NOTES FORMING PART OF FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF brPARATION:

These financial statements are brpared in accordance with the generally accepted accounting principles in India (Indian GAAP) under the historical cost convention except for certain tangible assets which are being carried at revalued amounts as also on accrual basis. These financial statements have been brpared to comply with the accounting standards brscribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 ('the Accounting Standards') and the relevant provisions of the Act (to the extent notified). In the light of the first proviso to Section 129 (1) of the Act and Schedule III to the Act, the items and terms contained in these financial statements are in accordance with the Accounting Standards.

1.2 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 reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts / advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognised in the period/s in which the results are known / materialised.

1.3 FIXED ASSETS AND DEbrCIATION / AMORTISATION:

i. Fixed Assets are stated at historical cost, net of CENVAT/value added tax less accumulated debrciation except Land and Buildings which were revalued. Costs include all costs incurred to bring the assets to their brsent location and condition.

ii. Debrciation on tangible fixed assets (other than Leasehold Land) is provided on "Straight Line Method" over the useful lives of assets as brscribed under Part C of Schedule II of the Companies Act, 2013.

Leasehold Land is amortised on "Straight Line Method" over its remaining lease period of 72 years commencing from the year 2002-03.

iii. Debrciation for assets purchased / sold during the period is charged on pro-rata basis.

1.4 INVESTMENTS:

Investments, which are long-term, are stated at cost. A provision for diminution, if any, is made to recognise a decline, other than temporary, in the value of investments.

1.5 INVENTORIES:

Inventories are valued as under:

i. Raw materials: At lower of cost and net realisable value on first-in-first out basis;

ii. Finished Goods and Process Stock: At lower of cost and net realisable value on first-in-first out basis; 

iii. Fuel, Stores and Spares: At lower of cost and net realisable value on first-in-first out basis. By-products are valued at the net realisable value.

Cost of inventories comprises of costs of purchase, conversion and other costs incurred in bringing the inventories to their brsent location and condition. Excise duty on finished goods awaiting clearance has been provided for and included in cost thereof. 

1.6 REVENUE RECOGNITION:

i. Sales are recognised in accordance with Accounting Standard 9 on "Revenue Recognition", that is, when the seller has transferred to the buyer the property in goods for a price or all significant risks and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods and no uncertainty exists regarding the amount of consideration from the sale of goods.

ii. Dividend income from investments is recognised when the Company's right to receive the dividend is established.

1.7 FOREIGN CURRENCY TRANSACTIONS:

i. Transactions in foreign currencies are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Monetary items which are denominated in foreign currency are translated at the exchange rates brvailing at the Balance Sheet date and profit/loss on translation thereon is credited/ charged to the Statement of Profit and Loss.

Non-monetary items denominated in foreign currency which are carried at:

i fair value / net realisable value are translated at the exchange rate brvalent at the date when the fair value / net realisable value was determined;

ii historical cost, are reported at the exchange rate brvalent at the date of transaction.

iii. Exchange Differences arising on settlement or restatement of foreign currency denominated liabilities relating to the acquisition of fixed asset are recognised in the Statement of Profit and Loss.

iv. In case of forward contracts, the exchange difference between the forward rate and the exchange rate at the date of transaction is recognised as income or expense over the life of the contract.

v. As required by the Announcement of the Institute of Chartered Accountants of India on positions of derivatives, keeping in view the principle of prudence as per Accounting Standard 1 on "Disclosure of Accounting Policies", outstanding forward contracts at the Balance Sheet date are reflected by marking them to market and accordingly, the resulting mark to market losses are provided in the Statement of Profit and Loss.

1.8 EMPLOYEE BENEFITS:

i. Defined Contribution Plan

Contribution as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis. Therefore, any excess payment made will be considered as an advance and shortfall, if any, will be adjusted.

ii. Defined Benefit Plan

Gratuity - In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date carried out by an independent actuary. Actuarial gain or loss is recognised immediately in the statement of profit and loss as income or expense. The Company has an employee's gratuity fund managed by the Life Insurance Corporation of India ("LIC"). 

Compensated Absences - The Company provides for the encashment of absence or absence with pay based on policy of the Company in this regard. The employees are entitled to accumulate such absences subject to certain limits, for the future encashment or absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date on the basis of an independent actuarial valuation.

1.9 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 asset is one that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing costs comprise of interest and other costs incurred in connection with the borrowing of funds.

1.10 SEGMENT REPORTING POLICIES:

i. Primary Segments are identified based on the nature of products, the different risks and returns and the internal business reporting system. The identification of geographical segments is based on the geographical location of its custome-

The following specific accounting policies have been followed for segment reporting:

i Segment revenue includes sales and other income directly identifiable with / allocable to the segment.

ii Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under Unallocable Expenses.

iii Income which relates to the Company as a whole and not allocable to segments is included in Unallocable Income.

iv Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities are those relate to the Company as a whole and not allocable to any segment.

ii. The Company brpares its Segment information in conformity with the accounting policies adopted for brparing and brsenting the financial statements of the Company as a whole.

1.11 TAXES ON INCOME:

i. Income tax expense comprises of current tax and deferred tax charge/credit.

ii. Provision for current tax is made on the estimated taxable income at the rate applicable to the relevant assessment year.

iii. Deferred tax is recognised, subject to consideration of prudence, on timing differences between taxable and accounting income which originates in one period and are capable of reversal in one or more subsequent periods (adjusted for reversals expected during tax holiday period). The tax effect is calculated on accumulated timing differences at the year end based on tax rates and laws enacted or substantially enacted as of the balance sheet date.

In the event of unabsorbed debrciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such deferred tax assets. In other situations, deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available to realise such deferred tax assets. 

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws. 

1.12 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

i. The Company recognises a Provision when there is a brsent obligation as a result of past event, the settlement of which is probable to result in an outflow of resources and a reliable estimate can be made of the amount of obligation.

ii. Contingent liabilities are not recognised but are disclosed in the notes.

iii. Contingent Assets are neither recognised nor disclosed in the financial statements.

1.13 IMPAIRMENT OF ASSETS:

If internal / external indications suggest that an asset of the Company may be impaired, the recoverable amount of asset / cash generating unit is determined on the balance sheet date and if it is less than its carrying amount, the carrying amount of asset/ cash generating unit is reduced to the said recoverable amount. Subsequently, if there is a change in the indication, since the last impairment was recognised, so that recoverable amount of an asset exceeds its carrying amount, an impairment recognised for an asset in prior accounting period is reversed. The recoverable amount is measured as the higher of the net selling price and value in use of such assets/ cash generating unit, which is determined by the brsent value of the estimated future cash flows. 

2. Credit balances remaining unclaimed beyond the limitation period are written back except where obligations are perceived by management to be reasonably confirmed. Balances of creditors/advances from customers are subject to confirmation and consequent adjustments, if any. 

3. In view of the loss for the current year, as per the provisions of the Income-tax Act, 1961, the Company is neither liable to tax as per the normal provisions nor liable under the provisions of Section 115JB and accordingly, no provision for tax is required to be made.

4. The brvious year’s figures, wherever necessary, have been regrouped/ reclassified to conform to the current year’s brsentation.  

As per our report of even date attached

For BANSI S. MEHTA & CO.

Chartered Accountants

Firm Registration No. 100991W

PARESH H. CLERK

Partner

Membership No. 36148

For and on behalf of the Board of Directors

Yogesh Kothari Chairman  

Amit Mehta Vice Chairman

G. S. Venkatachalam Executive Director

A. R. Chaturmutha Chief Financial Officer

Dimple Mehta Company Secretary

Mumbai, Dated : May 8, 2015.