NOTES TO FINANCIAL STATEMENTS 1. Nature of operations Jaipan Industries Limited ("Jaipan" or "the Company"), a public limited company was incorporated on 27th April, 1965. The Company is primarily engaged in the manufacturing & trading of home appliances. The Company's registered office is at 17, Jai Villa Compound, Cama Industrial Estate, Walbhat Road, Goregaon (E), Mumbai -400 063 Maharashtra, India. 2. Basis of brparation of financial statements The financial statements have been brpared on the basis of going concern under historical cost convention on the accrual basis of accounting, and comply in all material aspects with applicable Accounting Principles in India brscribed by the Central Government. The Accounting Standards notified under Section 211(3C) (which continues to be applicable in terms of general circular 15/2013 dated September 13, 2013 of the ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013) and the relevant provisions of the said Act. The accountings policies have been consistently applied by the Company, except for the changes in accounting policy discussed in note 13 of Schedule 23 and are consistent with those used in the brvious year. The financial statements are brsented in Indian Rupees, unless otherwise specified. 3. Summary of significant accounting policies a) Use of estimates The brparation of the financial statements are in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liabilities at the date of financial statements. The key estimates made by the Company in brparing these financial statements comprise provision for expenses, retirement benefits, provision for doubtful debts and income taxes. Actual results could differ from those estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods. b) Fixed assets, Intangible Assets, Work in Progress and debrciation Fixed assets are stated at cost of acquisition or construction less accumulated debrciation and impairment losses, if any. Cost comprises the purchase price and other costs attributable to bringing the asset to its working condition for its intended use, net of cenvat recoverable. Intangible Assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the enterprises and he cost of the asset can be measured reliably. Capital Work in progress comprises outstanding advances paid to acquire fixed assets. The cost of fixed assets that is not yet ready for their intended use at the Balance sheet date. Debrciation on fixed assets is provided on the Strated Line Methods (SLM), at the rates and the manner brscribed in Schedule II to the Act which as per management is rebrsentative of the estimated useful life of these assets. Leasehold improvements are amortised over the primary lease period. Proportionate debrciation is charged for additions/deletions during the year. Individual asset costing less than Rs. 5,000 are debrciated in full in the year of purchase. c) Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. Current investments are carried at lower of cost and fair value, determined on an individual investment basis. All other investments are classified as long-term investments and are carried at cost. However, a provision for diminution in value is made if the diminution in value is other than temporary. d) Inventories INVENTORIES ARE VALUED AS UNDER: a) Raw materials, stores and spares and packaging materials: Lower of cost and net realisable value. Cost is determined on FIFO basis. b) Finished goods: Lower of cost and net realisable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. c) Traded goods: Lower of cost and net realisable value. Cost is determined on FIFO basis. d) Work-in-process: At cost upto estimated stage of completion. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. e) Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sale of goods Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer usually on acceptance of the goods and other revenue recognition criteria are met and is stated net of trade discounts, rebates, excise duties, sales returns and all applicable sales tax and duties. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends Revenue is recognized when the Companies right to receive the payment is established. f) Foreign exchange transactions Transactions in foreign currencies are recorded at the rates brvailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the rate brvailing on the balance sheet date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year or reported in the brvious financial statements, are recognised as follows: i Exchange differences arising on settlement of transactions and translation of monetary items other than those covered by (ii) below are recognized as income or expense in the year in which they arise. g) Export benefits/incentives Export entitlements under the Duty Entitlement Pass Book scheme ('DEPB') are recognised in the profit and loss account on cash basis in respect of the exports made. Obligation/entitlements on account of Advance License Scheme for import of raw materials are accounted for on the purchase of raw materials and/or export sales. h) Provisions and contingencies A provision is recognised when an enterprise has a brsent obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. i) Employee retirement benefits Defined contribution plan - provident fund The employees entitled to receive benefits under the provident fund as defined, in Employees Provident Fund and Miscellaneous Provisions Act, 1952, receive the benefits of provided fund contribution. Both, the employee and the employer make monthly contributions to the plan at a brdetermined rate (brsently at 12%) of the employees' basic salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to the fund administered and managed by the Government of India and are charged to Profit and Loss Account. j) Taxation The Charge for current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. The Charge for Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet dates. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Where there is unabsorbed debrciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in the future. At each balance sheet date the Company re-assesses unrecognised deferred tax assets. Minimum Alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. k) Borrowings Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue. l) Impairment of Assets At the date of each Balance Sheet, the company evalues internally, indications of the impairment if any, to the carrying amount of its fixed and other assets. If any indication does exist, the recoverable amount is estimated at the higher of the realizable value and the value in use, as considered appropriate. If the estimated realizable value is less than the carrying amount, an impairment loss is recognised. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed amount that would have been determined (net of debrciation) had no impairment loss been recognised for the asset in prior years. m) Earnings per share Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting applicable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 4. Loans: a) Secured working capital loans: These include Cash Credit, Packing Credit and letter of credit facility from Bank of Baroda secured by way of charge on hypothecation of inventories and book debts (except specific clearing and forwarding services receivables) of the Company, situated at Silvasa and Mumbai office and other Branch . Further, these loans are secured by collateral charge on factory Building situated at silvassa. Further, these loans are secured by personal guarantee of Directors, Mr. J.N. Agawal and Mr. Atin Agarwal. These loans are generally extended for a period of one year and mutually renewable every year with a clause of payable on demand. b) Secured term loans: These include loans from banks and financial institutions secured by way of first charge / mortgage in respect of the Company's immovable and movable properties, both brsent and future. Presently company has not obtained any secured terms loan from any bank or the financial institution. c) Secured vehicle loans: These include hire-purchase loans from banks for purchase of various vehicles secured by way of hypothecation of respective vehicles. Amounts payable within one year Rs. 43,32,321.30/-(brvious year: Rs. 67,07,617.20/-). d) Unsecured loans: Working capital requirements obtained from others and is payable within one year. These loans are generally extended for a period of one year and mutually renewable every year with a clause of payable on demand. 5. Sundry Creditors The Company has no details of Small Scale Industrial undertakings & Micro, Small and Medium Enterprises. 7. Employee benefits Defined contribution plan The Company Total contributed Rs. 7,96,950/-to the provident fund plan during the year ended March 31, 2015 (brvious year: Rs. 75,078/). 11. Previous year figures Previous year figures have been re-grouped/re-casted wherever considered necessary to make them comparable with those of the current year. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS (MANAGING DIRECTOR) (EXECUTIVE DIRECTOR) PLACE : MUMBAI DATED : 14th August, 2015 |