NOTE 1 - NOTES FORMING PART OF ACCOUNTS A SIGNIFICANT ACCOUNTING POLICES 1 Basis of Accounting The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are brpared on historical cost convention and in accordance with generally accepted accounting principles and Accounting Standards issued by the Institute of Chartered Accountants of India. 2 Fixed Assets and Debrciation (a) Fixed assets are stated at cost net of accumulated debrciation. Expenditure during construction period including interest on borrowings for new major projects are capitalized till the commencement of commercial production. (b) Debrciation is provided at the rates specified under Schedule II of the Companies Act, 2013 as follows: In respect of Plant & Machinery and Buildings : Straight Line Method Other fixed Assets : Written down value method 3 Inventories (a) Raw Materials, and Consumable Stores are valued at cost on first in first out basis (FIFO). (b) Finished goods and Work-in-progress are valued at lower of cost and net realizable value on full absorption cost basis. 4 Foreign Currency Transactions Foreign currency transactions are recorded at the rates brvailing on the date of the transactions. Monetary assets and liabilities in foreign currency are translated at year end rate or at the rates of exchange fixed under contractual arrangements. Exchange differences arising on settlement of tranction and translation of monetary items are recognized as income or expense. 5 Contingent Liabilities No liability is provided in respect of contingent liabilities, but only mentioned by way of note to accounts. 6 Retirement Benefits Company's contribution to Provident fund determined under the relevant statute are charged to revenue. The gratuity contribution has been made on the basis of actuarial valuation under AS 15 given by Life Insurance Company. The liability for leave encashment is provided for on the basis of accrued leaves at the end of the year. 7 Accounting For Income Tax Current tax rebrsents the amount that otherwise would have been payable under the Income tax Act 1961, had the financial year been reckoned as the basis for computation of tax payable under the brvailing tax laws. 8 Deferred Income tax Deferred Tax being tax on timing difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years has been recognized. Deferred tax asset is recognized only if there is reasonable that it will be realized and will be reviewed for the appropriateness of its respective carrying value at each balance sheet date 9 Leases Assets acquired under finance leases on or after April 1, 2001 are recognized at the lower of the fair value of the leased assets at inception and the brsent value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability. 10 Sales Sales rebrsent the amount realised or realisable for goods sold including excise duty. B NOTES TO ACCOUNTS ANNEXED TO AND FORMING PART OF THE ACCOUNTS 1 The Company has decided to issue 10,00,000 equity shares to non promoters and 31,00,400 convertible warrants to promoters and non promoters on brferential basis in the EGM conducted on 30.03.2015 . Accordingly company has received an amount of Rs. 500 lakhs against equity shares and Rs. 25 lakhs against convertible warrants. 2 In the opinion of the Board, the current assets and loans & advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. 3 Previous year's figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year. As per our report of even date attached for BRAHAMAYYA & CO Chartered Accountants Firm's Registration No. : 000513S K.S. RAO Partner Membership No. 015850 For and on behalf of the Board M. LOKESWARA RAO Managing Director V. SUDHAKARA REDDY Chief Financial Officer B. KISHORE BABU Executive Director D. RAGAVENDRA RAO Company Secretary Place : Hyderabad Date: 30th May, 2015 |