SIGNIFICANT ACCOUNTING POLICIES a) Preparation of financial statements The financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost conversion on accrual basis, except certain tangible assets which are being carried at revalued amounts. Pursuant to section 133 of the Companies Act 2013 read with Rule 7 of Companies (Accounts) Rules 2014, till the standards of accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act 1956, shall continue to apply. Consequently these financial statements have been brpared to comply in all material respects with the accounting standards notified under Section 211(3C) of the Companies Act,1956 (Companies Accounting Standards Rules, 2006 as amended) and the relevant provisions of the Companies Act, 2013 ('the Act'). The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year. b) Method of Accounting The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis. c) Fixed Assets Fixed Assets are stated at their original cost of acquisition, net of accumulated debrciation and CENVAT credit, and include taxes, freight and other incidental expenses related to their acquisition/ construction/ installation. Pre-operative expenses relatable to a specific project are capitalised till all the activities necessary to brpare the qualifying asset for its intended use are completed. Expenses capitalized also include applicable borrowing costs. Fixed Assets are impaired when there is no possibility of using them further. During the year the Company has provided Debrciation on Fixed Assets based on the Useful life in the manner brscribed in Schedule II Part C to the Companies Act, 2013. d) Investments Investments are classified into current and long-term investments. Current Investments are carried at lower of cost or fair market value. Any diminution in their value is recognized in the profit and loss account. Current & Non-Current investments, including investment in subsidiaries, are carried at cost. Diminution of temporary nature in the value of such long-term investments is not provided for except when such diminution is determined to be of a permanent nature. e) Inventories Inventories are valued at cost or net realizable value, whichever is less. Cost comprises of expenditure incurred in the normal course of business in brining such inventories to it's their location. Finished goods at the factory are valued at cost in all applicable cases. Obsolete, non-moving and defective inventories are identified at the time of physical verification of inventories and adequate provision, wherever necessary, is made for such inventories. f) Intangible Assets Intangible Assets are recognized in the Balance Sheet at cost, net of any accumulated amortization / impairment. Preliminary expenses are amortized over a period of time. De-merger expenses are amortized over a period of ten years. g) Research and Development Capital expenditure on Research and Development is included in the Schedule of Fixed Assets. Revenue expenditure relating to the Research phase is charged to the Profit and Loss account. Revenue Expenditure relating to the Development phase is amortized over the period in which the future economic benefits are expected to accrue to the Company, but not exceeding a period of five years, and the amortization commences from the year in which the company realizes these benefits for the first time. h) Revenue Recognition Income is recognized when the goods are dispatched in accordance with terms of sale. Sale is exclusive of excise duty. In respect of income from services, income is recognized as and when the rendering of services is complete. Revenue from time period services is recognized on the basis of time incurred in providing such services. i) Retirement Benefits Company makes monthly contribution to the Employees Provident Fund and Pension Fund under the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952. Company provides for accrued liability in respect of gratuity and leave encashment on actuarial valuation. Goldstone j) Borrowing Costs Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of cost of such asset. Other borrowing costs are treated as a period cost and are expensed in the year of occurrence. k) Debrciation i) Debrciation on Fixed Assets is provided on straight-line method. ii) Effective from 1st April 2014, the Company debrciates its fixed assets over the useful life as brscribed in Schedule II of the Act 2013, as against the earlier practice of debrciating at the rates brscribed in Schedule XIV of the Companies Act, 1956. l) Foreign Currency Transaction Foreign currency transactions, being in the nature of integral operations, are accounted for at the rates of exchange brvailing as on the date of transaction. Gains and losses resulting from settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account. Exchange differences relating to fixed assets are adjusted to the cost of the asset. m) Government Grants / Incentives Amounts receivable from Government by way of Grants / Incentives are accounted for on receipt basis and same is to adjust against the cost of the assets. Incentives by way of Sales tax deferment are recognized as loan to the extent of their utilization. n) Impairment of assets An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. o) Income and Deferred Tax The provision made for income tax in the accounts comprises both the current and deferred tax. Current tax is provided for on the taxable income for the year. The deferred tax assets and liabilities for the year arising on account of timing differences (net) are recognized in the Profit and Loss account and the cumulative effect thereof is reflected in the Balance Sheet. p) Contingent Liabilities and Contingent Assets Liabilities, which are contingent in nature, are not recognized in the books of account but are disclosed separately in the Notes. Contingent Assets are neither recognized nor disclosed in the books of account. q) Claims Claims made by the Company are recognized to the extent the Company deems them recoverable. Claims against the Company, including liquidated damages, are recognized only on acceptance basis. NOTES TO FINANCIAL STATEMENT 1: Long Term & Short Term Borrowings a) Term Loan from State Bank of Hyderabad is secured by i) Hypothecation of plant and machinery acquired out of the said loan. ii) Hypothecation against first charge on all unencumbered fixed assets of the company both brsent and future. iii) Equitable Mortgage of immovable property of M/s Goldstone Technologies Limited iv) Corporate Guarantees of M/s Trinity Infraventures Limited & M/s Goldstone Technologies Limited. v) Personal guarantee of a promoter director of the company. b) Working Capital Facilities from State Bank of Hyderabad are secured by: i) Hypothecation against first charge on Current Assets of the company both brsent and future. ii) Equitable Mortgage of immovable property of M/s Goldstone Technologies Limited. iii) Corporate Guarantee given by M/s Trinity Infraventures Limited & M/s Goldstone Technologies Limited for above loan. iv) Personal guarantee of a promoter director of the company. c) Vehicles loans availed are secured by hypothecation of vehicles acquired out of the said loans. 2. Other Long Term Liabilities: The Company has availed Sales Tax deferment of Rs. NIL/- during the year (Previous Year: Rs. NIL/-). During this financial year the company has repaid an amount of Rs. 1,07,82,935/-( Previous year : Rs. 89,72,704/-) 3. Confirmation of Balances with Sundry Debtors and Sundry Creditors Company has taken necessary steps to get the confirmation of balances from the parties. 4. During the year company has computed Debrciation on Fixed Assets based on the useful life in the manner brscribed in part C of Schedule II of new companies Act 2013. In accordance with the transitional provisions under note 7(b) to Part C of Schedule II of the act, Rs. 67,90,021/- (net of deferred tax of Rs. 32,61,079/-) has been adjusted against retained earnings pertaining to assets whose balance useful life was NIL as at 1ts April 2014. 5. Investments: Company has invested Rs. 6.01 Cr (Previous year Rs. 6.01 Cr) in TF Solar Power Private Limited towards Equity Share Capital and allotted 60,10,000 shares @ Rs.10/- each. 6. Segment Reporting (AS - 17) Since the Company Operate in one segment in manufacturing activities - Composite Polymer Insulators, segment reporting as required under Accounting Standard - 17 is not applicable. 7. Deferred Tax Assets & Liabilities ( AS - 22 ) In accordance with Accounting Standard 22 (AS22) issued by the ICAI, the Company has accounted for deferred income tax during the year. The deferred income tax provision for the current year amounting to the Rs. 48,89,684/- towards deferred Income Tax Asset. (Previous year Rs. 69,52,226/- towards Deferred Tax Asset). An amount of Rs. 32,61,079/-has been adjusted towards deferred tax asset (Net) which has been calculated in the manner brscribed in Part C of Schedule II of new companies Act 2013. 8. Impairment of Assets (AS - 28) Nil 9. During the year Company has made an additional provision of Rs. 49.97 lacs for Late Delivery charges. 10 . Prior Period Adjustments & Extra ordinary items: (AS - 5) Prior period adjustment of X (16,64,866) ( Previous year Rs. 44,09,937) shown in the Profit and Loss account is the net amount of the debits and credits pertaining to brvious years, which were not provided during those periods. 11. Contingent Liabilities not provided for a) Letter of credit - Rs. 892.18 lakhs (Previous year: Rs. 802.53 lakhs) b) Bank Guarantees - Rs.3,069.54 lakhs (Previous year: Rs. 2,087.48 lakhs) c) Commitments on capital contracts remaining to be executed Rs. 230.00 lakhs (Previous year: Rs. 170.00 lakhs) d) Un-claimed dividend amount for the years 2007-08, 2008-09, 2009-10, 2010-2011 and 2011-12 is lying in the Dividend Account at Axis Bank for an amount of Rs. 2,24,140, Rs. 2,19,954, Rs. 1,29,968, Rs. 1,31,219 and Rs. 1,08,923 respectively. 12. During the year company has not made any provision for Intangible Assets - Goodwill. 13. Figures have been rounded off to the nearest rupee. 14. Previous year's figures have been regrouped / rearranged wherever necessary. AS PER OUR REPORT OF EVEN DATE For P. Murali & Co., Firm Regn. No: 007257S Chartered Accountants P. Murali Mohana Rao Partner M.No. 023412 For and on behalf of the board Sd/- L P Sashikumar Managing Director Sd/- B Appa Rao Director Sd/- P Syam Prasad CFO Sd/- P. Hanuman Prasad Company Secretary Place : Secunderabad Date : 23rd May, 2015 |