1. SIGNIFICANT ACCOUNTING POLICIES 2.1 General The financial statements have been brpared under historical cost convention in accordance with Generally Accepted Accounting Principles in India and the provisions of the Companies Act, 2013 as adopted consistently by the company. 2.2 Fixed Assets Fixed Assets, except Land and Building which were revalued as on 30.04.85, are stated at their original cost of acquisition including incidental expenditure related thereto, taxes, duties other than modvat credit availed and installation expenses. Net surplus or deficiency that arise when an asset is disposed/discarded/demolished/ destroyed, are duly accounted. 2.3 Debrciation Debrciation on Fixed Assets are provided on Straight Line Method at the rates and manner brscribed under Schedule II of the Companies Act, 2013. 2.4 Investments Investments are stated at cost. Provisions are made to recognize permanent diminution in the value of Investments. 2.5 Inventories Inventories are valued as under: Finished Goods : At lower of cost or realisable value Work in Progress : At cost inclusive of appropriate overheads Materials, Components & Spares : At weighted average cost including taxes & duties Goods in transit : At cost 2.6 Foreign Currency Transaction Transactions in Foreign Currency, other than those covered by forward contracts are accounted at exchange rates brvailing on the date of the transaction. Assets and liabilities in foreign currency not covered by forward contracts are translated at exchange rate brvailing on the date of the Balance Sheet. The Net loss, if any, on conversion is charged to revenue / asset account but gains if in significant, is not accounted for 2.7 Research and Development Fixed Assets purchased for Research & Development are capitalized and debrciated as per the Company's policy. 2.8 Retirement Benefit Contribution to recognised Provident Fund is made at brdetermined rates. The Company has an arrangement with Life Insurance Corporation of India to administer its Gratuity and Superannuation Schemes. The Gratuity liability calculated as per Actuarial Valuation is Rs. 83.22 Lakhs for existing employees. The liability for the exit employees is Rs. 26.94 Lakhs. The following table sets out the status of the plan as required under AS 15: 2.9 Borrowing Cost Borrowing Cost that are directly attributable to the acquisition, Construction or production of a qualifying asset are capitalised as part of the asset. Other borrowing costs are recognized as expensein the period in which the yare incurred. 2.10 Revenue Recognition Revenue in respect of Sale of Products is recognised when goods are supplied to customers. Revenue from Annual Maintenance Contract (AMC) is recognized on time proportion basis. Service Income is accounted as and when services are rendered. Dividend income on Investments is accounted when the right to receive the payment is established. Interest income is recognised on a time proportionate basis considering the amount outstanding and rate applicable. Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities 2.11 Contingent Liability All known liabilities are provided for in the accounts except liabilities of a contingent nature, which are adequately disclosed in accounts. 2.12. NOTES ON ACCOUNTS 23.1 There are no secured loans at the end of the reporting period. 2.13 Share Capital 2.3.1 Share Capital includes 21,930 EquityShares of Rs.10/- each allotted as Fully Paid Up for consideration other than cash and 96,50,000 Equity Shares of Rs. 10/- each allotted as Bonus Shares by Capitalisation of General Reserve during an earlier period. 2.3.2 1,69,58,682 Non- Convertible, Non-Cumulative 0.001% Preference Shares of Rs. 100/- each, were allotted on 23rd September, 2005, pursuant to the Scheme of Arrangement approved by the Hon. High Court of Kerala, Ernakulam. Out of which, 1,41,24,682 shares are redeemable in four equal installments at the end of the 11th,12th,13th and 14th year and the balance of 28,34,000 shares are redeemable in ten equal installments commencing from 31st March, 2008. The Company is yet to redeem the sebrference shares and the amount outstanding as on 31st March 2015, was Rs. 22.67crores. Company is making arrangements for the redemption of the above and the same will be redeemed in due course. 3. There are no Micro and Small Enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the company. 4. As the company has no qualifying assets as defined in Accounting Standard 16, amount of borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying asset have not been capitalised. 5. In accordance with the provisions of Accounting Standard 17, the Company has only one reporting segment viz, Electronic Industry. Segmental report in gasde fined is the refore not applicable. 6 The amount provided by the company in the books of account towards gratuity is sufficient to cover the actuarial value of liability as certified by an external valuer. However, due to shortage of funds, the company is yet to fund the full actuarial liability under the scheme administered by LIC of India. As per the agreement with employees, the company has no liability for payment of leave encashment to its employees. 7. The company has obtained confirmation of balances from its debtors. The balances due to creditors including Group Companies are subject to confirmation/ reconciliation. 8. Extra Ordinary Item of Rs. 223.34 lakhs in the Profit and Loss account rebrsents the write back of balances pertains to discontinued business. 9. Remuneration has been paid/provided to the Chairman & Managing Director based on the approval received from the Central Government vide its letter B70022835/2013-CL-VII dated 17th October 2013. 10. Scheme of Arrangement for reduction of capital: The Company has charged a sum of Rs. 131.43 crores being the losses earlier treated as Deferred Tax Asset (DTA) to the Statement of Profit & Loss as per the Accounting Standards. The Company has decided to implement a Scheme of Arrangement (SOA) to set off the accumulated losses of Rs.184.09 crores against the entire credit balance in share brmium account through a court approved scheme. The SOA has been approved by the SEBI, Stock Exchanges and members of the Company. Accordingly, the share brmium account and the balance in Statement of Profit & Loss rebrsent gross figures. The approval from the Honourable High Court of Kerala is awaited. 11. Employees Stock Option Scheme (ESOP): The last date for exercising the stock options granted to the eligible employees and directors of the company was 8th November, 2012 and the details of options exercised, lapsed and other relevant particulars were covered in the brvious financial year. Since, the company has not granted any further options later and accordingly, the details as required to be furnished under ESOP scheme is not applicable to the current financial year. 12 Previous year's figures have been regrouped/ reclassified, wherever necessary, to correspond with the current year's classification/ disclosure. As per our report attached For T Velupillai & Co., Chartered Accountants Firm's Registration No: 004592S M S Ram Partner, M. No. 026687 For and on behalf of the Board of Directors Ajit G Nambiar Chairman & Managing Director Capt. S Prabhala Director D Krishnan Company Secretary Bangalore S V Ganesh Chief Financial Officer Date : 26th May, 2015 |