Notes forming part of the financial statements Note 1 Significant accounting policies 1.1 Basis of accounting and brparation of financial statements These Financial statements have been brpared to comply with the Generally Accepted Accounting principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are brpared on accrual basis under the historical cost convention. 1.2 Use of estimates The brparation of financial statement in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affects the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known /materialised. 1.3 Inventories Inventories are valued at the lower of cost and the net realisable value after providing for obsolescence and other losses ,if any. Cost of inventories comprises of cost of purchase,cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective brsent location and conditions. 1.4 Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances. 1.5 Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. 1.6 Debrciation and amortisation Debrciation on fixed assets is provided to the extent of Debrciable amount on the Written Down Value method (W.D.V). Debrciation is provided based on useful life of the assets as brscribed in Schedule II to the Companies Act,2013. 1.7 Revenue recognition Revenue from operation includes Sales of goods and services and adjusted for Sale returns and trade discounts and exclude sales tax and value added tax. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. 1.8 Fixed Assets Tangible Assets are stated at cost net of recoverable taxes, trade discounts and include amount added on revaluation , less accumulated debrciation and impairment loss, if any. The Cost of tangible Assets comprises its purchase price, levies and freight and any cost directly attributable to bringing the assets to its working condition for the intended use. Subsequent expenditures related to an item of tangible Assets are added to its book value only if they increase the future benefits from the existing assets beyond its brviously assessed standard of performance Intangible Assets are stated at cost of acquisition net of recoverable taxes, less accumulated debrciation and impairment loss, if any. The Cost of intangible Assets comprises purchase price and any cost directly attributable to bringing the assets to its working condition for the intended use. 1.9 Foreign currency transactions and translations Foreign exchange transactions are accounted at the exchange rates brvailing on the date of the transaction. Realised gains and losses on foreign exchange transactions during the year are recognized in the Profit & loss account. Foreign currency monetary assets and liabilities are translated at year-end rates and resultant gains/losses on foreign exchange transactions are recognised in the Profit & loss account. 1.10 Investments Investment that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investment are carried at cost. 1.11 Employee benefits The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made. Gratuity liability is defined benefit obligations and is provided for on the basis of an actruial valuation made at the end of the each financial year. Provision for compensated absence are provided for based on the estimates. Long term compensated leave are provided for based on actruial valuation at the year end. Actruial gain/losses are immediately taken to profit and loss account and are not deferred. The Company's contributions to State plans namely Employee State Insurance Fund and employees Pension Scheme are charged to Profit & Loss Account. 1.12 Borrowing costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. 1.13 Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed debrciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. 1.14 Impairment of assets An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss statement in the year in which an asset is identified as impaired. The Impairment loss recognised in prior accounting period is reversed if there have been a change in the estimate of recoverable amount. 1.15 Derivative contracts In respect of Derivative contracts, Premimum paid, gain/losses on settlements are recognized and charged to Profit & Loss account. 1.16 Amalgamation Expenditure Amalgamation expenses shown under other non-current assets are amortised over a period of ten years. 1.17 Contingent Liability Contingent liabilities in respect of show cause notices received is considered only when they are converted into demands. Payments in respect of such demands, if any are shown as advances. Contingent liabilities under various fiscal laws includes those in respect of which the company/ Department is in appeal. No Provision is made for a liability which is contingent in nature but if material is disclosed in the financial statement by way of notes. 2. Deferred Tax No provision for deffered tax assets has been provided by the Company, as there is no certainity that there will sufficient future taxable income to realise such assets. 3. In pursuance of Collaboration Agreement dated 23-05-2007 entered into by the Company with RPS Infrastructure Limited (RPS) for development of IT Park on Company's land situated at 12/6 Mathura Road, Faridabad, the Company executed mortgage on the said land as security for loan raised by RPS Infrastructure Limited from two banks, which include Oriental Bank of Commerce,the banker and charge holder of assets of the Company and member of consortium of banks of the Company and United Bank of India for construction of IT Park at the above said land. The aforesaid loan availed by RPS Infrastructure Limited was though expected to be utilized for development of IT Park on the aforesaid land. but Neither M/s RPS Infrastructure Ltd nor the Banker i.e Oriental Bank of Commerce and United Bank of India are providing any detail for end use of the loan disbursed to RPS. The Company have filed a writ petition vide No. 7354/2013 before the Hon'ble High Court Delhi for availing details basis of loan disbursement and its utilization on construction of IT Park and the same has been disposed off on dated 29.09.2014. 4. As at the Balance Sheet date, the accumulated losses of the Company are more than fifty percent of its net worth in the current financial year and in the brvious year also. The Company has made a Reference to the Hon'ble Board for Industrial & Financial Reconstruction (BIFR) pursuant to the provisions of Sick Industrial Companies (Special Provision Act,1985), and the Hon'ble Board have decided abatement and the Company has filed an appeal before AAIFR and was also dismissed on dated 10.12.2014. 5. The brvious year's figure have been regrouped/reclassified, wherever considered necessary to make comparable with the current year figures. As per our Audit Report of even date attached for M.M. Goyal & Co. Chartered Accountants Firm's Registration Number: 007198N sd/- M.M. Goyal Partner Membership No. 86085 For and on behalf of the Board of Directors sd/- J.P. Aggarwal sd/- Chairman & MD sd/- Vishal Aggarwal Joint Manging Director sd/- Sumit Garg Company Secretary sd/- Anil Jodhani Aggarwal Chief Financial Officer Place: New Delhi Date: May 29, 2015 |
