SIGNIFICANT ACCOUNTING POLICIES 1. ACCOUNTING ASSUMPTIONS: The accounts have been brpared under the historic cost convention on the basis of a going concern concept, with revenues recognized and expenses accounted for on their accrual, with due provisions/adjustments for obligations that have been crystallised but not yet incurred. Accounting policies not specifically referred to herein below are consistent and in consonance with generally accepted accounting principles brvalent in India. 2. BASIS OF brSENTATION: The structures of the accounts have been drawn in accordance with the Schedule III of the Companies Act, 2013. 3. FIXED ASSETS: Fixed assets are stated at cost less debrciation. Cost includes freight, installation charges, duties, taxes, insurance, interest levied on borrowed funds used to finance assets in the course of construction and installation and other related incidental charges. Expenditure for additions and improvements are capitalized and expenditure for maintenance and repairs are charged to profit and loss account. When assets are sold or retired, their cost or valuation and accumulated debrciation are removed from the accounts and any gain or loss resulting from their disposal is included in the profit and loss account. 4. DEbrCIATION: Debrciation on fixed assets (except land) has been provided on Straight Line Method as per rates brscribed in Schedule II to the Companies Act, 2013. 5. Impairment The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized where ever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assesing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. 6. INVESTMENTS: All investments are stated at cost i.e., cost of acquisition is inclusive of expenditure incidental to acquisition. Provision for diminution in their market value of current investments is recognized and charged to Profit and Loss Account. 7. INVENTORIES: Inventories are valued as under: a) Raw-materials, packing materials, stores and spares: At cost (determined on a weighted average basis) which includes freight, duty and insurance b) Work-in-process: At cost plus allocation and apportionment of relevant factory overheads applicable till the stage of completion. c) Finished goods: 1. At factory: Valued at lower of cost or market value. Cost computed on the basis of material, direct labour and allocation and apportionment of relevant factory overheads incurred and exise duty payable on such goods. 2. At branches: Valued at lower of cost or market value. Cost computed on the basis of material, direct labour and allocation and apportionment of relevant factory overheads including excise duty paid on such goods and transport charges to the branch. 8. PROVISIONS: A. In accordance with year-end review of the reliability of Trade receivables and other receivables, specific provisions are created and maintained against those Trade receivables and other receivables that in the opinion of the management may not be recovered partially or fully. B. Provisions are made for non-moving, obsolete and unserviceable inventories / stores on the basis of technical evaluation. 9. REVENUE RECOGNITION: Sale of goods is recognized at the point of dispatch of finished goods to Customers. Sales are exclusive of excise duty and sales tax. Income from interest on call money arrears accounted for on cash basis. 10. Borrowing Cost Borrowing Costs directly attributable to acquisition and construction of qualifying assets are capitalised as a part of the cost of such asset upto the date when such asset when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account. 11. RESEARCH AND DEVELOPMENT: Expenditure pertaining to Research and Development is charged to revenue in the year in which it is incurred. 12. EMPLOYEE BENEFITS A) In respect of Gratuity for eligible employees, provision is made as per Acturial Valuation certified by Mr. K.V.Y .Sastry for the year ended 31/03/2015 B) In respect of leave encashment, provision is made based on salary as at March, 31, 2015 for the leave accumulated and credited to the respective employees. 13. PRIOR-PERIOD ITEMS: An item has been determined as prior period item in accordance with the accounting standards issued by the ICAI 14. EXCEPTIONAL ITEM: An item of income/expense arising from certain ordinary activities of the Company which are of such size, nature or incidence that their disclosure is relevant to be made separately are treated as exceptional item. 15. FOREIGN CURRENCY TRANSACTIONS: Foreign currency transactions are accounted at the rate brvailing on the transaction date. Exchange differences if any arising on the date of settlement have been charged to profit & loss account. 16. TAXES ON INCOME Current tax is determined in accordance with the provisions of the Income Tax Act, 1961, as the amount of tax payable to the Tax Authorities in respect of taxable income for the year. Deferred tax: Since the company has substantial carried forward business losses and unabsorbed debrciation, it is unlikely to have taxable profits in the near future and the deferred tax liability is much lesser than deferred tax assets and hence it is considered prudent not to recognize either deferred tax assets or deferred tax liability. 17. TREATMENT OF CONTINGENT LIABILITIES: Liabilities, which may or may not arise and not crystallized as at the end of accounting period, have been shown as contingent liabilities. 1. Balances of Trade receivables,payables and loans & advances are subject to confirmation and reconciliation. 2. Figures have been rounded off to the nearest rupee. 3. Previous years figures have been regrouped / reclassified where ever necessary to conform to the current year's classification. For S.R. Mohan & Co For and on behalf of the Board of Directors Chartered Accountants FRN:002111S Sd/- B. BRAHMANANDAM Partner Membership No 020026 Sd/- P. ANANTH PAI DIRECTOR Sd/- U.V. KINI COMPANY SECRETARY Sd/- G S RAM WHOLE TIME DIRECTOR Sd/- K.G. RAO CHIEF FINANCIAL OFFICER Place : HYDERABAD Date : 20.08.2015 |