NOTES TO FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of brparation The financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards specified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014, other pronouncements of the Institute of Chartered Accountants of India and the relevant provisions of the Act and also the guidelines issued by the Securities and Exchange Board of India (SEBI). The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year. The financial statements are brsented in Indian rupees rounded off to the nearest rupee. All assets and liabilities have been classified as current or non-current as per the company's normal operating cycle and other criteria set out in Schedule III to the Act. Being service provider, the company has assumed its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities. B. Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and reported amounts of revenues and expenses for the year. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between actual results and estimates are recognised in the period in which the results are known / materialised and the difference is classified in statement of Profit and Loss using the same classification as was used brviously for the estimate. C. Tangible assets and debrciation i) Tangible fixed assets are stated at historical cost less accumulated debrciation thereon and impairment losses, if any. Historical cost is inclusive of freight, duties and taxes and incidental expenses related to acquisition. ii) Debrciation is charged on straight line basis so as to write off the debrciable amount of the asset over the useful lives specified in Schedule II to the Act. The useful life of the assets are periodically reviewed and re-determined based on a technical evaluation and expected use and the unamortised debrciable amount is charged over the remaining useful life of such assets. In certain cases, the useful life of assets so determined being different from the useful life as specified under Part C of Schedule II of the Act, are as given below: Nature of Asset Useful Life Machinery in the nature of Geophone strings and cables 5 Years Machinery in the nature of equipment used for Seismic Survey 5 Years D. Intangible assets and amortisation Cost relating to an acquired Intangible asset is being capitalised and being amortised over the period of its estimated useful life. E. 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 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 brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of amortised historical cost. F. Foreign exchange transactions Transactions in Foreign Exchange, other than those covered by forward contracts are accounted for at the exchange rate brvailing on the date of transactions. Exchange differences arising on foreign currency transactions settled during the year Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date other than those covered by forward contracts are translated at the year end rates. The resultant exchange differences are recognised in the Statement of Profit and Loss. Non-monetary assets and liabilities are recorded at the rates brvailing on the date of the transaction. G. Investments i. Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. ii. Current investments are carried at lower of cost and fair value determined on individual investment basis. iii. Long-term investments are carried at cost of acquisition. Provision is made for diminution, other than temporary, in the value of investments. iv. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss. H. Inventories Stock of Stores and spares is valued at lower of cost and net realisable value. Cost is determined considering the cost of purchase and other costs incurred for acquisition and on the basis of first in first out method (FIFO). I. Employee stock option scheme In accordance with the Securities and Exchange Board of India guidelines, the excess of the market price of the shares, at the date of grant of option under the employee stock option scheme, over the exercise price is treated as employee compensation and the same is being amortised over the vesting period of the stock options. J. Taxes on income i. Tax expenses is the aggregate of current income tax, MAT credit entitlement/utilisation and deferred income tax charge / (credit) for the year. ii. Current income tax: The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961. The Company also provides for such disallowances made on completion of assessment pending appeals, as considered appropriate depending on the merits of each case. iii. Deferred income tax: Deferred income taxes are recognised for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes. The effect on deferred tax assets and liabilities of a change in tax rates is recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty or virtual certainty, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised. iv. Minimum Alternate Tax (MAT) Credit: MAT credit is recognised, as an Asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, in the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendation contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period. K. Proposed dividend Proposed Dividend as proposed by the Board of Directors is provided in the books of account, pending approval at the Annual General Meeting Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as an expense on straight line basis over the period of lease. M. Borrowing costs Borrowing costs attributable to the acquisition of qualifying asset are capitalised as part of cost of such asset till such time as the asset is ready for its intended use. Other borrowing costs are recognised as expense for the period. N. Earnings per share i) The basic earnings per share (EPS) is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. O. Employee benefits Defined contribution plans: Provident Fund: Contribution to Provident Fund is made at the brscribed rates to the Employees Provident Fund Scheme by the Central Government and is charged to the Statement of Profit and Loss Defined benefit plans: i) Gratuity: The Company makes contribution to a scheme administered by the Life Insurance Corporation of India ('LIC') to discharge major part of its gratuity liabilities to the employees. Annual contribution to the fund as determined by the LIC is expensed in the year of contribution. The shortfall between the accumulated funds available with LIC and liability as determined on the basis of an actuarial valuation using projected unit credit method is provided for at the year end. The Actuarial gains/losses are immediately taken to Statement of Profit and Loss. ii) Leave encashment: The company records its unavailed leave liability based on actuarial valuation using projected unit credit method. Short term employee benefits Short term employee benefits are recognised as an expense as per the company's scheme based on expected obligation on undiscounted basis. State Plans: Employer's contribution to Employee's State Insurance is charged to Statement of Profit and Loss. P. Revenue recognition Revenue from services is recognised as per the terms of the contracts with customers when the related services are performed or the agreed milestones are achieved. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend on investment is recognised as and when the right to receive the same is established. Q. Provisions, Contingent liabilities and Contingent assets Provision, involving substantial degree of estimation in measurement, are recognised 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, which are possible or brsent obligations that may but probably will not require outflow of resources, are not recognised but are disclosed in the explanatory information to the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements. R. Cash and cash equivalents Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less 1. Corporate Information: Alphageo (India) Limited (the Company or AGIL) is a public limited company incorporated under the provisions of erstwhile Companies Act, 1956 having its registered office at Hyderabad in the state of Telangana, India. The Equity Shares of the Company are listed with Stock Exchanges in India viz., BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai. The Company is a leading service provider of 2 Dimensional and 3 Dimensional Seismic Data Acquisition, Processing and Interbrtation Services for Oil Exploration and Production Entities. The Company possesses an experience of working in difficult terrains while respecting local socio-economic realities and environment. 2. Previous year figures have been regrouped/ recast/ rearranged wherever necessary to conform to current year classification. 3. Change in accounting estimate: As per the requirements of the Companies Act, 2013 ("the Act"), the Company has computed debrciation on the basis of the useful lives of tangible fixed assets in the manner brscribed in Schedule II of the Act. Consequently, debrciation for the year is lower by H11,39,583/- and debrciation of H56,96,307/- on account of assets whose useful life is already exhausted as on 1st April, 2014 has been charged off to Statement of Profit and Loss. 5. In the opinion of the Board, all assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated and provision for all known liabilities have been made. 6. Dues of the Micro and Small Enterprises: Information pertaining to Micro and Small Enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (Act) as given below and the information mentioned at Note No.7 Trade Payables w.r.t. dues of micro and small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors For and on behalf of the Board A. Dinesh Managing Director Z.P. Marshall Chairman For P.V.R.K. NAGESWARA RAO & CO., Chartered Accountants Firm's Registration Number: 002283S Venkatesa Perumallu Pasumarthy Chief Financial Officer Meenakshi Naag Company Secretary Per our Report of even date For P.V.R.K. Nageswara Rao & Co., Chartered Accountants Firm's Registration Number: 002283S N. Anka Rao Partner Membership Number: 23939 Place : Hyderabad Date : 25.05.2015 |