1. COMPANY OVERVIEW- Elpro International Limited is engaged in the business of manufacturing of Other Electrical equipments like Lighting Arresters, Varistors, Surge Arrestor & also engaged in Real Estate development Service. The Company has manufacturing plant located at Chinchwad, Maharashtra. 2. SIGNIFICANT ACCOUNTING POLICIES a. Basis of Preparation of Financial Statements The financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles ("GAAP") under the historical cost convention on an accrual basis and are in conformity with mandatory accounting standards, as brscribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). b. Use of Estimates The brparation of the financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosure relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provision for doubtful debts, future obligations under employee retirement benefit plans, income taxes and the useful lives of fixed assets and intangible assets. Management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Future results could differ from these estimates. c. Tangible Fixed Assets Fixed assets are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any. The cost comprises Purchase price, Borrowing Costs if capitalization criteria are met and any other directly attributable cost of bringing the asset to its working condition for the intended use, net off of any trade discounts & rebates. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its brviously assessed standard of performance. All other expenses on existing fixed asset, including day to day repair & maintenance expenditure & cost of replacing parts, are changed to the statement of profit & loss for the period during which such expenses are incurred. Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds & the carrying amount of the asset & are recognized in the statement of Profit & Loss when the asset is derecognized. Capital assets under erection/installation are stated in the Balance sheet as "Capital Work-in-Progress" d. Intangible Assets Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. They are amortized on a straight line basis over their estimated useful lives. e. Debrciation and Amortisation In respect of fixed assets (other than capital work-in-progress) acquired during the year, debrciation/amortization is charged on a straight line basis so as to write off the cost of the assets over the useful lives and for the assets acquired prior to April 1, 2014, the carrying amount as on April 1, 2014 is debrciated over the remaining useful life based on an evalution.The useful life of the asset is determined as brscribed in schedule II to the Companies Act, 2013. f. Assets Taken and Given on Lease Assets taken on lease: i In respect of finance lease arrangements, the assets are capitalized and debrciated. Finance charges are charged off to the Statement of Profit and Loss of the year in which they are incurred. ii. Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on straight line basis, rebrsentative of the time pattern of benefits received from the use of the assets taken on lease. Asset given on lease: Lease rentals are accounted on accrual basis in accordance with the respective lease agreements. g. Investments All Investments has been categorized as Long-term investments. Long-term investments are valued at cost. Provision for diminution, if any, in the value of investments is made to recognise a decline, other than temporary. h. Inventories Inventories are stated at the lower of cost and net realizable value. In determining the cost of loose tools, stores and spares, raw materials and components, the weighted average method is used. Cost of manufactured components, work in progress and manufactured finished goods include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition which is determined on absorption cost basis. i. Inventories - Project in progress Project in progress is valued at lower of cost or net realisable value. Cost includes cost of land, materials, construction, services, borrowing costs and other overheads relating to the particular projects. j. Foreign exchange transactions Transactions in foreign currencies are recorded at the brvailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and loss account. Foreign currency monetary assets and liabilities at the year end are translated at the year end exchange rates and resultant exchange differences are recognised in the Statement of Profit and Loss. k. Revenue recognition i) Sale of goods is recognised on dispatch to customer and are recorded net of sales tax and excise duties and excludes export incentives such as duty drawbacks. ii) Rental income is recognised on accrual basis. iii) Income from Joint development of property will be recognized, when Sale Deed will be executed in favour of the third party. iv) Revenue from wind mill power project is recognised on the basis of actual power sold as per the terms of the power purchase agreements entered into with the respective parties. v) Income from projects is recognized on the transfer of all significant risks and rewards of ownership to the buyers and it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. However if, at the time of transfer, substantial acts are yet to be performed under the agreement, revenue is recognized on proportionate basis as the acts are performed, i.e. on the percentage of completion basis, subject to the actual cost incurred being at least 25% of the total estimated project cost involved and further subject to receipt of at least 20% of the total sales consideration. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project and the foreseeable losses to completion. l. Research and development expenditure Research and development expenditure, other than capital expenditure is expensed out as and when incurred. m. Retirement benefits - Gratuity Liabilities with regard to the gratuity benefits payable in future are determined by actuarial valuation at each Balance Sheet date using the Projected Unit Credit Method and contributed to Employees Gratuity Fund managed by Life Insurance Corporation of India. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in the Statement of Profit and Loss in the period in which they arise. - Leave Encashment The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment/availment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation. - Provident Fund Provident fund contributions are made to a trust administered by the Company and are charged to the Statement of Profit and Loss. The Company has an obligation to make good the shortfall if any, between return of investment by the trust and government administered interest rate. n. Provisions Provision is made when there is brsent obligation as a result of a past event that probably requires an outflow of economic resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made, when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Liquidated damages/penalties are provided for meeting the obligations arising from delay in contractual delivery schedules. Provision for probable warranty claim is based on Management's estimate and judgment and is provided as a percentage of average claims of past three years for average warranty period of 18 months. o. Accounting for Taxes on Income Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of section 115JB of the Income tax Act, 1961) over normal income-tax is recognized as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of seven succeeding assessment years. Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax debrciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation. p. Impairment The Company reviews the carrying value of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their brsent value at appropriate discount rates. q. Contingent liabilities Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within control of the Company. A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation at the year end date. Contingent assets are not recognized or disclosed in the financial statements. r. Segment Reporting Segments have been identified having regard to the dominant source and nature of risks and returns and the internal organisation and management structure. Inter-segment revenue is accounted on the basis of market price. Unallocated corporate expenses include revenue and expenses which relate to the enterprise as a whole and are not attributable to segments. s. Borrowing Costs Borrowing Costs that are attributable to the acquisition, construction or production of a qualifying asset is capitalized as part of the cost of that asset. Other borrowing costs are recognized as expense in the period in which they are incurred. 3. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. 4. Derivative transactions The Company has not entered into any derivative contracts to hedge its foreign currency risk.The net unhedged foreign currency exposure as at the year-end amounted to USD 0.45 Lacs (Previous year USD 0.51 lacs). 5Investments made in PNB MetLife India Insurance Company Limited are long term in nature. In the Opinion of the management the realisable value of these investments is more than the book value as at March 31, 2015. 6. Pursuant to the enactment of the Companies Act, 2013, the company has applied estimated useful lives as specified in Schedule II.Accordingly the unamortised carrying value is being debrciated /amortised over the revised/remaining useful lives. The written down valued of Fixed Assets whose lives is being expired as at April 2014 have been adjusted net of tax, in the profit & Loss Account. 7. CORPORATE SOCIAL RESONSIBILITY As mandated by section 135 of the Companies Act, 2013, the company has constituted as CSR Committee. Since the average net profit of the company is in negative, there is no expenditure on CSR activities during the year. 8. The Company has its own Provident fund trust covering the employees of Elpro International Limited and as the fund would have to meet any interest shortfall, it is to be construed as a defined benefit plan in terms of recent Accounting Standards Board (ASB) guidance on implementing AS 15 (Revised 2005) issued by the ICAI. However, in the absence of guidance note from the Actuarial Society of India, the Company's actuary has exbrssed his inability to reliably measure the provident fund liability. Accordingly, the Company has accounted for the same as a defined contribution plan. 9. Previous year's figures have been shown in brackets and have been regrouped wherever necessary to conform to current year's classification. As per our Report of even date attached For on behalf of Board of Directors TODARWAL & TODARWAL Chartered Accountants ICAI Reg. No. : 111009W Arun Todarwal Partner M.No. 032822 Sambhaw Kumar Jain Chief Financial Officer(PAN: AJGPP2859K) Rashmi Patkar Company Secretary(M.No.26876) Narayan T Atal Director (DIN: 00237626) Ram Swarup Dabriwala Chairman & Managing Director (DIN: 00108875) Place : Mumbai Date : 28th May, 2015 |