Notes forming part of the financial statements Note Particulars 1 Corporate information The Company was incorporated on 12th July 1989, as a Private Limited company under the provisions of the Companies Act 1956, with limited liability and has been granted Registration under number 11-52574 of 1989 from Registrar of Companies, Maharashtra. Company was converted into a Public Limited Company w.e.f 14th Septemeber, 1993, and a Fresh Certificate of Incorporation consequent on Change of Name was issued by Registrar of Companies, Maharashtra. The Name of the Company has been changed from Bhageria Dye Chem Limited to Bhageria Industries Limited w.e.f. 19th August, 2015 and a Fresh Certificate of Incorporation consequent on Change of Name was issued by Registrar of Companies, Maharashtra. The business activities carried on by the Company is manufacturing and sale of chemicals and Dyes, Dyes intermediates required for Dye Manufacturer and merchant exports of related items. The Company also engaged into generation and distribution of solar power. 2. Significant Accounting Polices 2.1 Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and applicable Accounting Standards as per Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of Companies (Accounts) Rules 2014. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. 2.2 Use of estimates The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 2.3 Inventories Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty. 2.4 Debrciation and amortisation Debrciation has been provided on the written down method as per useful life brscribed in schedule II of Companies Act 2013. and Debrciation on assets added/disposed off during the year has been provided on prorata basis with reference to the month of addition/disposal. 2.5 Revenue recognition Sale of goods Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Export incentive/benefits are accounted on accrual basis. Customs duty benefits in the form of Advance License entitlements on the export of goods are recognized and added to the cost of import Interest income is accounted on accrual basis. Revenue (income) is recognised when no significant uncertainty as to its determination or realization exists. Dividend Income is recognised when the right to receive dividend is established. 2.6 Fixed assets Fixed assets, except assets held for sale are carried at cost less accumulated debrciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet. Capital work-in-progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest. 2.7 Foreign currency transactions and translations Initial recognition Transactions in foreign currencies entered into by the Company are accounted at the exchange rates brvailing on the date of the transaction. Measurement of foreign currency monetary items at the Balance Sheet date Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates. 2.8 Investment a) Long-term investments including investment are stated at cost. Provision for diminution in value of long-term investments if any is made, if such diminution is other than of temporary nature. b) Current Investment are carried at lower of cost or market value. 2.9 Employee benefits Employee benefits include provident fund and gratuity fund. Defined contribution plans The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made. Defined benefit plans For defined benefit plans in the form of gratuity fund is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the brsent value of available refunds and reductions in future contributions to the schemes. Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and leave compensation which are expected to occur within twelve months after the end of the period in which the employee renders the related service. 2.10 Borrowing costs Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. 2.11 Leases 1) Operating Leases: a) Where the company is lessee Leases where significant portion of risk and reward of ownership are retained by the lesser are classified as operating leases and lease rental thereon are charged to statement of profit and loss. b) Where the company is the lessor 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 lease are included in fixed assets (Facility Land). Lease income on an operating lease is recognized in the statement of profit and loss over the lease term. 2) Finance Lease: Finance Lease or similar arrangements, which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized and disclosed under Tangible Assets. Finance Expenses to the extent of Borrowing cost are capitalized and remaining are charged to statement of profit and loss account. 2.12 Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed debrciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. 2.13. Impairment of assets The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets. 2.14 Provisions and contingencies A provision is recognised when the Company has a brsent obligation as a result of past events and 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 (excluding retirement benefits) are not discounted to their brsent value and are determined based on the 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. Contingent liabilities are disclosed in the Notes. 2.15 Financial Derivatives and commodity hedging transactions In respect of derivative contracts, brmium paid, gains/losses on settlement and losses on restatement are recognised in the statement of Profit and Loss except in case where they relate to the acquisition or construyction of fixed assets, in which case, they are adjusted to the carrying cost of such assets. Notes 3 Contingent Liabilities And Commitments 1 Contingent Liabilities (to the extent not provided for) i) Letters of Credit Outstanding amounts to Rs. 213.54 Lakhs (P.Y. Rs. 488.70 Lakhs) ii) Bank Guarantees Outstanding amounts to Rs. 12 Crores iii) Sales Tax Dispute : a The Sales Tax Officer, Mazgaon had raised a demand of Rs. 1.48 Lakhs while completing the assessment for the Financial Year 2006-07. The company has filed an appeal before the Deputy Commissioner of Sales Tax (Appeals) against the order. b The Asst. Commissioner of Sales Tax, Mazgaon had raised a demand of Rs. 2.37 Lakhs while completing the assessment for the Financial Year 2008-09. The company has filed an appeal before the Deputy Commissioner of Sales Tax (Appeals) against the order. c The Sales Tax Officer, Mazgaon had raised a demand of Rs. 1.40 Lakhs while completing the assessment for the Financial Year 2010-11. The company has filed an appeal before the Deputy Commissioner of Sales Tax (Appeals) against the order. d The Sales Tax Officer, Vapi had raised a demand of Rs. 8.81 Lakhs While completing the assessment of the Financial Year 2008-09. The company has filed an appeal before the Gujarat Value Added Tax Tribunal,Ahmedabad (Appeal) against the order. 2 Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) : • 30 MW Solar Power Plant at Kombhalne, Ahmednagar 1) Land (net of advances) - Rs. 2.47 Crores 2) Solar Photovoltaic Plant Cost (including Modules) - Amount Unascertainable Notes 4 Transfer Of Unclaimed Dividend To Investor Education And Protection Fund During the year the company has transferred the unclaimed dividend for the year 2007-08 amounting to Rs. 2,93,976/-to the Investor Education and Protection Fund. Notes 5 Impairment Of Assets No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India. Notes 6 Previous Year Figures Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. For and on behalf of the Board of Directors Suresh Bhageria Chairperson Shri Nath Tiwari Company Secretary Vinod Bhageria Managing Director Rakesh Kachhadiya Chief Financial Officer Place : Mumbai Date : 06th May, 2016 |