| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory F.Y.2015-16:
1. SIGNIFICANT ACCOUNTING POLICIES:
A.General:
(I)The accounts of the Company are brpared under the historical cost convention using the accrual method of accounting. However, other than cash compensatory incentives are accounted on the basis of receipt.
(II)Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.
B.Use of Estimates:
The brsentation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management’s evaluation of relevant facts and circumstances as on the date of financial statement. The actual outcome may diverge from these estimates.
C.Details of Shareholder holding more than 5% Equity shares in company:
| Year | 2015-16 (As on 31.03.16) | | 2014-15 (As on 31.3.15) | | | Name of the share holder | No. Of Shares | % held | No. Of Shares | % held | | Dineshsinh B Chavda | 1960600 | 23.15% | 1960600 | 23.93% | | Hansaben D Chavda | 990000 | 11.69% | 1451000 | 17.71% | | Vijaysinh D Chavda | 611000 | 7.21% | 150000 | 1.83% | | Sanginita Industries Pvt. Ltd. | 46,23,944 | 54.61% | 43,48,944 | 53.08% |
D.Reporting of Equity share outstanding at the beginning and at the end of the reporting period:
| Particulars | 2015-16 | 2014-15 | | (Figures are in lacs) | | | | At the beginning of the year | 819.28 | 819.28 | | Add Issue During the Year | 27.5 | - | | Outstanding at the end of the year | 846.78 | 819.28 | | (Figures of shares are in numbers) | | | | At the beginning of the year | 81,92,800 | 81,92,800 | | Add Issue During the Year | 2,75,000 | - | | Outstanding at the end of the year | 84,67,800 | 81,92,800 |
E.Fixed Assets:
Fixed assets are stated at cost, net of Cenvat and debrciation. No specific borrowing is incurred to increase the fixed assets so no interest on borrowing is capitalized in fixed assets during the current financial year. Building includes road, staff quarters, security room, gate, compound wall etc.
Company maintains a separate and special in-house research laboratory for the development, expansion and invention of new and innovative techniques for easy and speedy process of output, for maintenance of quality of products and also to search out new products for the betterment and expansion of business.
F.Intangible assets:
The company does not have any intangible assets till now.
G.Debrciation:
(I)Debrciation, on fixed assets, has been provided in the accounts as per schedule II of the Companies Act, 2013.
(II)Debrciation on fixed assets is provided on Written Down Value method.
(III)Debrciation has been charged pro-rata from the date of additions on Written down Value Method as per Schedule II of the Companies Act, 2013.
(IV)One of the director of the company himself handle the technical, manufacturing department and as per the written rebrsentation received from the director, useful life of laboratory equipment is taken as 20 years.
(V)Residual value of all the assets is taken at 4%.
(VI)As per schedule II the life of the office equipments is 5 years however there are some equipments which are already used for more than 5 years and so the life is taken more than 5 years as the amount involved is very low.
(VII)Additions made in the plant and machinery during the year are grouped on quarterly basis for computation of prorate debrciation.
H.Impairment of Assets:
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. However as per the information and explanation provided to us no such assets has been impaired.
I.Investments:
There is no long term investment is found in books of account under audit.
J.Inventories:
Inventories include raw material, finished goods, store and spares, etc. Inventories are valued at lower of the cost or net realizable value as required as per AS 2.
K.i) Current assets:
Current assets includes an asset expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle, it is held primarily for being traded. Current assets include Inventories, cash & cash equivalents, trade receivable etc.
ii) Non-Current assets:
All assets other than current assets are treated as noncurrent assets.
L.Sales:
Sales are shown at net of sales returns, excise duty, VAT but discount and incentives are separately booked as expenditure. Company also has a job work income during the year.
M.Prior period and extraordinary items:
There is no prior period item in the current year.
N.Preliminary expense or expenses to be written off.
Preliminary expenses are firstly booked under this head and then whole amount of brliminary expense has been written off as Accounting standard 28 does not allow to carry forward an asset which has no realizable value. There is no such expenditure incurred during the year.
O.Provisions and Contingent liabilities
(I)Provisions are recognized in the accounts in respect of brsent probable obligations, the amount of which can be reliably estimated.
(II) There is no contingent liability in the balance sheet of the company.
P.Employee benefits:
(I) Short-term employee benefits are recognized as expenses at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.
(II) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services.
(III) As explained by the management that there is no employee in the company who is entitle for gratuity benefit so no provision of gratuity is made.
Q.Export sales & Purchase:
There are no direct export sales made by company during the year under audit. Company has imported goods during the year however the payment for the same made in Indian currency as the company imports the goods through an intermediary.
R.Foreign currency transactions:
I.There are no foreign currency transactions in the current financial year.
S.Borrowing Cost:
No borrowings are created for acquiring fixed assets during the year.
T.Taxes on Income:
Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax liability/assets, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Disclosure of employee benefits explanatoryF.Y.2015-16
Employee benefits:(I) Short-term employee benefits are recognized as expenses at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.(II) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. (III) As explained by the management that there is no employee in the company who is entitle for gratuity benefit so no provision of gratuity is made. |
