NOTE FORMING PART OF FINANCIAL STATEMENT FOR THE YEAR ENDED 31.03.2015 I. SIGNIFICANT ACCOUNTING POLICIES A. System of Accounting: The Financial Statements are brpared under historical cost convention and on accrual basis in accordance with the applicable accounting standards. B. Use of Estimates: The brparation of the financial statements 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 the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized. C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability. D. Fixed Assets/Borrowing Costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit /TED and VAT, if any, to the extent it could be adjusted against the Excise Duty/VAT liability of the Company. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16. Debrciation: Debrciation on Fixed Assets has been provided on useful life of the assets in accordance with Schedule II of the Companies Act, 2013. Debrciable value of assets not having useful life as at 01-04-2014 has been adjusted in retained earnings. Taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date. G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary. H. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange brvailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates brvailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the brmium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes. The Company has no foreign operations. I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment. J. Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments. K. Provisions, contingent liabilities and contingent assets: 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. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates. L. Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. M. Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts. N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into three segments - Engineering, Textiles and Windmills. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. Self Consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past. 11. Figures have been rounded off to Rs. in Lakhs and brvious year figures have been regrouped/ rearranged wherever necessary. Previous year figures are not comparable in view of amalgamation of subsidiary company in the current year. Coimbatore 10.08.2015 As per our report attached For N.R. DORAISWAMI & CO Chartered Accountants (Firm Registration No. 000771S) (Sd/-) SUGUNA RAVICHANDRAN Partner, (Membership No.207893) (Sd/-) V.J. JAYARAMAN Chairman Cum Managing Director (Sd/-) D. RANGANATHAN Whole-Time Director (Sd/-) J. ANAND Managing Director (Sd/-) V.K. SWAMINATHAN Company Secretary |