1. SIGNIFICANT ACCOUNTING POLICIES A. ACCOUNTING CONVENTION The Company maintains its accounts in accrual basis following the historical cost convention in accordance with generally accepted accounting principals (GAAP), in compliance with the relevant provision of the Companies Act 2013 and the accounting standards as specified in the companies (Accounting Standards) Rules,2006 brscribed by the central government. The brparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balance of assets and liabilities and the disclosures relating the contingent liabilities as of the date of the financial statements. Examples of such expenses includes the useful lives of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known. B) FIXED ASSETS Tangible Assets Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated debrciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets. Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-Progress. LEASES a) Operating Leases: Rentals are expensed on a straight line basis with reference to the lease terms and other considerations. b) (i) Finance leases prior to 1st April, 2001: Rentals are expensed with reference to lease terms and other considerations. (ii) Finance leases on or after 1st April, 2001: The lower of the fair value of the assets and brsent value of the minimum lease rentals is capitalised as Fixed Assets with corresponding amount disclosed as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss Statement. c) However, rentals referred to in (a) or (b) (i) above and the interest component referred to in (b) (ii) above, pertaining to the period upto the date of commissioning of the asset are capitalised. C) DEbrCIATION Tangible Assets Debrciation on Fixed Assets is provided to the extent of debrciable amount on the Stright Line Method Debrciation is provided based on useful life of the assets as brscribed in Schedule II to the Companies Act, 2013 In respect of additions or extensions forming an integral part of existing assets and insurance spares, including incremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, debrciation is provided as aforesaid over the residual life of the respective assets. D) INVESTMENTS Long term investments including interest in incorporated jointly controlled entities, are carried at cost, after providing for any diminution in value, if such diminution is of permanent nature. Current investments are carried at lower of cost or market value. The determination of carrying amount of such investments is done on the basis of specific identification. Investments in integrated joint ventures are carried at cost net of adjustments for Company's share in profit or losses as recognized. E) INVENTORIES a) Inventories are valued at lower of cost and net releasable value. Cost is determined on first in first out (FIFO) basis. The cost of work- in - Progress and finished goods comprises of raw materials, direct labour, other direct costs and related production overheads, but excludes interest expense. Net realizable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses. F) REVENUE RECOGNITION Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery. a) Sales and Service i) Sales and service include excise duty and adjustments made towards liquidated damages and price variation are exclusive of all taxes wherever applicable. ii) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of contract. iii) Revenue from service related activities is recognized using the proportionate completion method. iv) Revenue from engineering and service fees is recognized as per the terms of contract. b) Other operational income rebrsents income earned from the activities incidental to the operations of the business segments and is recognized on rendering of related services as per the terms of the contract. c) Interest income is accrued at applicable interest rate and separate disclosures have been made towards TDS deducted on those interest income. d) Other items of income are accounted as and when the right to receive arises. G) FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions are accounted at the exchange rates brvailing at the date of the transaction Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the Profit and Loss Account. H) TAXES ON INCOME Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. 17 . Figures have been rounded off to the nearest rupee. 18 . Previous year figures have been regrouped/reclassified wherever necessary to make them comparable with current year figures. 19. Notes 1 to 27 has been signed by the Directors and Auditors and forms an integral part of the Balance Sheet and Profit and Loss Account. As per our report of even date attached FOR BHANDARI AND ASSOCIATES FOR AND ON BEHALF OF THE BOARD Chartered Accountants L.R. BHANDARI Proprietor ( NITIN KHARA) ( MANG. DIRECTOR) DIN-01670977 ( ELESH KHARA) ( DRECTOR) DIN-01765620 PLACE : Nagpur, Dated: 30th May 2015 |