National Flask Industries Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2014

(I) BASIS OF ACCOUNTING

(a) Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention as per the mercantile system of accounting and on accrual basis in conformity with the mandatory Accounting Standards referred to in subsection (3C) of section 211 of the said Act except AS 2 on valuation of Inventories, AS 9, Revenue Recognition and AS 15 for Retirement Benefits and the provisions of the Companies Act, 1956.

(b) Accounting Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Differences between actual results and estimates will be recognised in the period in which the results are known/ materialised.

(c) Going Concern

The accumulated loss of the company has eroded the net worth of the company completely during the year ending 31st March,2004.. The Company has become a Sick Industrial Company within the meaning of clause (O) of Section 3 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and The Company has been registered with the Board for Industrial and Financial Reconstruction (BIFR) as per the applicable provisions of the said Act and the BIFR has abated the reference. The Company has filed Application No.274 of 2014 before the BIFR Board for Restoration of BIFR Registration No.210/2004. The Hon'ble Board issued Notice to all concerned Authorities. The BIFR Reference Restoration proceedings is under adjudication.

(d) Bank Dues

The preparation of statement regarding repayment of alleged dues / outstanding of the bankers comes to Rs.2,40,79,60,596/- are based on the generally accepted accounting principles. The captioned alleged amount is arrived at without adjudicating / considering the views/ objections raised against the dues payable. Hence the said alleged amount is not actual payable amount at present.

The company has filed civil suit for damages , under law of torts to the tune of Rs. 1904.17 crores against the consortium bankers, The Saraswat Co-operative Bank Ltd., The Shamrao Vithal Co-operative Bank Ltd. , The North Kanara GSB Co-operative Bank Ltd. and The Cosmos Co-operative Bank Ltd. The same civil suit is pending before Honourable Civil Court Silvassa for adjudication.

The actual repayment of alleged bank dues could not be payable at all or could differ significantly from the amount of Rs.2,40,79,60,596/- when the objections against the repayment of alleged bank dues will be taken into consideration . The actual results could differ significantly in the period in which the result of civil suit for damages is known/materialized/adjudicated by the honourable court.

Hence in view of the above facts and circumstances, at present, there is "No Debt Due" to all the above mentioned banks.

(II) FIXED ASSETS

All assets are stated at historical costs and all costs relating to acquisition and installation are capitalised.

(III) INVENTORIES

Physical verification of raw materials, work in progress and finished goods, packing materials and stores and spares at the year end was carried out by the management , and are quantified and valued as follows:

(a) Raw materials, packing materials and stores and spares are valued at cost using FIFO basis including all duties and taxes.

(b) Quantity of finished goods stock has been arrived on the basis of excise records and for work in progress by adding opening stock to purchases and from it reducing consumption, conversion loss (as certified by the management).

(c) As per revised guidance note on Accounting treatment for Excise Duty issued by the Institute of Chartered Accountants of India, all recoverable taxes paid on inputs should be debited to a separate receivable account and shown as part of the current assets. When credit is actually utilised against the payment of taxes on final products, appropriate accounting entries should be passed to adjust receivable account. Company has not adopted this suggested method. However, there is no effect on profit/loss to the Company due to the non-adoption of above method.

(d) Company has included recoverable taxes and duties in the valuation of raw materials, semi finished & finished goods, stores and spares and packing materials.

(e) The Finished Goods and Semi-finished goods, Raw Materials, Packing Materials were lying since last may years has been reduced to heaps, scrap, salvage and had lost scope for realising any commercial value. The company has therefore, Written-Off the value of Finished Goods, Semi-Finished Goods, Raw Materials and Packing Materials during the year.

(IV) DEPRECIATION

The depreciation is calculated on Straight Line Method at rates specified under Schedule XIV to the Companies Act, 1956. The company has charged Depreciation on single shift basis.

(V) REVENUE ACCOUNTING

(a) The Books of Accounts are maintained on accrual basis of accounting and historical cost convention except for dividend receivable and for the manner in which the treatment of excise duty as refereed in note no.S (III) (b).

(b) Claims are recognized on realization

(c) The company is registered under BIFR . The Honourable BIFR wide its order dated 31st May,2005 and the Honourable Mumbai High Court, wide their order dated 4th July,2005 have directed the bankers to keep the insurance claim amount of Rs.570.16 lacs under " Interest bearing No lien a/c" .

The accrued interest on Rs.570.16 lacs lying with The Saraswat Co-op Bank in "No lien interest bearing A/C", is calculated in conformity with generally accepted rate of interest offered by the bank. The rate of interest shown/ calculated is estimates and assumptions and is arrived at without adjudicating objections raised against the rate of interest by the company. The actual payable amount of interest by the bank on "No Lien A/C" could differ significantly from the amount of Rs.600.46 lacs till March,2014. This accrued interest has not been provided in the books of accounts as the banker has not given the details of interest. The yearwise calculation of accrued interest is given below.

(VI) RETIREMENT BENEFITS

Company has not made provision for gratuity on actuarial basis and has relied on the certificate of their labour consultant, certifying that, company is not required to get the actuarial valuation.

(VII) INVESTMENTS

Investments are classified as long term investments and are stated at cost. No provision has been made for diminution value, if any.

(VIII) BORROWING COST

(a) Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalised for the period, till the assets is ready for its intended use.

(b) No borrowing costs were eligible for the capitalisation during the year.

(c) The Company has provided for interest for the current year, as the consortium bankers have not allowed the waiver of interest during the year.

(IX) PRIOR PERIOD ITEMS

Significant items of income and expenditure which relate to prior accounting periods are accounted in the profit and loss account under the head " Prior Years' Adjustments" other than those occasioned by the events occurring during or after the close of the year and which are treated as relatable to the current year.

(X) Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2012

(I) BASIS OF ACCOUNTING

(a) Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention as per the mercantile system of accounting and on accrual basis in conformity with the mandatory Accounting Standards referred to in subsection (3C) of section 211 of the said Act except AS 2 on valuation of Inventories, AS 9, Revenue Recognition and AS 15 for Retirement Benefits and the provisions of the Companies Act, 1956.

(b) Accounting Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Differences between actual results and estimates will be recognised in the period in which the results are known/ materialised.

(c) Going Concern

The accumulated loss of the company has eroded the net worth of the company completely during the year ending 31st March,2004.. The Company has become a Sick Industrial Company within the meaning of clause (O) of Section 3 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and The Company has been registered with the Board for Industrial and Financial Reconstruction (BIFR) as per the applicable provisions of the said Act and the BIFR has abated the reference. The company thereafter filed an appeal with AAIFR, which was dismissed by the AAIFR. The company will file appeal against the order of AAIFR before the High Court.

(d) Bank Dues

The preparation of statement regarding repayment of alleged dues / outstanding of the bankers comes to Rs. 1,74,26,46,348/- are based on the generally accepted accounting principles. The captioned alleged amount is arrived at without adjudicating / considering the views/ objections raised against the dues payable. Hence the said alleged amount is not actual payable amount at present.

The company has filed civil suit for damages , under law of torts to the tune of Rs. 1904.17 crores against the consortium bankers, The Saraswat Co-operative Bank Ltd., The Shamrao Vithal Co-operative Bank Ltd. , The North Kanara GSB Co-operative Bank Ltd. and The Cosmos Co-operative Bank Ltd. The same civil suit is pending before Honourable Civil Court Silvassa for adjudication.

The actual repayment of alleged bank dues could not be payable at all or could differ significantly from the amount of Rs.1,74,26,46,348/- when the objections against the repayment of alleged bank dues will be taken into consideration . The actual results could differ significantly in the period in which the result of civil suit for damages is known/materialized/adjudicated by the honourable court.

Hence in view of the above facts and circumstances, at present, there is "No Debt Due" to all the above mentioned banks.

(II) FIXED ASSETS

All assets are stated at historical costs and all costs relating to acquisition and installation are capitalised.

(III) INVENTORIES

Physical verification of raw materials, work in progress and finished goods, packing materials and stores and spares at the year end was carried out by the management, and are quantified and valued as follows:

(a) Raw materials, packing materials and stores and spares are valued at cost using FIFO basis including all duties and taxes.

(b) Quantity of finished goods stock has been arrived on the basis of excise records and for work in progress by adding opening stock to purchases and from it reducing consumption, conversion loss (as certified by the management).

Finished goods and semi-finished goods are valued at cost of production, considering raw material value on the basis of average purchase price and appropriate share of manufacturing, office and administration overheads. It is valued at lower of the cost or net realisable value. The cost of finished goods and semi-finished goods has been reduced by 3.5 % this year as measure of wear and tear during the year.

As per revised guidance note on Accounting treatment for Excise Duty issued by the Institute of Chartered Accountants of India, all recoverable taxes paid on inputs should be debited to a separate receivable account and shown as part of the current assets. When credit is actually utilised against the payment of taxes on final products, appropriate accounting entries should be passed to adjust receivable account. Company has not adopted this suggested method. However, there is no effect on profit/loss to the Company due to the non- adoption of above method.

(c) Company has included recoverable taxes and duties in the valuation of raw materials, semi finished & finished goods, stores and spares and packing materials.

(IV) DEPRECIATION

The depreciation is calculated on Straight Line Method at rates specified under Schedule XIV to the Companies Act, 1956. The company has charged Depreciation on single shift basis.

(V) REVENUE ACCOUNTING

(a) The Books of Accounts are maintained on accrual basis of accounting and historical cost convention except for dividend receivable and for the manner in which the treatment of excise duty as refereed in note no. S (III) (b).

(b) Claims are recognized on realization

(c) The company is registered under BIFR . The Honourable BIFR wide its order dated 31st May,2005 and the Honourable Mumbai High Court, wide their order dated 4th July,2005 have directed the bankers to keep the insurance claim amount of Rs.570.16 lacs under " Interest bearing No lien a/c" .

The accrued interest on Rs.570.16 lacs lying with The Saraswat Co-op Bank in "No lien interest bearing A/C", is calculated in confirmity with generally accepted rate of interest offered by the bank. The rate of interest shown/ calculated is estimates and assumptions and is arrived at without adjudicating objections raised against the rate of interest by the company. The actual payable amount of interest by the bank on "No Lien A/C" could differ significantly from the amount of Rs.424.23 lacs till March,2012. This accrued interest has not been provided in the books of accounts as the banker has not given the details of interest. The yearwise calculation of accrued interest is given below.

(VI) RETIREMENT BENEFITS

Company has not made provision for gratuity on actuarial basis and has relied on the certificate of their labour consultant, certifying that, company is not required to get the actuarial valuation.

(VII) INVESTMENTS

Investments are classified as long term investments and are stated at cost. No provision has been made for diminution value, if any.

(VIII) BORROWING COST

(a) Borrowing costs that are directly attributable to the acquisition of fixed assets are , capitalised for the period, till the assets is ready for its intended use.

(b) No borrowing costs were eligible for the capitalisation during the year.

(c) The Company has provided for interest for the current year, as the consortium bankers have not allowed the waiver of interest during the year.

(IX) PRIOR PERIOD ITEMS

Significant items of income and expenditure which relate to prior accounting periods are accounted in the profit and loss account under the head " Prior Years'' Adjustments" other than those occasioned by the events occurring during or after the close of the year and which are treated as relatable to the current year.

(X) Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2010

(a) Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention as per the mercantile system of accounting and on accrual basis in conformity with the mandatory Accounting Standards referred to in subsection (3C) of section 211 of the said Act except AS 2 on valuation of Inventories, AS 9, Revenue Recognition and AS 15 for Retirement Benefits and the provisions of the Companies Act, 1956.

(b) Accounting Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Differences between actual results and estimates will be recognised in the period in which the results are known/ materialised.

(c) Going Concern

The accumulated loss of the company has eroded the net worth of the company completely during the year ending 31st March,2004.. The Company has become a Sick Industrial Company within the meaning of clause (O) of Section 3 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and The Company has been registered with the Board for Industrial and Financial Reconstruction (BIFR) as per the applicable provisions of the said Act and the BIFR has abated the reference. The company thereafter filed an appeal with AAIFR, which was dismissed by the AAIFR. The company will file appeal against the order of AAIFR before the High Court.

(d) Bank Dues

The preparation of statement regarding repayment of alleged dues / outstanding of the bankers comes to Rs.1,26,12,83,634/- are based on the generally accepted accounting principles. The captioned alleged amount is arrived at without adjudicating / considering the views/ objections raised against the dues payable. Hence the said alleged amount is not actual payable amount at present.

The company has filed civil suit for damages , under law of torts to the tune of Rs. 1904.17 crores against the consortium bankers, The Saraswat Co-operative Bank Ltd., The Shamrao Vithal Co-operative Bank Ltd. , The North Kanara GSB Co-operative Bank Ltd. and The Cosmos Co-operative Bank Ltd. The same civil suit is pending before Honourable Civil Court Silvassa for adjudication.

The actual repayment of alleged bank dues could not be payable at all or could differ significantly from the amount of Rs.1,26,12,83,634/- when the objections against the repayment of alleged bank dues will be taken into consideration . The actual results could differ significantly in the period in which the result of civil suit for damages is known/materialized/adjudicated by the honourable court.

Hence in view of the above facts and circumstances, at present, there is "No Debt Due" to all the above mentioned banks.

(II) FIXED ASSETS

All assets are stated at historical costs and all costs relating to acquisition and installation are capitalised.

(III) INVENTORIES

Physical verification of raw materials, work in progress and finished goods, packing materials and stores and spares at the year end was carried out by the management , and are quantified and valued as follows:

(a) Raw materials, packing materials and stores and spares are valued at cost using FIFO basis including all duties and taxes.

(b) Quantity of finished goods stock has been arrived on the basis of excise records and for work in progress by adding opening stock to purchases and from it reducing consumption, conversion loss (as certified by the management).

Finished goods and semi-finished goods are valued at cost of production, considering raw material value on the basis of average purchase price and appropriate share of manufacturing, office and administration overheads. It is valued at lower of the cost or net realisable value. The cost of finished goods and semi-finished goods has been reduced by 3.5 % this year as measure of wear and tear during the year.

As per revised guidance note on Accounting treatment for Excise Duty issued by the Institute of Chartered Accountants of India, all recoverable taxes paid on inputs should be debited to a separate receivable account and shown as part of the current assets. When credit is actually utilised against the payment of taxes on final products, appropriate accounting entries should be passed to adjust receivable account. Company has not adopted this suggested method. However, there is no effect on profit/loss to the Company due to the non-adoption of above method.

(c) Company has included recoverable taxes and duties in the valuation of raw materials, semi finished & finished goods, stores and spares and packing materials.

(IV) DEPRECIATION

The depreciation is calculated on Straight Line Method at rates specified under Schedule XIV to the Companies Act, 1956. The company has charged Depreciation on single shift basis.

(V) REVENUE ACCOUNTING

(a) The Books of Accounts are maintained on accrual basis of accounting and historical cost convention except for dividend receivable and for the manner in which the treatment of excise duty as refereed in note no. S (III) (b).

(b) Claims are recognized on realization

(c) The company is registered under BIFR . The Honourable BIFR wide its order dated 31st May,2005 and the Honourable Mumbai High Court, wide their order dated 4th July,2005 have directed the bankers to keep the insurance claim amount of Rs.570.16 lacs under " Interest bearing No lien a/c" .

(VI) RETIREMENT BENEFITS

Company has not made provision for gratuity on actuarial basis and has relied on the certificate of their labour consultant, certifying that, company is not required to get the actuarial valuation.

(VII) INVESTMENTS

Investments are classified as long term investments and are stated at cost. No provision has been made for diminution value, if any.

(VIII) BORROWING COST

(a) Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalised for the period, till the assets is ready for its intended use.

(b) No borrowing costs were eligible for the capitalisation during the year.

(c) The Company has provided for interest for the current year, as the consortium bankers have not allowed the waiver of interest during the year.

(IX) PRIOR PERIOD ITEMS

Significant items of income and expenditure which relate to prior accounting periods are accounted in the profit and loss account under the head " Prior Years Adjustments" other than those occasioned by the events occurring during or after the close of the year and which are treated as relatable to the current year.

(X) Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.