Notes to financial statements for the year ended March 31, 2015

Note No. I

Significant Accounting policies:

1. Basis of Accounting:

a) The financial statements have been brpared under the Hi storical convention and in accordance with applicable

Accounting Standards issued by the Institute of Chartered

Accountants of India and relevent brsentational requirements of the Companies Act., 1956.

b) Accounting policies not specifically referred to otherwise are in accordance with prudent accounting principles.

c) All Income and Expenditure items having material bearing on the financial statements are recognised on accrual basis.

2. Fixed Assets:

Fixed Assets are stated at cost including related incidental expenditure.

3. Capital Work in Progress

Advance paid towards acquisitioin of Fixed Assets and the cost of Assets not put to use before the year end are disclosed under this head.

4 Debrciation

Debrciation on fixed assets has been provided on Straight Line method and Debrciation is provided on pro-rata basis as per Schedule VI of Companies Act, 1956.

Effective 1st April2014,the Company debrciates its fixed assets over the useful life in the manner brscribed in Schedule I I of the Act, as against the earlier practice of debrciation at the rates brscribed in Schedule XIV of the Companies Act,1956.

Debrciation on additions to assets or on sale/discardment of assets, is calculated prorata from the month of such addition or upto the month of such sale/discardment as the case m ay be.

5 Revenue Recognition

Revenue from technical services is recognised on a prorata basis over the period in which services are rendered.

6 Inventory

Inventories are valued at cost or net realisable value whichever is lower.

7 Misc. Expenditure

Preliminary expenses are amortised over a period of 5(Five) years

8 Provision for Taxation

Provision is made for Income Tax annually based on the tax liability computed after considering tax allowances and exemptions.

9 Foreign Exchange Policy

Fixed Assets and Long Term Liabilities are accounted at the rates brvailing on the dates of transactions Current Assets and Current Liabilities are accounted at Rates brvailing on the date of the Balance Sheet.

All the Income items other than those pertaining to the Foreign Branches are accounted on the basis of Exchange rate brvailing on the dates of transactions.

All the expenditure items during a month other than those pertaining to the Foreign Branch are reported at a rate that approximates the actual rate during that month.

Sale proceeds are converted into Indian Rupees at the Rates brvailing on the date of receipt.

Net Foreign Exchange difference on Foreign Currency Transactions is recognised in the Profit and Loss account during the year.

10 Retirement Benefits

Contributions to Provident and Superannuation Funds are recognised as expense when incurred.

Liability for gratuity and encashble leave are actuarially determined at the Balance Sheet date.

11 Deferred Tax Liability/Asset

To provide and recognise deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

12 Impairment of assets

The carrying amount of assets are reviewed at each Balance Sheet date to assess whether they are recorded in excess of their recoverable amounts. Where carrying values exceed the estimated recoverable amount, impairment loss is recognised and assets are written down to their recoverable amount.

2 The composition of deferred tax liability of Rs. 414.42 lakhs (brvious year Rs.307.09 lakhs) is on account of timing differences relating to debrciation.

3There are no small scale industrial undertakings to whom the company owes a sum exceeding Rs.1.00 lakh which is outstanding for more than 30 days of the Balance sheet date.

4 Confirmation of balances from parties as at the end of the the year has not been received and adjustments, if any, shall be made as on ongoing process.

5 No provision has been made for employee retirement benefit pending acturial valuation. All figures have been rounded off to the nearest rupee.

for MAHESH,VIRENDER & SRIRAM

Chartered Accountants

Firm Registration No.001939S

R.V.CHALAM

PARTNER

Mem.No.21423

for and on behalf of the Board of Directors  Vedavaag Systems Limited

J.S.R.DURGA PRASAD CHAIRMAN

J. MURALI KRISHNA MANAGING DIRECTOR

Place: Hyderabad

 Date: 29-05-2015