Background
Mardia Samyoung Capillary Tubes Company Limited (“the Company”) is a company incorporated on 19.10.1992 under the Companies Act 1956. The Companies CIN is 174999MH1992PLCD69104.
Significant accounting Policies1:1. Basis of Preparation of Financial Statements
The accompanying financial statements have been prepared in compliance with the requirements under section 133 of the Companies Act, 2013 (to the extent notified) (the Act) read with Rule 7 of the Companies (Accounts) Rules 2014 and other generally accepted accounting principles (GAAP) in India to the extent applicable under the historical cost convention on the accrual basis of accounting, GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards)Rules 2006.
All amount are rounded off to the nearest thousands (including two decimals) unless otherwise stated.
1:2. Current/Non-Current Classification
The Schedule III to the Act required assets and liabilities to be classified as either current or non-current 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 sales 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.
Current assets include the current portion of non-current assets.
All other assets are classified as non-current.
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 liabilities include current portion of non-current liabilities.
All other liabilities are classified as non-current.
1:3. Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company normal operating cycle and other criteria set out above which are in accordance with the Schedule III to the Act.
Based on the nature of services and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
1:4.Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future period.
1:5. Borrowing cost
Borrowing costs that are attributable to the acquisition, construction or production of qualifying asset are treated as direct cost and are considered as part of the cost of such assets
A qualifying asset is an asset that necessary requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.
1:6 Earnings per share
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholder's for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted EPS is computed by diving the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.
1:7 Provisions and contingencies
A provision is recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources, Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
1:8 Property, Plant and Equipment and depreciation
Property, Plant and Equipment are carried at cost of acquisition or construction less accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price (excluding refundable taxes) borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Depreciation on Property, Plant and Equipment has been provided on straight line method as prescribed in Schedule II to the Companies. Act 2013, except in respect of certain assets in whose case the like of the assets has been assessed based on technical certification taking into account the nature of the assets the estimated usage of the assets the operating conditions of the assets past history of replacement, anticipated technological changes etc.
The estimated useful lives of the tangible fixed assets are as per Schedule II of Companies. Act 2013,
During the year the company has sold land, building and industrial gala.
During the year the company has sold its entire plant & machinery and written off electrical fittings, generator, computers etc
1:9 Inventories
Inventories are valued at lower of cost and estimated net realisable value, after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. Cost is computed on weighted average basis.
Net realizable 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.
During the year the company has written off the entire inventories due to being obsolete
1:10 Foreign exchange transactions
i. Transaction in foreign currency are recorded at the exchange rates prevailing on the dates of the transactions. Variations, if any on actual realisation/payment are considered in the Profit and Loss Account.
ii. Current assets and current liabilities relating to transactions in foreign currency remaining unsettled at the year end are restated at year end rates and differences, if any are considered in the Profit and Loss Account.
iii. Exchange differences, if any arising on settlement of liabilities incurred for purchase of fixed assets are considered in the Profit and Loss Account.
1:11 Employee Benefits
a. Defined Contribution Plans
The Company has defined contribution plan for post employment benefits namely provident fund and Maharashtra labour welfare fund which are recognised by the Income Tax authorities.
Under the provident fund plan the Company contributes to a Government administered provident fund on behalf of its employees and has no further obligation beyond making its contribution.
The Company's contributions to the above funds are changed to expenses every year.
1:12 Investments
Long-term investments are stated at cost. Provision is made to recognize a decline, other than temporary in value of long term Investments and is determined separately for each individual investment. Current Investments are stated at lower of cost and fair value, computed separately in respect of each category of investment.
1:13 Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the lower of recoverable amount and the carrying amount that would have been determined had no impairment loss been recognised.
1:14 Segment Reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive management in deciding how to allocate resources and in assessing performance. The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment expenses segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis, have been included under unallocated revenue/expenses/assets / liabilities.
1:15 Transfer Pricing
The Company's management is of the opinion that its international transactions are at arm's length so the appropriate legislation will not have an impact on the financial statements, particularly on the tax expenses and that of provision for taxation.
1:16. Operating lease
Leases where the lessor retains, substantially all the risks and rewards incidental to ownership of the leased assets are classified as operating lease. Operating lease expense are recognized in the statement of profit and loss on a straight - line basis over the lease term.
1:17 Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Interest Income
Interest Income from a financial asset is recognised when it is probable that the economic benefit will flow to the company and the amount of Income can be measured reliably. Interest Income is accrued on a time basis by reference to the amortised cost and at the effective interest rate applicable.
1:18 Taxation
Income Tax expense comprises current income tax (i.e. amount of tax for the period determined in accordance with the income tax law) and deferred tax charge or credit (reflecting 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 recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future, however where there is unabsorbed depreciation or carried forward loss under taxation lows deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably /virtually certain (as the case may be) to be realized.
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