NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST MARCH 2015 NOTE1 Statement of Significant Accounting Policies Olympic Cards Limited, 'the Company', was incorporated on 21st April 1992 in Chennai. Prior to the incorporation of the Company, the promoters were in the Printing Industry for 46 years. The Company is the leading Manufacturer and Supplier of Invitation cards in India. The Company had successfully come out with a public issue in the month of March 2012. a) Basis of Preparation The financial statements have been brpared and brsented accordance with the generally accepted accounting principal in India (Indian GAAP) under the historical cost convention on an accrual basis. The Company has brpared these financial statements to comply in all material respects with the Notified Accounting Standard by the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 15/2013 dated 13th September, 2013, issued by Ministry of Corporate Affair in respect of section 133 of the Companies Act, 2013 The financial statements have been brpared under the historical cost convention on an accrual basis. The accounting policies applied by the Company are consistent with those used in the brvious years. b) Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Estimates are underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimate is recognized prospectively in the current and future period. c) Tangible Fixed Assets i) Fixed assets are stated at cost, less accumulated debrciation and impairment losses, if any. The cost comprises the purchase price, borrowing cost if capitalization criteria are met anddirectly attributable cost of bringing the asset to its working condition for its intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its brviously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred. Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset isderecognized. ii) Borrowing Costs that are attributable to the acquisition or construction of assets that necessarily take a substantial period of time to get ready for its intended use are capitalized as part of the cost of qualifying asset when it is possible that they will result in future economic benefits and the cost can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred. e) Inventories i) Inventories are valued at the lower of cost and net realizable value. ii) Cost includes all direct costs and applicable production overheads in the case of finished goods and work in progress, incurred in bringing such inventories to their brsent location and condition. Cost also includes all taxes and duties, but excludes duties and taxes that are subsequently recoverable from taxing authorities. iii) Raw materials, bought out items, consumables and stores and spares are valued at lower of weighted average cost and net realizable value. iv) Finished Goods are valued at lower of cost and net realizable value. f) Impairment a. The carrying amounts of assets 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 the greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. b. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. g) Leases 1) Leases where the lessor, effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight line basis over the lease term. 2) Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight line basis over the lease term. Costs, including debrciation are recognized as an expense in the Profit and Loss. Initial Direct Costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account. 3) The Company has taken certain brmises under Operating Leases, which expire at various dates in future years and renewable for further period at the option of the Company. There are no restrictions imposed by the lease arrangements. The minimum lease rentals to be paid in respect of these leases are as follows: h) Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. i) Revenue Recognition Revenue is recognized to the extent of probable economic benefits that will flow to the Company and the revenue can be reliably measured. Sales Income Income from sales is booked based on agreements/arrangements with the concerned parties or as and when revenue can be reliably measured. Interest Income Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. j) Foreign Currency Translation initial Recognition Foreign Currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign Currency monetary items are reported using the closing rate. 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 Exchange differences, in respect of accounting periods commencing on or after 7th December 2006, arising on reporting of long term foreign currency monetary items, at rates different from those at which they were initially recorded during the period, or reported in brvious financial statements, in so far as they relate to the acquisition of a debrciable capital asset, are added to or deducted from the cost of the asset and are debrciated over the balance life of the asset. Exchange differences arising on the settlement of monetary items are not covered above; or on reporting company's monetary items, at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expenses in the year in which they arise. k) Retirement and other employee benefits a. Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective fund are due. There are no other obligations other than the contribution payable to the respective fund. b. Upto the 31st March 2010Gratuity has been accounted on payment basis. With effect from the financial year 2010-11, the above procedure has been changed and a Master policy has been taken with the LIC of India and the brmium is debited to the annual P&L account every year. The settlement of gratuity is done by the LIC of India. The above accounting policy is in line with AS 15. I) Miscellaneous Expenditure Deferred Revenue Expenses & Preliminary Expenses incurred have been amortizedduring the year as per the requirement of AS-26, issued by ICAI. m) Income Taxes Tax expense comprises current tax, deferred tax and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. n) Segment Reporting Policies The Company primarily operates in a single business segment, 'Manufacturing of Invitation Cards', within India and hence does not require any separate segment reporting policies. o) Earnings per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders 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. p) Provisions A provision is recognized when an enterprise has a brsent obligation as a result of past event 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 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. q) Cash and Cash equivalents a. Cash and cash equivalents in the balance sheet comprise of cash at bank and Cash in hand Rs. 26,37,017/- b. Cash and cash equivalents comprises of bank deposits given for bank & others amounting to Rs. 24,16,615/-that are not available for use by it. |