Notes to Accounts of Sacheta Metals Ltd.

Mar 31, 2018

1. COMPANY OVERVIEW

Sacheta Metals Ltd (herein referred to as the company) is Public Limited Company established in the year 1990. The Registered Office and Manufacturing Unit of Company is situated at Sacheta Udyog Nagar, Opp.College, Mahiyal, TALOD-383215 Gujarat. Corporate Office is situated at the Business Capital Centre of India Mumbai @ Sakseria Industrial Estate, S.V.Road, Malad (West), Mumbai 400064 (INDIA). The company is one of the major manufacturers & exporters of Aluminium, Stainless and mild steel Houseware kitchenware Utensils - Casting - Sheet - Coils - Circles, Non Stick Cookware - Pressure Cooker, Foil Chaquered sheet, PP Caps / Slug & other Houseware & also Stainless Steel Kitchenware in India.

2. BASIS OF PREPARATION AND MEASUREMENT

i. Statement of Compliance

The financial statements as at end of the financial year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

For all the periods upto and including the financial year ended March 31, 2017, the Company prepared its financial statements in accordance with requirement of previous GAAP, which includes accounting standards notified under the section 133 of the Companies Act 2013 read together with Companies (Accounting Standards) Rules, 2006. The Date of transition to Ind AS is April 01, 2016. These financial statements for the financial year ended March 31, 2018 are Company’s first Ind AS financial statements. The disclosure relating to Ind AS 101, First-time adoption of Indian Accounting Standards have been given in Note no.4

ii. Accounting Convention and Basis of Measurement

The financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:

a. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments)

b. Defined benefit and other long-term employee benefits.

iii. Functional and Presentation Currency

The financial statements are presented in Indian rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in Indian rupees has been rounded to the nearest rupee except share and earning per share data.

iv. Use of Judgements, Estimates and Assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities and assets. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies, as well as estimates and assumptions in respect of the following areas, that have most significant effect to the carrying amounts within the next financial year are included in the relevant notes.

a. Useful lives of property, plant, equipment and intangibles

b. Measurement of defined benefit obligations

c. Measurement and likelihood of occurrence of provisions and contingencies

d. Recognition of deferred tax assets.

e. Impairment of intangibles

f. Expenditure relating to research and development activities.

v. 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.

3. FIRST TIME ADOPTION OF IND AS

These financial statements of Sacheta Metals Limited, for the financial year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - first time adoption of Indian Accounting Standards, with effect from April 01, 2016 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The Accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ending March 31, 2018 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s Balance sheet, statement of profit and loss, is set out in note 6. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101, have been set out in note 5.

4. EXEMPTIONS AVAILED ON FIRST TIME ADOPTION OF IND AS 101

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS and exemptions from other Ind AS. The Company has accordingly applied the following exemptions.

a) Deferred Government Grants

The Company is permitted to apply the requirements under Ind AS 109, financial instruments and Ind AS 20, accounting for government grants and disclosure of government assistance, prospectively to government loans existing at the date of transition to Ind AS.

b) Property, Plant and Equipment and Intangibles

The Company may elect to use the previous GAAP carrying amount as the deemed cost for measurement of items of property, plant and equipment and intangibles assets at the date of transition to Ind AS. Accordingly the Company adopted the previous GAAP carrying amount that existed at the date of transition to Ind AS.

5. RECONCILIATIONS

The following reconciliations provide the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

A. Equity as at April 01,2016 and March 31,2017

B. Net Profit for the year ended March 31,2017

Note : - (Working Capital Advances from SBI Mumbai are secured by HYPOTHECATION / PLEDE OF Companies entire Goods. Movable & other Assets Such as book Debts Oustanding Monies, Receivable, claims. Bills. Invoice, Documetns, Contracts, Securities, Investments, & Rights all presents and future secured by : 1.Equitable Mortgage of Company’s factory, C & B at block No. 33, Village Mahiyal. Talod (2) Hypothecation of Entire movable Machinery of the Company ). Mr. S.K.Shah & Mrs. C.S.Shah, directors of Company gave personal Guarantee.

Note - 6 : Disclosure as per Ind AS-19 - Employee benefits

Defined Contribution Plan

Contribution to defined Contribution Plan includes Providend Fund. The expenses are recognized for the year as under.

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, retirement or death, whichever is earlier. The benefit vests after 5 years of continuous service. As there are frequent changes in workers/ employees, the company record retirement benefits on cash basis.

Note- 7: Disclosure as per Ind AS-108 Operating segments:

The Company operates mainly in manufacturing of Aluminium Products and all other activities are incidental thereto, which have similar risk and return. Accordingly, there are no separate reportable Segment as required under Ind AS 108 “ Operating Segment. The Company has identified geographical segments based on location of customers as reportable segments in accordance with Ind AS 108 issued by ICAI.

Note -8: Information on Dividend for the Year

Dividends proposed or declared after balance sheet date but before the financial statement have been approved by the Board of Directors for issue are not recognized as a liability at the balance sheet. However when the company published result to BSE, the company had made provision for proposed dividend which is later on rectified and to that extent balances of other equity and provisions are differed.

Note- 9: Disclosure as per Ind As-24- Related Party Disclosureselated party disclosures as required under Ind AS 24, “Related Party Disclosures”, are given below:

Note -10: Previous year figures as per previous GAAP have been regrouped / re arranged / reclassified wherever considered necessary to conform to the classifications / disclosures of the current year

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Mar 31, 2016

NOTE :1. . Other Notes Related to Financial Statements.:

(1) Previous year’s figures have been rearranged / regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities:

The Company has preferred an appeal against order of VAT Department for Financial Year 2008-09 for demand of Rs. 43,55,009. Against this demand the company has deposited VAT /CST of Rs. 690124 and submitted bank guarantee of Rs. 1025000.

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

(5) In accordance with the Accounting Standard “Related Party Disclosures” (AS-18) issued by The Institute of Chartered Accountants of India which came into effect from1st April, 2001, the names of related parties with relationship and transactions with them are disclosed as under :

1. Relationship :

i ). EskayAlluminium Pvt. Ltd.

Company Under the same Management

ii). P.D.R. Casting Industries

Proprietorship concern of a Director, Chetnaben Shah

iii). Sacheta International,

Proprietorship concern of a Director, Satishbhai K.Shah

iv). Suryoday Trading Co.

Proprietorship concern of a Director''s Relative, Shalini Shah

v). Pranav Trading Co.

Proprietorship concern of a Director, Satishbhai.

vi).Key Management personnel

1 Shri Satish K. Shah - Chairman Cum Managing Director

2 Smt. Chetana S. Shah - Jt. Managing Director

3 Ankit S. Shah - Executive Director

2. Pranav S. Shah- Executive Director

(6) Earnings per Share :

Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year the number used in calculating basic and earnings per equity share are as stated below:

(7). Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Company’s primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment.

As far as geographical Segments are concerned, the company has bifurcated the activities into two parts viz Internationals Domestic

Gross results of Geographical Segments. ( Figures Rs. In Lacs )

(8) The Company has started research & development unit wherein the company has incurred a revenue expenditure of Rs. 171563 and capital expenditure of Rs. 106740 on account of research & development.

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Mar 31, 2015

(1) There was no impairment loss on fixed assets on the basis of review carried out by the Management in accordance with AS – 28 issued by the Institute of Chartered Accountants of India.

a. Terms / Rights attached to equity shares :

The Company has Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Share is entitled to one vote per share.

NOTE : - (Working Capital Advances from SBI Mumbai are secured by HYPOTHECATION/PLEDE OF Companies entire Goods. Movable & other Assets Such as book Debts Outstanding Monies, Receivable, claims. Bills. Invoice, Documents, Contracts, Securities, Investments, & Rights all presents and future secured by : 1.Equitable Mortgage of Company's factory, C & B at block No. 33, Village Mahiyal. Talod (2) Hypothecation of Entire movable Machinery of the Company). Mr. S.K.Shah & Mrs. C.S.Shah, directors of Company gave personal Guarantee.

** Sales shown as net of Excise Duty, Credit/Utilisation of Excise Duty Pass/ Rotate Through Balance Sheet.

(2) The company has issued 65,62,500 Equity shares including 107500 forfeited shares on preferential basis during the year 2010-11. It had incurred an amount of Rs.5,00,000 towards preliminary expenses on account of issue of shares. Amount of Rs.1,00,000 being 1/5th is written of during the year.

(3) In accordance with the Accounting Standard "Related Party Disclosures" (AS-18) issued by The Institute of Chartered Accountants of India which came into effect from1st April, 2001, the names of related parties with relationship and transactions with them are disclosed as under :

1. Relationship :

i) Eskay Aluminum Pvt. Ltd.

Company Under the same Management

ii) P.D.R. Casting Industries

Proprietorship concern of a Director, Chetnaben.

iii) Sacheta International

Proprietorship concern of a Director, Satishbhai

iv) Suryoday Trading Co.

Proprietorship concern of a Director, Shalini Shah

v) Pranav Trading Co.

Proprietorship concern of a Director, Satishbhai

NOTE - 4 : OTHER NOTES RELATED TO FINANCIAL STATEMENTS :

(1) Previous years figures have been rearranged / regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities

(i) The Company has preferred an appeal against order of VAT Department for Financial Year 2008-09 for demand of Rs. 43,55,009. Against this demand the company has deposited VAT /CST of Rs. 690124 and submitted bank guarantee of Rs. 1025000.

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

vi) Key Management personnel

1. Shri Satish K. Shah – Chairman Cum Managing Director

2. Smt. Chetana S. Shah – Jt. Managing Director

3. Ankit S. Shah – Executive Director

4. Pranav S. Shah- Executive Director

5. Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Company's primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment. As far as geographical Segments are concerned, the company has bifurcated the activities into two parts viz.

1. Internationals

2. Domestic

6. The Company has started research & development unit wherein the company has incurred a revenue expenditure of Rs. 218827 and capital expenditure of Rs. 756414 on account of research & development.

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Mar 31, 2014

NOTE :

(Working Capital Advances from SBI Mumbai are secured by HYPOTHECATION/PLEDE OF Companies entire Goods. Movable & other Assets Such as book Debts Oustanding Monies, Receivable, claims. Bills. Invoice, Documetns, Contracts,Securities, Investments, & Rights all presents and future secured by : 1.Equitable Mortgage of Company''s factory, C & B at block No. 33, Village Mahiyal. Talod (2) Hypothecation of Entire movable Machinery of the Company ). Mr. S.K.Shah & Mrs. C.S.Shah, directors of Company gave personal Guarantee.

NOTE - 2 : OTHER NOTES RELATED TO FINANCIAL STATEMENTS :

(1) Previous years figures have been rearranged / regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities

(i) The Company has preferred an appeal against order of VAT Department for Financial Year 2008-09 for demand of Rs. 43,55,009. Against this demand the company has deposited VAT /CST of Rs. 690124 and submitted bank guarantee of Rs. 1025000.

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

(5) Payment to Auditors includes :

2013-14 2012-13

Audit Fees 70000 70000

Tax Audit Fees 4000 4000

For Taxation Matters 3000 3000

77000 77000 (6) The company has issued 65,62,500 Equity shares including 107500 forfeited shares on preferential basis during the year 2010-11. It had incurred an amount of Rs.5,00,000 towards preliminary expenses on account of issue of shares. Amount of Rs.1,00,000 being 1/5th is written of during the year.

(7) Prior Year Adjustments represents:

Particulars 2013-14 2012-13

a) Sundries -- 58321 58321

(8) In accordance with the Accounting Standard "Related Party Disclosures" (AS-18) issued by The Institute of Chartered Accountants of India which came into effect from1st April, 2001, the names of related parties with relationship and transactions with them are disclosed as under :

1. Relationship :

i) Eskay Alluminium Pvt. Ltd.

Company Under the same Management

ii) P.D.R. Casting Industries

Proprietorship concern of a Director, Chetnaben.

iii) Sacheta International

Proprietorship concern of a Director, Satishbhai

iv) Suryoday Trading Co.

Proprietorship concern of a Director, Shalini Shah

v) Pranav Trading Co.

Proprietorship concern of a Director, Satishbhai

vi) Key Management personnel

1. Shri Satish K. Shah – Chairman Cum Managing Director

2. Smt. Chetana S. Shah – Jt. Managing Director

3. Ankit S. Shah – Executive Director

3. Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Company''s primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment. As far as geographical Segments are concerned, the company has bifurcated the activities into two parts viz

1. Internationals

2. Domestic

4. The Company has started research & development unit wherein the company has incurred a revenue expenditure of Rs. 287430 and capital expenditure of Rs. 2213524 on account of research & development.

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Mar 31, 2013

(1) Previous years figures have been rearranged / regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities

(i) The Company haspreferred an appeal against order of VAT Department for Financial Year 2008-09 for demand of Rs. 9061429. Against this demand the company has depositedVAT /CST of Rs. 416143 and submitted bank guarantee of Rs. 750000.

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

(5) The company has issued 65,62,500 Equity shares including 107500 forfeited shares on preferential basis during the year 2010-11. It had incurred an amount of Rs.5,00,000 towards preliminary expenses on account of issue of shares. Amount of Rs.1,00,000 being 1/5th is written of during the year.

(6) In accordance with the Accounting Standard "Related Party Disclosures" (AS-18) issued by The Institute of Chartered Accountants of India which came into effect fromlst April, 2001, the names of related parties with relationship and transactions with them are disclosed as under:

1. Relationship:

i) EskayAlluminium Pvt. Ltd.

Company Under the same Management

ii) P.D.R. Casting Industries

Proprietorship concern of a Director, Chetnaben.

iii) Sacheta International

Proprietorship concern of a Director, Satishbhai

iv) Suryoday Trading Co.

Proprietorship concern of a Director, Shalini Shah

v) Pranav Trading Co.

Proprietorship concern of a Director, Satishbhai

vi) Key Management personnel

1. Shri Satish K. Shah - Chairman Cum Managing Director

2. Smt. Chetana S. Shah - Jt. Managing Director

3. Ankit S. Shah - Executive Director

2. The following transactions were carried out with the related parties in the ordinary course of business. Details relating to parties referred in item 1(i),(ii),(iii),(iv) and (v):

7. Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Company''s primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment. As far as geographical Segments are concerned, the company has bifurcated the activities into two parts viz

1. Internationals

2. Domestic

Gross result of geographical segments.

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Mar 31, 2012

(1) There was no impairment loss on fixed assets on the basis of review carried out by the Management in accordance with AS -28 issued by the Institute of Chartered Accountants of India.

a. Terms I Rights attached to equity shares :

The Company has Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Share is entitled to one vote per share.

NOTE:

(Working Capital Advances from SBI Mumbai are secured by HYPOTHECATION/PLEDE OF Companies entire Goods. Movable & other Assets Such as book Debts Oustanding Monies, Receivable, claims. Bills. Invoice, Documetns, Contracts,Securities, Investments, & Rights all presents and future secured by : 1.Equitable Mortgage of Company's factory, C & B at block No. 33, Village Mahiyal. Talod (2) Hypothecation of Entire movable Machinery of the Company ). Mr. S.K.Shah & Mrs. C.S.Shah, directors of Company gave personal Guarantee.

NOTE - 2 : OTHER NOTES RELATED TO FINANCIAL STATEMENTS :

(1) Previous years figures have been rearranged / regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities

(i) The Company had preferred an appeal with the stamp duty authority for the earlier demand which was reduced to Rs. 22050. No provision has been made for this demand in the books of account. The amount of Rs. 5615 paid for stamp duty is shown in the balance sheet under the head "LOANS & ADVANCES".

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

(5) The company has issued 26,61,700 Equity Shares on preferential basis during the year 2007-08. had incurred an amount of Rs.9,73,420 towards preliminary expenses on account of issue of shares. Amount of Rs.1,94,684 being 1 /5th is written of during the year. Moreover the company has issued 65,62,500 Equity shares including 107500 forfeited shares on preferential basis during the year 2010-11. It had incurred an amount of Rs.5,00,000 towards preliminary expenses on account of issue of shares. Amount of Rs.1,00,000 being 1/5th is written of during the year.

(6) In accordance with the Accounting Standard "Related Party Disclosures" (AS-18) issued by The Institute of Chartered Accountants of India which came into effect from 1st April, 2001, the names of related parties with relationship and transactions with them are disclosed as under:

1. Relationship:

i) Eskay Alluminium Pvt. Ltd.

Company Under the same Management

ii) P.D.R. Casting Industries

Proprietorship concern of a Director, Chetnaben.

iii) Sacheta International . Proprietorship concern of a Director, Satishbhai.

iv) Pranav Trading Co.

Proprietorship concern of a Director, Satishbhai

v) Key Management personnel

1. Shri Satish K. Shah - Chairman Cum Managing Director

2. Smt. Chetana S. Shah - Jt. Managing Director

3. Ankit S. Shah - Executive Director

7. Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Company's primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment.

As far as geographical Segments are concerned, the company has bifurcated the activities into two parts v'z

1. Internationals

2. Domestic

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Mar 31, 2010

OTHER NOTES:

(1) Previous years figures have been rearranged /regrouped / recast wherever necessary.

(2) Balances due to or due by the parties are subject to confirmation.

(3) Contingent Liabilities

(i) The Company had preferred an appeal with the stamp duty authority for the earlier demand which was reduced to Rs. 22050. No provision has been made for this demand in the books of account. The amount of Rs. 5615 paid for stamp duty is shown in the balance sheet under the head "LOANS & ADVANCES".

(4) In the opinion of the Board and to the best of their Knowledge and belief, the value of the realization of current assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the balance sheet.

(5) Managerial Remuneration of Rs.605955/- including perquisites of Rs. 107955/- (Previous year Rs.551501) has been paid during the year.

(6) The company has issued 26,61,700 Equity Shares on preferential basis during the year 2007-08. It had incurred an amount of Rs.9,73,420 towards preliminary expenses on account of issue of shares. Amount of Rs.1,94,684 being 1/5* is written of during the year.

(7) In accordance with the Accounting Standard "Related Party Disclosures" (AS-18) issued by The Institute of Chartered Accountants of India which came into effect from 1st April, 2001, the names of related parties with relationship and transactions with them are disclosed as under:

1. Relationship:

i) EskayAlluminium Pvt. Ltd.

Company Under the same Management

ii) P.D.R. Casting Industries

Proprietorship concern of a Director. Chetnaben.

iii) Sacheta International

Proprietorship concern of a Director, Satishbhai.

iv) Ankit Trading Company.

Proprietorship concern of Director, Ankit Shah.

v) Key Management personnel

1. Shri Satish K. Shah - Chairman Cum Managing Director

2. Smt. Chetana S. Shah - Jt. Managing Director

3. Ankit S. Shah - Executive Director

(8) Segment information :

Based on the guiding principles given in AS-17 on Segments Reporting issued by the Institute of the Chartered Accountants of India. The Companys primary Business Segments is manufacturing of utensils. This being the single Segment, the company has not made Reporting as per business Segment.

As far as geographical Segments are concerned, the company has bifurcated the activities into two parts viz.

1. International

2. Domestic