CORPORATE INFORMATION Mahaveer Infoway Ltd was incorporated on May 13, 1991 as a private limited company with the name Mahaveer Leafin and Holdings Pvt Ltd. The company was promoted by Ashok Kumar Jain, a Seasoned Business Professional with magnitude of experience in Banking, Finance and Business Management Operations. In February 13, 1996, the company was converted into public limited company by listing the Bombay Stock Exchange and the name was changed to Mahaveer Leafin and Holdings Ltd. In January 7, 2000, the company changed their name from Mahaveer Leafin and Holdings Ltd to Mahaveer Infoway Ltd and carrying the activities of mobile handset manufacturing and trading under the brand name and style 'ZINK' across the various parts of the country. In addition to this the company also does staffing and software development services. 1. Significant Accounting Policies: 1.1 Basis of Accounting and Preparation of Financial Statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"). The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. 1.2 Use of Estimates The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 1.3. Fixed Assets and Debrciation Fixed assets are stated at actual cost less accumulated debrciation. The actual cost capitalized comprises material cost, freight, installation cost, duties and taxes, eligible borrowing costs and other incidental expenses incurred during the construction/installation stage Expenditure incurred during construction period directly attributable to the fixed assets is transferred to capital work in progress. The estimated Useful life of assets is based on past experience of the company, which is different from the useful life as brscribed in Schedule-II to the companies Act, 2013. 1.4 Revenue Recognition Revenue is primarily derived from sale of trading goods and software development and related Services. Income is recognized on accrual basis unless otherwise stated in these accounts. a) Revenue from Sale of Trading goods: Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects sales tax and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence they are excluded from revenue. b) Revenue from software development services: i. Revenue for services is recognized after completion of each stage of service. ii. Revenue from software development (on time or material basis) is recognized based on software developed and billed to the clients. The company collects service tax on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence they are excluded from revenue. 1.5 Foreign currency transactions Foreign-currency denominated monetary assets and liabilities are translated at exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such translations are included in the Statement of profit and loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate brvalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate brvalent at the date of transaction. 1.6 Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. All investments are stated at cost, i.e., cost of acquisition inclusive of expenditure incidental to acquisition. Income from investments is recognised in the accounts in the year in which it is accrued and stated at gross values. Short Term Investments are valued at cost or market value whichever is lower. In case of Long Term Investments, provision for diminution in value is made when it is permanent and material. 1.7 Inventories: Items of inventories are measured at lower of cost and net realisable value. Net realizable value is the estimated selling price in the ordinary course of business less estimated cost necessary to make the sale. 1.8 Employee Benefits a) Short Term Employee Benefits A short term employee benefit includes salaries and incentives. b) Defined Contribution Plan The Company's contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees. 1.9. Borrowing Costs Borrowing Costs include interest and amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing Costs allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. 1.10. Earnings per Share Basic earnings per share are calculated by dividing the net profit/ (loss) after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating basic and diluted earnings per share, the net profit/ (loss) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year will be adjusted for the effects of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. 1.11. Taxes on Income Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). a) Provision for current taxation has been made in accordance with the income tax laws brvailing for the relevant assessment years. b) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been substantially enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in the future; however where there is unabsorbed debrciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. c) The Company offsets current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis. 1.12. Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information 1.13. Provisions and contingent liabilities A provision is recognized when an enterprise has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates 1.15. Contingent Liabilities and Commitments Estimated amount of contracts remaining to be executed on capital accounts and not provided for, net of advances is Rs. Nil 1.16. Investments a. Investment includes 5000 shares of Arihant Optics Limited amounting to Rs.5,00,000/-. b. Investment includes Rs.98,000/- towards subscription of shares in Minfy Technologies Private Limited c. Investment includes Rs.3,00,000/- towards subscription of shares in Mahaveer Telecom Private Limited. d. Investments in Skyscrapers unquoted equity shares of worth Rs. 26, 19,000/- e. Investment in TechMinfy Info Solutions LLP amounts to Rs.50,000/-. 1.17. Fixed Assets Capital Work-in-progress: current status for 2015 Company has incurred an expenditure on construction of building of Rs.1, 42, 10,170/- which is certified by the management of the company is shown as capital work-in-progress along with the opening Capital work-in-progress. 1.18. Segment Reporting Consequent to the internal reorganization there were changes effected in the reportable industry segments based on the "management approach" as laid down in AS17. Industry segments for the company are 1. Bitumen Trading 2. Staffing/HR Related Services 3. IT Software Development 4. Mobile-Handsets trading. Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment. Allocated expenses of segments include expenses incurred for rendering services from the company's off shore software development centres which are categorized in relation to the associated turnover of the segment 1.19. Related Party transactions The company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is required to be made. No amounts have been written off or written back during the year in respect of debts due from or related parties. There are no other related parties where control exists that need to be disclosed. 1.20. Taxation Current tax is the amount of tax payable on taxable income for the period determined in accordance with the provisions of Income Tax Act, 1961. Deferred tax - Deferred tax resulting from "timing differences" between book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised only to the extent that there is a virtual certainty that such assets will be realised in future. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. 1.26 The management is of the opinion that the carrying amounts of fixed assets and other assets are not less than their respective net realizable values. 1.27 Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/disclosure For and on behalf of For and on behalf of the Board of Directors M/s. KALYANA & CO Chartered Accountants Firm Registration Number: 007095S Managing Director Director CA A Srilakshmi Chief Financial Officer Company Secretary Partner M.No:107945 Place: Hyderabad Date: 29.05.2015 |