NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30th June 2015 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES A) ACCOUNTING CONCEPTS: The financial statements have been brpared to comply in all material respects of the accounting standards specified under section 133 of the Companies Act, 2013 read with rule 7 of the Companies Act Rules 2014. The Company follows the Mercantile System of Accounting and recognises Income and Expenditure on accrual basis except given below. The accounts are brpared on historical cost basis, as a going concern, and are consistent with generally accepted accounting principles. The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious Year. Dividend, Interest on National Saving Certificates and other claims including insurance claims, are accounted for on cash basis. B) USE OF ESTIMATES: The brparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reportable amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the reportable amount of revenue and expenses during the reporting year end. Differences between the actual results and estimates are recognised in the year in which the results are known / materialised. C) FIXED ASSETS AND DEbrCIATION i) Fixed assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the relevant assets. Technical know-how fees, interest on borrowed funds attributable to acquisition/construction of fixed assets and related br-operative expenses up to the date of commencement of commercial production, net of sales of trial production, are also capitalised wherever considered appropriate. Cenvat and VAT availed has been deducted from the cost of respective assets. ii) Projects under Commissioning and other Capital Works-in-Progress are carried at cost, comprising direct cost, related incidental expenses and Interest on borrowings to the extent attributed to them. iii) Debrciation on Fixed Assets is provided on straight-line method at the rates specified in Schedule II to the Companies Act, 2013. Debrciation on the assets costing up to Rs.5000/- is provided in full in the year of acquisition. Debrciation on adjustment to fixed assets due to fluctuation in foreign currency is amortised over the residual life of the assets. iv) Debrciation on revaluation part is transferred from Revaluation Reserve to Profit & Loss account for the year. v) Leased Assets: a) Assets given on operating lease are capitalised in the manner stated in 2 (i) above. b) Initial direct cost are charged off to the profit & loss account c) The lease rentals in respect of assets given or taken on operating Lease are accounted for on accrual basis, which has been arrived at on the basis of contracts entered with the lessee or lessor as the case may be. D) IMPAIRMENT OF ASSETS The carrying amounts of fixed assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount and the same is recognized as an expense in the statement of Profit & Loss and Carrying amount of the asset is reduced to recoverable amount. Reversal of impairment losses recognized in prior periods is recorded when there is an indication that the impairment losses recognized for the assets no longer exists or have decreased. E) RESEARCH AND DEVELOPMENT Revenue Expenditure is charged to Profit & Loss Account of the year in which they are incurred. Capital Expenditure is capitalised. F) REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sales of goods Gross Turnover as reported is inclusive of Excise Duty recovered from Customers but net of rejection and rebates. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. G) INVENTORIES Valuation of stocks is done as mentioned below: Raw Material, Stores & Spares and Packing Material :at lower of cost or net realisable value Plates & Dies, Production Scrap :at estimated realisable value Work-in-Process :at lower of estimated cost or net realisable value Finished Goods :at lower of cost or net realisable value a) Cost is arrived at using monthly weighted average method. b) Cost of Finished Goods is inclusive of Excise Duty. H) INVESTMENTS i) Investments are classified as Long Term Investments and Current Investments. Long Term Investments are stated at cost less permanent diminution in value, if any. Current Investments are stated at lower of cost or net realisable value. ii) Investment in subsidiaries are valued at cost less provision for impairment. Investment are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. I) FOREIGN EXCHANGE TRANSACTIONS In accordance with the revised Accounting Standard 11 'Effects of the Changes in Foreign Exchange Rates' read together with subsequent clarification issued by the Institute of Chartered Accountants of India: i) Transactions denominated in foreign currencies are normally recorded at the exchange rate brvailing at the time of Transaction. All the monetary assets and liabilities remaining unsettled at the year-end are restated at the year-end rates. ii) All long term foreign currency monetary items consisting of loans which relate to acquisition of debrciable capital assets at the end of the year have been restated at the rate brvailing at the balance sheet date. The difference arising as a result has been added to or deducted from the cost of assets as per the notification issued by the ministry of corporate affairs dated March 31, 2009. Exchange rate difference on other long term foreign currency loans is carried to 'Foreign Currency Monetary Item Translation Difference Account' to be amortised upto the period of loan or upto March 31, 2020, whichever is earlier. iii) Any income or expenses on account of exchange difference either on settlement or on translation other than as mentioned in (ii) above is recognised and is reflected separately in the Profit & Loss account. iv) Non-monetary foreign currency items are carried at cost. J) RETIREMENT BENEFITS AND LEAVE ENCASHMENT i) The company has a LIC Policy taken through its Gratuity Trust to cover the gratuity liability of its employees. Similarly, in respect of manager and above grade, liability towards Superannuation is also considered based on the LIC policy taken for that purpose. The Liability is accounted for on the basis of actuarial valuation made at the end of financial year and charged to profit and loss account. ii) The un-availed leaves, to the credit of employees are accounted for on the basis of actuarial valuation made at the end of the each financial year and are charged to Profit & Loss Account. K) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements. L) BORROWING COST: a. Borrowing cost on working capital requirement is charged off to revenue in the year in which they are incurred. b. Borrowing Cost, which is directly attributable to the acquisition, construction of Fixed Assets is capitalised as part of the assets. M) EXPORT BENEFITS Export benefits against the Duty paid imported materials are recognised to the extent of exports made during the year. N) INCOME TAXES Tax expense comprises of current, and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income tax reflects the impact of current period timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realised. If the Company has unabsorbed debrciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits. At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the period in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit amount of MAT credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period. O) SEGMENT REPORTING POLICIES Identification of segments The analysis of business segments is based on the nature of products and services provided. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate. The Company operates in two business segment viz carton manufacturing and machine manufacturing. P) EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit and loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive. 26. Contingent Liabilities in respect of : (a) Bank Guarantee issued Rs 6.32 Lacs (Previous Year 6.32 Lacs). (b) Excise matters: Rs. 8.13 lacs (brvious year Rs 33.74 lacs). (c) Sales Tax Matters : RS. 40.88 Lacs ( Previous year Rs 15.57 Lacs). 27. In the opinion of the Board of Directors, the current assets and loans & advances, if realized in the ordinary course of business, would be realized at least equal to the amounts at which these have been stated in the balance sheet. Further, provision for all known liabilities has been made in the books of accounts. 28. In the matter of interest and demages levied by Regional Provident Fund Commissioner Faridabad, the company has filed an appeal with Provident Fund Tribunal in delhi involving a demand of Rs 142.68 Lacs. The company has already deposited a sum of Rs 62.26 Lacs against the above demand. 39 Impairment of Fixed Assets: In accordance with Accounting Standard (AS-28) on 'Impairment of Assets' notified by Companies (Accounting Standards) rules 2006, the Company has reassessed its fixed assets and is of the view that no further impairment/ reversal is considered to be necessary in view of its expected realisable value. 40 a) Previous year figures have been re-grouped and/or Re-arranged, where-ever cosidered necessary. b) All figures or amount, including those in the notes to accounts have been rounded upto the nearest thousand, except wherever specifically mentioned. As per our report of the even date attached. FOR MANOJ MOHAN & ASSOCIATES Firm Registration No. 009195C Chartered Accountants Sd/- (M. K. AGARWAL) Partner (Membership No. 76980) Sd/- PANKAJ MAHENDRU Company Secretary Sd/- AJAY KUMAR CFO Sd/-PYUSH GUPTA Director Sd/- SAGATO MUKERJI Whole-time Director Place : New Delhi Dated : 27th August, 2015 |
