NOTE : 18 OTHER EXPENSES 19. Significant Accounting Policies i) Basis of Preparation of Financial Statement These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014 till the standards of accounting or any addendum thereto are brscribed by the central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 2013 shall continue to apply. Consequently these financial statements have been brpared to comply in all material aspects with accounting standards notified under section 211(3C)[Companies (Accounting) Rules, 2014 as amended] and other relevant provisions of the Companies Act,2013. ii) 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 disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the period. iii) Fixed Assets and Work in Progress Except the provisions of debrciation on fixed assets for the current year and transition to the Schedule-II of The Companies Act 2013, the Fixed Assets are stated at cost less accumulated debrciation and impairment losses determined, if any. The cost comprises the purchase price inclusive of duties (net of CENVAT Credit), taxes, incidental expenses, erection / commissioning expenses, rent paid and borrowing costs if capitalization criteria are met and directly attributable cost of bringing the assets to its working condition for the intended use. Expenditure during construction period: Expenditure incurred on projects under implementation are treated as Pre-operative expenses pending allocation to the assets and are shown under "Capital work-in-progress". Capital work- in-progress is stated at the amount expended up to the date of Balance Sheet for the cost of fixed assets that are not yet ready for their intended use. iv) Investments Investments are either classified as current or long-term based on Management’s intention at the time of purchase. Long-term investments are carried at cost less provisions for diminution recorded to recognize any decline, other than temporary, in the carrying value of each investment. Current investments are carried at the lower of cost and fair value, category wise. Cost includes acquisition charges such as brokerage, fee and duties. 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. v) Inventories Inventories are valued at lower of cost and net realizable value. Cost of inventory comprises of purchase price, cost of conversion and other cost that have been incurred in bringing the inventories to their respective brsent location and condition. Interest costs are not included in value of inventories. The cost of Inventories is computed on weighted average basis. vi)Revenue recognition Sale of goods is recognized at the time of transfer of substantial risk and rewards of ownership to the buyer for a consideration. All other income is accounted for on accrual basis. vii) Expenses All the expenses are accounted for on accrual basis. Employee benefits, Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered. viii) Impairment of assets Impairment loss, if any, is recognized to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of, an asset’s net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Impairment losses recognized in prior years are reversed when there is an indication that the impairment losses recognized no longer exist or have decreased. Such reversals are recognized as an increase in carrying amount of assets to the extent that it does not exceed the carrying amount that would have been determined (net of amortization or debrciation) had no impairment loss been recognized in brvious years. After impairment, debrciation or amortization on assets is provided on the revised carrying amount of the respective asset over its remaining useful life. ix)Segment reporting Segments are identified based on the dominant source and nature of risks and returns and the internal organisation and management structure. The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: Inter segment revenue is accounted for based on the transaction price agreed to between segments which is primarily market led. Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been disclosed as “Un-allocable”. x) Earnings per share Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of any extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. xi) Taxes on income Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax is recognized, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. xii) Derivative Instruments As per the announcement made by the Institute of Chartered Accountants of India, Derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect of the underlying hedged item is charged to the statement of profit and loss.Net gains are ignored as a matter of prudence. xiii) Cash flow statement Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated. xiv) Dues to micro and small scale business enterprises There are no Micro and Small Enterprises, to whom the Group owes dues, which are outstanding for more than 45 days as at 30th June, 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 Group. Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less. Provision is recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable. A provision is recognised if, as a result of a past event, the Company has a brsent legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the balance sheet date. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date. Re-imbursement expected in respect of expenditure to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. A Contingent Asset / Liability is not recognised in the Accounts. a. The company has given a guarantee to the Bank of India for cash credit facilities of Rs.250 lacs, Working Capital Term Loan for Rs.650 lacs and guarantee issue facility to the extent of Rs.150 lacs sanctioned to Eastern Sugar & Industries Limited. b. The company has mortgaged, by way of deposit of title deeds, all immovable properties pertaining to its sugar division situated at Motihari, Champaran East, Bihar as security interalia for the punctual payment of Lease Rentals, Cost Compensatory and Finance Charges, expenses and other moneys payable by Eastern Sugar & Industries Limited to IDBI in respect of assistance granted under Equipment Lease Finance Scheme and Term Loan aggregating to Rs. 2625 lacs. c. The Company had determined lease with The Eastern Sugar & Industries Ltd in the accounting year 2005 – 2006 and as per the terms and conditions of the agreement entered into with the said lessee company, all the fixed assets of the said lessee company will be acquired on deferred payment basis over a number of years by the Company at a value (to be ascertained) on the date of transfer. Such purchases shall be accounted for as and when the assets are acquired and the amount payable for such purchases/acquisition of fixed assets shall be adjusted against loans given to and other claims due from the lessee company. Contingent liability for such amount payable to the said Company for acquisition of its fixed assets has not therefore been provided in the books of the Company. ii) There is no impairment of assets. The management expects to recover amount higher than the carrying value of fixed assets. iii)Deferred Tax has not been recognized in the books. iv) T.D.S. on interest other than interest on securities, rent, salary &fee for professional & Technical services u/s 194- A, 192 & 192-J respectively, of Income Tax Act, 1961 have not been deducted and deposited in time. Interest and penalty on delayed deposit if any, will be accounted for on cash basis. v) Gratuity, Leave liabilities towards employees, bonus & income from interest on securities and other deposits are being accounted for on cash basis. vi) Professional Taxes and Trade License Fees are to be accounted for on cash basis. vii) Balance Confirmation Certificates from Debtors and Creditors are awaited from the respective parties. viii) Figure’s of Previous Year have been re-arranged and re-grouped wherever considered necessary. As per our report of even date Chartered Accountants F.R. No. 310041E Membership No. 017387 Bhal Chandra Khaitan (Partner) Membership No. 017387 Place : Kolkata Date : 09.02.2016 For & on behalf of Board of Directors Bimal Kumar Nopany (Managing Director) DIN-00694221 Shabnam Agarwal (Director) DIN-02428022 Lakshmikant Tibrawalla (Director) DIN-00423521 Place : Kolkata Date : 09.02.2016 |