Revenue is recognized to the extent that it is probable that the
economics benefits will flow to the company and the revenue can be
reliably measured.
Sale of Goods :
Revenue is recognized when the significant risks and rewards of
ownership of the goods have passed to the buyer. Sales are reported net
of Sales Return, Sales Tax and Excise Duty.
Interest:
Revenue is recognized on a time proportion basis talking into accounts
the amount outstanding and the rate applicable.
i) Foreign currency transactions
Transactions in foreign currency and non-monetary assets are accounted
for at the exchange rate prevailing on the date of the transaction. All
monetary items denominated in foreign currency are converted at the
year-end exchange rate. The exchange differences arising on such
conversion and on settlement of the transactions are recognized as
income or as expenses in the year in which they arise.
D. Depreciation:
Company has not provided depreciation for the period under audit, as no
major business operation has carried out during the period of audit.
E. Trade Receivables:
In respect of Receivable for Sundry debtors (Incl Receivable on Sale of
Investments) of Rs. 369.71 Lacs : In absence of efforts made for the
recovery and confirmation from the party, we are unable to comment
whether all are considered good or Bad and doubtful.
In respect of Other Trade receivable, Balance are unconfirmed. No
provision has been made for Bad & Doubtful Debts.
F. In respect of loan and advances, there are no efforts made for the
recovery. No provision has been made for Bad & Doubtful Advances and
interest there on.
G. In the opinion of the Director, Current Assets, Loans & Advances
have value at which they are stated in the Balance Sheet, if realized
in the ordinary course of business. The provision for depreciation and
for all known liabilities is adequate and not in excess of the amount
reasonably necessary.
H. Sundry Creditors, Unsecured loans, other liabilities, loans and
advances, sundry debtors, and other current assets are subject to
confirmation and no exercise carried out to determine bad amount. If
any. Accounts of Debtors are unconfirmed and no amount realize since
F.Y.1999-2000. No provision has been made for Bad & Doubtful Debts.
I. Micro Small & Medium Enterprise: The company is in the process of
compiling the relevant information. As the relevant information is not
yet readily available and / or not given or confirmed by such
enterprise, it is not possible to give required information in the
accounts. However, in view of the management the impact of interest, if
any which may subsequently become payable to such enterprise in
accordance with the provision of the Act, would not be material and the
same, if any would be disclosed in the year of payments of interest.
Mar 31, 2010
A) Accounting convention
The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual basis
o) Fixed assets and depreciation
Fixed assets are stated at cost of acquisition less accumulated
depreciation
Depreciation is provided on SLM basis at the rate and method prescribed
under schedule XIV of companies Act 1956 on planet Machinery factory
Building air conditioner office Equipment Factory Laboratory Equipment
Furniture & Fixture -Factory
Depreciation is provided on WDV basis at the rate and method prescribed
under schedule XIV of companies Act 1956 on computer
c) Investments
Investment classified as long -term investment are stated at cost .
Diminution in the investment has not been worked out and provided
d) Inventory
Inventory comprised of raw materials semi finished and finished good
are valued at cost or net realisable value which is lower.
Quality remains unverified
Mar 31, 2008
A) Accounting Convention
The company generally follows mercantile system of accounting and
recognises significant items of income and expenditure on accrual
basis.
b) Fixed assets and depreciation
Fixed assets are stated at cost of acquisition less accumulated
depreciation.
Depreciation has not charged during the year, as the company has not
undertaken any activity during the year.
c) Investments
Investments classified as long-term investments are stated at cost.
Diminution in the investment has not been worked out and provided.
d) Inventory
Inventory comprises of raw materials Semi finished and Finished goods
are valued at Cost or net realisable value, whichever is lower.
Quantity remains unverified.
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