Notes Forming Part of the Financial Statements Note-1 Significant Accounting Policies a) Basis of Preparation of Financial Statements The Financial Statements have been brpared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles and provisions of the Companies Act, 2013. All Income and Expenditure having material bearing on the Financial Statements are recognized on accrual basis. b) Use of Estimates The brparation of the Financial Statements in conformity with the Generally Accepted Accounting Policies requires the management to make estimates and assumptions that affect the reported amount of Assets and Liabilities, Revenues and Expenses and disclosure of Contingent Liabilities. Such estimation and assumptions are based on management's evaluation of relevant facts and circumstances as on date of Financial Statements. Difference between the actual results and estimates are recognized in the period in which the result are known / materialized. c) Revenue Recognition • Revenue / Income and Cost / Expenditure are generally accounted on accrual basis as they are earned / incurred, except those with significant uncertainties. • Dividend Income from investment is recognized as and when received. • Other Incomes are accounted for on accrual basis except when the recovery is uncertain, it is accounted for on receipt basis. • Claims made against the Company are evaluated as to type thereof, period for which they are outstanding and appropriate provisions made. Claims are stated net of recoveries from insurance Companies and others. • Administrative and other expenses are stated net of recoveries, wherever applicable. d) Fixed Assets Fixed Assets acquired by the Company are reported at acquisition value, with deductions for accumulated debrciation and impairment of losses, if any. The acquisition value indicates the purchase price and expenses directly attributable to assets to bring it to the office and in the working condition for its intended use. e) Debrciation Till the year ended March 31, 2014, debrciation rates brscribed under schedule XIV were treated minimum rates and the Company was not allowed to charge debrciation even if such lower rates were justified by the estimated useful life of the asset. Schedule II to the Companies Act, 2013 brscribes useful lives for fixed assets which, in many cases, are different from lives brscribed under the erstwhile Schedule XIV. Considering the applicability of Schedule II, the management has re-estimated useful lives and residual values of all its fixed assets. The management believes that debrciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets. Debrciation is systematically allocated over the useful life of an asset as specified in Part C of Schedule II of the Companies Act, 2013. f) Investments Investments are accounted at the cost plus brokerage and stamp charges. Long term Investments are valued at cost less provision for diminution other than temporary, in value, if any. Profits or Losses on investment are calculated on FIFO Method and are accounted as and when realized. g) Inventories Inventories at year-end are valued at the Lower of the Cost Price or Net Realizable Value after providing for obsolescence and other losses, wherever considered necessary. Cost of inventories comprises of cost of purchase, cost of conversion and costs incurred in bringing them to their respective brsent location and condition. h) Miscellaneous Expenditure Preliminary expenses and br-operative expenses are amortized over a period of 10 years. i) Retirement Benefits i) Short term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss of the year for which the related service is rendered. ii) Defined Contribution Plan: Monthly contribution to the provident fund which is under defined contribution schemes are charged to Statement of Profit & Loss and deposited with the provident fund authorities on monthly basis. iii) Defined Benefit Plans: Gratuities to employees are covered under the employees' group gratuity schemes and the brmium is paid on the basis of their actuarial valuation using the projected unit credit method. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit and Loss. Any short falls in case of brmature resignation or termination to the extent not reimbursed by LIC is being absorbed in the year of payment. iv) Termination benefits are charged to the Statement of Profit and Loss in the year of accrual. j) Taxes on Income i). Current tax is determined on the basis of amount of tax payable on taxable income for the year. ii) In accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, amount of the deferred tax for timing difference between the book and tax profits for the year is accounted for using the tax rate and laws that have been enacted or substantially enacted as at the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable certainty that the assets can be realized in future. k) Expenses Material known liabilities are provided for & on the basis of available information / estimates with the Management. Whenever external evidences for expenses are not available, Management has taken care of proper authorization of such expenses. l) Transaction in Foreign Currency Foreign currency transactions are recorded at the exchange rate brvailing on the date of such transactions. Foreign currency monetary assets and liabilities are reported using the closing rates. Gains and losses arising on account of difference in foreign exchange rates on settlement / translation of monetary assets and liabilities on the closing date are recognized in the Statement of Profit and Loss. m) Government Grants and Subsidies Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant / subsidy will be received. Where the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an expense, it is deducted from related expenses. n) Borrowing Cost Borrowing costs are recognized in the period to which they relate, regardless of how the funds have been utilized, except where they relate to the financing of new assets requiring a substantial period of time for their intended future use. Interest on borrowings, if any, is capitalized up to the date when the asset is ready for its intended use. The amount of interest capitalized for the period is determined by applying the interest rate applicable to the appropriate borrowings. o) Earnings Per Share Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Dilutive earning per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive. p) Impairments of Assets At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment of loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the assets to their brsent value. q) Provisions and Contingent Liabilities Provisions involving substantial degrees of estimation in measurement are recognized when there is brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions (excluding long term benefits) 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. Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the Financial Statements. r) Cash Flow Statement The Cash Flow Statement is brpared by the "Indirect Method" set out in Accounting Standard 3 on Cash Flow Statements and brsents the cash flow by Operating, Investing and Financing activities of the Company. Cash and Cash Equivalents brsented in the Cash Flow Statement consist of Cash on Hand, Bank Balances and Demand Deposits with Banks. NOTE - 31 1. The balances in respect of Sundry Debtors, Current Liabilities and Loans and Advances are subject to confirmations and reconciliations, if any. 2. In the opinion of Board of Directors & Management, the Current Assets, Current Liabilities, Unsecured Loans, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The Provisions for debrciation and for all known liabilities are adequate and not in excess of amounts reasonably necessary. 3. In the opinion of Management, the Company is mainly engaged in a single segment of manufacturing & trading of non ferrous metals, therefore there are no separate reportable segments as per Accounting Standard (AS-17) "Segment Reporting". 6. The Company has not received information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, disclosure, if any, relating to amount unpaid as at the Balance Sheet date together with interest paid or payable as per the requirement under the said act, have not been made. 7. In the opinion of the Board, Current Assets and Loans & Advances have a value of the least equal to the amounts shown in the Balance Sheet, if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary. 8. For the Financial Year Ended March 31, 2015 the Board of Directors of the Company have recommended a dividend of Rs. 1/- (10%) Per Share (2014: Rs. Nil) to Equity Shareholders. Dividend, if approved, at the ensuing Annual General Meeting, will be paid / credited to those members whose names appear on the Company's Register of Members on Record Date. 9. Previous year's figures have been regrouped, reclassified & rearranged wherever considered necessary. 10. Expenditure incurred on employees who were in receipt of not less than Rs. 60,00,000/- per year if employed throughout the year and Rs. 5,00,000/- per month if employed for a part of a month: Rs. NIL As Per Our Report of Even Date Attached For Raman M. Jain & Co Chartered Accountants Firm's Registration No.: 113290W Raman M. Jain Partner Membership No.: 045790 For & on Behalf of Board of Directors Mahendra R. Shah Chairman Jatin M. Shah Managing Director Riddhi N. Shah Company Secretary Vijay Lathi Chief Financial Officer Place : Ahmedabad Date: May 22, 2015 |