Notes Forming Part of Financial Statements for the year ended March 31, 2015 Note No. 1 (A) CORPORATE INFORMATION The Company was incorporated on October 23, 1991, under the provisions of the Companies Act,1956. The company Registered Office is located at Bhimtal, Dist Nanital (Uttarakhand).The Company has been doing trading and rendering Property Maintenance services. (B) SIGNIFICANT ACCOUNTING POLICIES I. BASIS OF brPARATION The financial statements of Wellesley Corporation Limited have been brpared and brsented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention unless otherwise stated and on the basis of the principle of accrual. GAAP comprises accounting standards as brscribed under section 133 of Companies Act 2013('Act') read with rule 7 of the Companies (Accounts) Rules, 2014. The company, generally, follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis except those with significant uncertainties. II. USE OF ESTIMATES The brparation of financial statements requires estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses during the reporting period. Although such estimates and assumptions are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates and assumptions and such differences, if arise, are recognized in the period in which the results are crystallized. III CURRENT AND NON CURRENT CLASSIFICATION All the assets and liabilities have been classified as current or non current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013 Assets An asset is classified as current when it satisfies any of the following criteria: a) it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating cycle; b) it is held primarily for the purpose of being traded; c) it is expected to be realised within 12 months after the reporting date; or d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Liabilities A liability is classified as current when it satisfies any of the following criteria: a) it is expected to be settled in the Company's normal operating cycle; b) it is held primarily for the purpose of being traded; c) it is due to be settled within 12 months after the reporting date; or d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Current assets / liabilities include the current portion of non current financial assets / liabilities respectively. All other assets / liabilities are classified as noncurrent. Normal operating cycle (Six months) is based on the time between the acquisition of assets for processing and their realisation into cash and cash equivalents IV. CASH FLOW STATEMENT The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash flows from operating activities are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. V. TANGIBLE FIXED ASSETS & DEbrCIATION Tangible Assets. Fixed assets are stated at cost, less accumulated debrciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition to fixed assets which takes a substantial period of time to get ready for its intended use are also included to the extent they relates to the period till such assets are ready to be put to use. Debrciation Debrciation on assets is provided using the Straight Line Method at the rates computed based on the estimated useful life of the assets, which are equal to corresponding rates brscribed under the Schedule II to the Companies Act, 2013. VI RETIREMENT AND OTHER EMPLOYEE BENEFITS. Defined Contribution Plan Contributions to the provident and pension funds are made monthly at a brdetermined rate to the Regional Provident Fund Commissioner and debited to the profit and loss account on an accrual basis. There are no other obligations other than the contribution payable to the respectable funds. Defined Benefit Plan The liability in respect of defined benefit plans and other post-employment benefits is calculated using the projected unit credit method and sbrad over the period during which the benefit is expected to be derived from employees' services, consistent with the advice of qualified actuaries. The long term obligations are measured at brsent value of estimated future cash flows discounted at rates reflecting the yields on risk free government bonds that have maturity dates approximating the terms of the Company's obligations. Short- term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. All actuarial gains and losses arising during the year are recognized in the statement of profit and loss. VIII. INVENTORIES Inventories are stated at cost or net realizable value, whichever is lower. Net realisable value (NRV) is the estimated selling price in the ordinary course of the business, less the estimated costs of completion and the estimated costs necessary to make the sale. Cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. The cost of all categories of inventory is determined using weighted average cost method. The cost is arrived at first in first out basis(FIFO). IX. REVENUE RECOGNITION Sale of Goods Revenue from sale of goods is recognised when significant risks and rewards in respect of ownership of products are transferred to customers. Sale of goods is recognised on dispatch of goods. Sales excludes sales tax / VAT, discounts and returns as applicable. Sale of Services Revenue from rendering of services priced on a time and material basis is recognised on rendering of services as per the terms of contracts with customers X. INCOME TAX EXPENSE Income tax expense comprises current tax and deferred tax charge or credit. Current tax.-The current charge for income taxes is calculated in accordance with the relevant tax Regulations applicable to the Company. Deferred tax.-Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed debrciation or carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax consequences of timing differences that originate in the tax holiday period and reverse after the tax holiday period are recognised in the period in which the timing differences originate. Timing differences that originate and reverse within the tax holiday period are not considered for deferred tax purposes. Deferred tax assets are reviewed at each balance sheet date and are written-down or written-up to reflect the amount that is reasonably/virtually certain (as the case maybe) to be realised. Deferred tax assets and liabilities are offset where the Company has a legally enforceable right to set-off assets against liabilities rebrsenting current tax. XI. RESEARCH & DEVELOPMENT Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized only if: • Development costs can be measured reliably; • The product or process is technically and commercially feasible; • Future economic benefits are probable; and • The Company intends to and has sufficient resources to complete development and has the ability to use or sell the asset. XII. EARNING PER SHARE Basic earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Since there is no potential dilutive equity shares hence there is no impact on basic EPS while calculating dilutive EPS. XIII. SEGMENT REPORTING In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated financial statements of Usha General Food Limited (holding company) and therefore, no separate disclosure on segment information is given in these financial statements. XIII PROVISIONS A provision is recognized when an company has a brsent obligation as a result of 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 on best estimate basis 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 not recognized but are disclosed in the notes. Contingent assets are neither recognized not disclosed in the financial statement. XIV IMPAIRMENT The carrying amounts are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. 18. Commitment & Contingent Liabilities:- a) LG Electronics India Pvt. Ltd (LG) had filed a suit against the company, Usha India Ltd., and others for the recovery of Rs. 4,65,02,400/- given as security deposit for the brmises A-41, Mohan Co-operative Industrial Estate, New Delhi –110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same brmises entered into with the company. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6th August, 1997 and transferred the security deposit of Rs. 87,19,200/- received by the Company to the said Trust. However, Hon’ble High Court of Delhi has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of Rs.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit. However, the management is of the opinion based on legal advices, that the Company shall not be liable to make any payment to L.G, even the amount of Rs 4,50,000/- shall be recovered by the company from LG Electronics India Pvt. Ltd (LG).Presently Rs 4,50,000/- so transferred to LG Electronics has been shown under the head of Long term Loan and Advances. (b) Other money for which the company is contingently liable Assessing officer has filed an appeal before the ITAT, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04. The case was remanded back to CIT(Appeals) for adjudication on merit vide order dated 06-06-2008 by ITAT. However the CIT(Appeals) has not taken the case till date. c) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (brvious year Nil) 24. Exceptional items of Rs 170,79,554/- rebrsents the Loan & Advances written off in the books of accounts being not recoverable in cash or in kind. 25. Previous year's figures have been regrouped / rearranged wherever necessary. 26. Figures in brackets denotes negative figures. FOR SRIVASTAVA KUMAR & CO. CHARTERED ACCOUNTANTS (Firm Regn No 011204N) (M K JAIN) PARTNER M NO : F-88223 For and on behalf of the Board Managing Director Dalip Singh Dasila Din 03613295 Director Vishnu Gopal Rajgarhia Din 00480125 Company Secretary & Chief Financial Officer Sumeer Narain Mathur Membership no ACS-21151 Place : New Delhi Date: 28th May, 2015 |