SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016 1. BASIS OF ACCOUNTING AND brPARATION OF FINANCIAL STATEMENTS The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize. 2. SIGNIFICANT ACCOUNTING POLICIES a) Fixed Assets i) Tangible Assets: Fixed Assets are recorded at cost of acquisition / construction less accumulated debrciation and impairment losses, if any. Cost comprises of the purchase price and attributable cost of bringing the Assets to its working condition for its intended use, but excludes Cenvat / Service Tax / VAT credit availed. ii) Intangible Assets: Intangible Assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. b) Borrowing Cost Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds and exchange differences arising from foreign currency borrowing to the extent that they are regarded as an adjustment to interest costs. Financing costs relating to borrowed funds attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets are included in the cost of the assets to which they relate. c) Debrciation & Amortisation Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Debrciation on Plant & Machineries has been provided on the straight-line method and on written down value on all other fixed assets as per the useful life brscribed in Schedule II to the Companies Act, 2013. Intangible Assets are amortised using the Straight-Line Method over estimated useful life as under :- i) Software & Licenses : over a period of six (6) years ii) Technical Know-How : over a period of six (6) years from the date of actual production d) Inventories Inventories are valued at the lower of cost (e.g. on FIFO / weighted average basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-Progress and Finished Goods include appropriate proportion of overheads and, where applicable, excise duty. The Cost of Inventories is arrived at on the following basis: Raw Materials and Stores : Weighted Average Cost. Stock-in-Process : Raw Materials at Weighted Average Cost & absorption of Labour and Overheads Finished Goods : Raw Materials at Weighted Average Cost & absorption of Labour and Overheads. ) Investments Investments are generally of long term nature and are stated at cost unless there is other than temporary diminution in their value as at the date of Balance Sheet. Investments in overseas Associates / Subsidiary are stated at cost of acquisition. I Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized 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 recognized but are disclosed in the notes to the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. l) Research and Development Expenses All revenue expenditure related to R & D, including expenses in relation to development of product/ processes, are charged to the Statement of Profit and Loss in the period in which they are incurred. Capital expenditure on research and development is classified separately under tangible/intangible assets and debrciated on the same basis as other fixed assets. i) Revenue Recognition i) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of goods are transferred to the customer, which is generally on dispatch of goods. Sales are net of discounts, VAT/ Sales tax and returns; Excise Duties collected. ii) Credits are taken for claims in respect of cost escalation and extra work as and when and to the extent admitted by customers. iii) Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. iv) Dividend from investments in Shares is accounted for when the right to receive dividend is established. v) Export incentives are accounted for as and when the claims thereof have been admitted by the authorities. vi) Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists. Foreign Currency Transactions Transactions denominated in foreign currencies are recorded at the exchange rate brvailing at the time of the transaction. Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates. In case of items, which are covered by forward exchange contracts, the difference between the year-end rate and the rate on the date of contract is recognized as exchange difference and the brmium paid on forward contracts is recognized over the life of the contract. Non-monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss. i Retirement Benefits Defined Contribution Plan : The Company's contributions paid/payable for the year to Provident Fund and ESIC are charged to the Statement of Profit and Loss for the year. Defined Benefit Plan : The Company's liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight-line basis over the average period until the amended benefits become vested. Recognized immediately in the statement of profit and loss account as income or expense. Obligation is measured at the brsent value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation. ) Impairment of Assets Fixed Assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is then recognized for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an asset's net selling price and value in use. Accounting for Tax (a) Current Tax is accounted on the basis of estimated taxable income for the current accounting year and in accordance with applicable tax rates and the provisions of Income Tax Act, 1961. (b) Deferred Tax resulting from "timing differences" between accounting and taxable profit for the period is accounted by using tax rates and laws that have been enacted or substantially enacted as at the Balance Sheet date. Deferred Tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. Net Deferred Tax Liability is arrived at after setting off Deferred Tax Assets 1. PROPOSED DIVIDEND The Board of Directors have proposed equity dividend of Rs. 1.10 (Previous Year Rs. 1.10) per equity share of Rs. 2.00 each. The aggregate amount of equity dividend proposed to be distributed is Rs. 1,442.23 Lacs (Previous Year Rs. 1,449.03 Lacs) Including Dividend Distribution Tax of Rs. 243.94 Lacs (Previous Year Rs. 250.74 Lacs). 2. Figures of brvious year are regrouped and recast wherever necessary. As per our report of even date attached For and on behalf of THACKER BUTALA DESAI Chartered Accountants Firm Regi. No. 110864W M. T. Desai Partner M. No. 030911 For and on behalf of the Board of Directors Prayasvin Patel Chairman and Managing Director DIN : 00037394 Rajat Jain Chief Financial Officer Jal Patel Director DIN : 00065021 Parthiv Parikh Company Secretary Place : Vallabh Vidyanagar Date : 27-04-2016 |
