1 SIGNIFICANT ACCOUNTING POLICIES (A) Basis of Preparation of Financial Statement The Financial Statements have been brpared under the historical cost conventionon an accrual basis and comply in all material aspects with the mandatory accounting standards and the provisions of the Companies Act, 2013. (B) Use of Estimates The brsentation and brparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of revenues and expenses during the reporting year. Difference between the actual result and the estimates are recognized in the year in which the results are known / materialized. (C) Inventories Valuation (i) Raw materials, components, stores & spares, packing material, semi-finished goods & finished goods are valued at lower of cost and net realisable value. (ii) Cost of Raw Materials ,components, stores & spares and packing material is arrived at Weighted Average Cost and Cost of semi-finished good and finished good is arrived at estimated cost. (iii) Scrap is valued at net realisable value. (D) Cash And Cash Equivalents Cash and Cash equivalents for the purpose of cash flow statements comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. (E) Revenue Recognition Sale & Sale of Services (i) Sales are recognised when goods are supplied and are recorded inclusive of Excise Duty and net off Value Added Tax and trade discount. (ii) Revenues from Services are recognised as and when services are rendered. Other Income Interest income is recorded on a time proportion basis taking into account the amounts invested and the rate of interest. Export Benefits All export benefits other than advance license benefits are accounted for on accrual basis. Dividends Dividend income is recognised when the company's right to receive dividend is established by the reporting date. (F) Fixed Assets & Debrciation / Amortisation (i) Fixed assets are stated at cost less accumulated debrciation. (ii) The debrciation on tangible fixed assets has been provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013. (iii) Cost of technical know-how is amortised over a period of six years. (iv) Computer software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs include licence fees and costs of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. The same is amortised over a period of 5 years on straight-line method. (v) Leasehold Land is debrciated over the period of the Lease. (G) Foreign Currency Transaction (i) In respect of foreign exchange transaction, the transaction in foreign currency is recorded in rupees by applying the exchange rate brvailing at the time of the transaction. Amount short or excess realised/incurred is transferred to Statement of Profit and Loss. (ii) All foreign currency liabilities / assets not covered by forward contracts, are restated at the rates brvailing at the year end and any exchange differences are debited / credited to the Statement of Profit & Loss. (H) Investments Long term Investments are stated at cost. Provision for diminution in value of long term investments is made only if such decline is other than temporary in the opinion of the management. Cost of Investment is arrived at on the basis of weighted average cost at the time of sale. Current investment are carried individually, at the lower of cost and fair value. (I) Employee Benefit (i) Short term employee benefits are recognised as an expense at the undiscounted amounts in the Statement of Profit & Loss for the year in which the related service is rendered. (ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Statement of Profit & Loss. Gratuity and Leave encashment which are defined benefits are accrued based on actuarial valuation as at Balance Sheet date by an independent actuary. The Company has opted for a Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and the contribution is charged to the Statement of Profit & Loss each year. The Company has funded the liability on account of leave benefits through LIC's Group Leave Encashment Assurance Scheme and the Contribution is charged to Statement of Profit and Loss. (J) Segment Report (i) The company identifies primary segment based on the dominant source, nature of risks and returns and the internal organisaiton and mangagement structure. The operating segement are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance. (ii) The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate. (K) Borrowing Cost Borrowing cost attributable to the acquisition or construction of qualifying assets is 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 or sale as per Accounting Standard 16 "Borrowing Cost". All other borrowing costs are charged to revenue. (L) Leases (i) Lease rentals in respect of assets acquired under operating leases are charged off to the Statement of Profit and Loss. Lease rentals in respect of assets given under operating leases are credited to the Statement of Profit & Loss. (ii) Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. (iii) Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs, including debrciation, are recognised as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc., are recognised immediately in the statement of profit and loss. (M) Earnings Per Share Basic earnings per share is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share amounts are computed after adjusting the effects of all dilutive potential equity shares except where the results would be anit-dilutive. The numbers of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which could have been issued on the conversion of all dilutive potential equity shares. (N) Taxation (i) Provision for Income tax is made on the basis of the estimated taxable income for the current accounting period in accordance with the Income-Tax Act, 1961. (ii) The deferred tax for timing differences between the book profits and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is virtual certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. (O) Impairment of Assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed, and the asset is reflected at the recoverable amount subject to a maximum of debrciated historical cost. (P) Provisions and Contingent Liabilities The Company creates a provision when there is a brsent obligation as a result of a past event that probably requires an outflow of 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. Where 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. (Q) Operating Cycle Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non current. 2 The brvious year figures have been regrouped/reclassified, wherever necessary to confirm to the current brsentation as per the schedule III of Companies Act, 2013. As per our report attached of even date For M L BHUWANIA & CO. CHARTERED ACCOUNTANTS Firm Registration Number : 101484W J P BAIRAGRA PARTNER MEMBERSHIP NO. 12839 FOR AND ON BEHALF OF THE BOARD OF DIRECTORS SHEKHAR BAJAJ H A NEVATIA CHAIRMAN WHOLE TIME DIRECTOR PRAKASH SUBRAMANIAM brSIDENT & CEO VIJAY SINGH CHIEF FINANCIAL OFFICER KIRAN MUKADAM COMPANY SECRETARY PLACE : MUMBAI DATED : JUNE 14, 2016 |