Notes forming part of the Financial Statements for the year ended 31st March 2015 NOTE:1. SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF brPARATION OF FINANCIAL STATEMENTS The financial statements are brpared under the historical cost convention on accrual basis, in accordance with Generally Accepted Accounting Principles and the applicable Accounting Standards notified under section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014 in the principles of a going concern. The accounting policies adopted in the brparation of the financial statements are consistent with those of the brvious year. 2. USE OF ESTIMATES The brparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes, requiring a material adjustment in the carrying amounts of assets or liabilities in the future periods. Difference between the actual results and estimates are recognized in the period in which the results are known or materialized. 3. INVENTORIES Land and Buildings held as Stock-in-Trade for Property Development are stated at lower of cost and net realizable value. 4. REVENUE RECOGNITION Revenue is recognized to the extent that it is probable that economic benefits will flow to the company and the revenue can be reliably measured. Sales and other income are accounted on accrual basis. Revenue from sale of goods is recognized when significant risks and rewards of ownership are transferred to the customers. Dividend income is recognized when the right to receive the same is established. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. 5. FIXED ASSETS AND DEbrCIATION i. Fixed Assets are stated at cost (net of CENVAT / TNVAT wherever applicable) inclusive of expenses directly relating to bringing the asset to its working condition for the intended use, less accumulated debrciation. Interest on borrowing utilized for acquisition of fixed assets is capitalized and considered as cost of the asset concerned if capitalization criteria are met. ii. Debrciation is provided on Written Down Value method in accordance with Schedule II of the Companies Act, 2013. 6. INVESTMENTS Long term investments are stated at cost. Diminution in the value of investments other than temporary in nature is provided for. 7. BORROWING COSTS Borrowing costs attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of such assets up-to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred. 8. SEGMENT REPORTING Property development is the main business of this company and this is the only reportable segment. 9. LEASES Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Lease rental received in respect of operating leasearrangements are recognized as income in the Statement of Profit and Loss on a straight line basis over the lease term. 10. TAXES ON INCOME Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in the future. In situations where the company has unabsorbed debrciation or carried forward losses for tax purposes, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset 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 reporting date. The company writes-down the carrying amount of 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 Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets. 11. MAT CREDIT Minimum alternate tax (MAT) payable in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period. 12. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. 13. IMPAIRMENT OF ASSETS All assets other than inventories are reviewed for impairment at every balance sheet date for events or changes in circumstances that indicate that the carrying amount may not be recoverable. There is no impairment loss during the year. 14. PROVISION AND CONTINGENCIES Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are not recognized but disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements. NOTE. 18: OTHER NOTES ON ACCOUNTS 1. CORPORATE INFORMATION S V Global Mill Limited was incorporated on 30th October 2007 under the Companies Act, 1956 and is listed in the Bombay stock Exchange. The company is engaged in the business of real estate property development and has undertaken the related activities during the year in this regard 2. In respect of Lands to the extent of 3 acres and 16 guntas acquired during the year 2013-14, by Government of Karnataka for public purpose for which the Company is entitled to compensation under the Right to Fair Compensation & Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 (LARR 2013), the company has received the Final award and the total compensation amount of Rs.142.56 crores has been recognized as Income during the year. As per section 96 of the LARR Act, no Income Tax shall be levied on any award under the said Act. 3 Provision for Dividend on cumulative brference shares Provision for dividend on cumulative shares has been made at Rs. 0.45 per share on 9% brference shares of 2,39,02,516 from 01.10.2005 to 31.03.2015 and 0.4875 per share on 9.75% brference shares of 39,200 from 01.07.2006 to 31.03.2015. 4. Deferred Tax Asset: The company has carry forward losses under the income tax law as at the reporting date. In the absence of virtual certainty supported by convincing evidence no Deferred Tax Asset has been recognized in the financial statements. Similarly Deferred Tax Asset in respect of timing difference on account of difference between book debrciation and tax debrciation has been recognized in the financial statements only to the extent of reducing the opening balance of Deferred Tax Liability of Rs.24042/- to NIL. The company is in the process of approaching the Income Tax Department for apportioning the brought forward losses and business losses as per the Income Tax Act. Hence, on a conservative basis, the net deferred tax assets are not recognized in the balance sheet as on 31st March 2015 as a measure of prudence. 5. The Managing Director Mr E. Shanmugam is eligible for a Remuneration of up to Rs.5 lakhs per annum as per the Resolution of the Shareholders dated 29-09-2012. However, in view of the Losses during the years 2012-13 and 2013-14, the Managing Director was not paid any remuneration for these years. Now in view of profits during the current year and as per the arrangement with the Managing Director, a sum of Rs.48000/- per annum has been provided towards Remuneration for the financial years 2012-13, 2013-14 & 2014-15. 6. The company has not received any information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures if any relating to amounts unpaid as at the yearend together with interest paid / payable as required under the said Act have not been made. 7. Labour case: Labour disputes case (amount not ascertained) is pending with the High court of Karnataka, Bangalore, Karnataka State. However the company is contesting the case against the labour claims. 8. Capital expenditure commitments pending and remaining to be executed as on March 31, 2015 Rs.419.41 Lakhs. 9. The company has revised the useful life of fixed assets in accordance with Part C of Schedule II to the Companies Act, 2013. Consequently the impact on Statement of Profit and Loss for the year ended on March 31, 2015 is increase in debrciation charge by Rs.19.15 Lakhs. 10. Figures in the financial statements and in the Notes have been rounded off to the nearest rupee. 11. Previous year figures have been regrouped wherever necessary to conform to current period classification/ grouping. As per our report attached of even date For M.KUPPUSWAMY PSG & CO LLP Chartered Accountants FRN : 001616S M.K. KRISHNAN Partner Membership No : 020116 M.ETHIRAJ Chairman E.SHANMUGAM Managing Director V. KRISHNAN Chief Financial Officer S.S. ARUNACHALAM Secretary Place: Chennai Date: 27.05.2015 |