Significant Accounting Policies i. Company Information Surana Telecom and Power Limited (the Company) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) Company is into Manufacturing of Aluminum Rods, Generation of wind & Solar Power and trading of Solar Modules and other related products. ii. Basis of Preparation of Financial Statements The financial statements of Surana Telecom and Power Limited ('the company') have been brpared under the historical cost convention on the accrual basis with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013 (" the Act) including the accounting standard notified under the Act. ii. Use of Estimates The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. iii. Own Fixed Assets Fixed Assets are stated at cost net of modvat / cenvat / value added tax, less accumulated debrciation and impairment loss, if any. Any costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized. iv. Leased Assets Premium Paid on Leased Assets is amortized over the lease period and the annual lease rentals are charged to Profit and Loss Account in the year it accrues. v. Debrciation Debrciation is provided on Straight Line Method, except for Plant & Machinery of Gujarat Unit for which written down Value method is followed, in the manner brscribed in Schedule II of the Companies Act 2013. However, till brvious year, debrciation was provided at the rate and in the manner brscribed in Schedule XIV of the Companies Act 1956. Capitalized Software Cost is amortised over a period of 3 years. vi. Impairment of Assets An asset is treated as impaired when the carrying cost of assets 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. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. vii. Investments Current Investments are carried at the lower of cost and quoted / fair value, computed category wise. Long Term Investments are stated at cost less any permanent diminution in value, determined separately for each individual investment Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management. viii. Inventories Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net releasable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads. ix. Foreign Currency Transactions • Gains and Loses on account of exchange differences existing out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in brvious financial statements , in so far as they relate to the acquisition of a debrciable capital asset can be added or deducted from the cost of asset and shall be debrciated over the balance life of asset and in other cases ,it can be accumulated in a "foreign currency monetary item transaction Difference Account" in the enterprises financial statements and amortized over the balance period of such long asset/liability. • In respect of Purchases / Sales in normal course of business, the Gain / Loss is charged to Profit and Loss Account. x. Employee Retirement / Terminal Benefits The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The brmium paid thereon is charged to Profit and Loss Account. Leave Encashment liability is provided on the basis of actuarial valuation on actual entitlement of eligible employees at the end of the year. xi. Provision, Continent Liabilities and Contingent Assets : Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements. xii. Turnover Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net). Inter-Unit sales are excluded in the Main Profit and Loss account. xiii. Revenue Recognition Dividend income is recognized when the unconditional right to receive the income is established. Income from sale of VER is accounted as and when sold to customers. xiv. Government Grants Grants received against capital items carrying cost of asset is adjusted against the cost of the asset on actual receipt of the money from the government. Assets received as grant free of cost are recorded at nominal value of X 1 transfer of possession. Compensation/Reimbursement of specific revenue items are adjusted in the year of receipt against the respective revenue items on receipt basis. xv. Segment Reporting Company's operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments rebrsenting one or more strategic business units that offer products or services of different nature and to different Markets. Inter-Segment transfers are done at cost. Company's Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Ministry of Corporate Affairs. xvi. Provision for Taxation Income taxes/ Taxation is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting 6 taxable profits, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization. xvii. Prior Period Expenses / Income Prior period items, if material are separately disclosed in Profit & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the financial affairs of the company are disclosed. xviii. Sundry Debtors, Loans and Advances Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable. xix. Borrowing Costs Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets in accordance with Accounting Standard-16 (AS-16) brscribed under Rule 7 of Accounting Standard Rules, 2014. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Borrowing cost are ceased to be capitalized when the asset is ready for its intended use or there is cessation of development for the extended period and charged to Profit & Loss Account. xx. Earnings per Share The Company reports basic and diluted earnings per share in accordance with Accounting Standard-20 (AS-20) brscribed under Rule 7 of Accounting Standard Rules, 2014. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive. As per Accounting Standard (AS)17 on " Segment Reporting" segment information has been provided under the notes to Consolidated Financial Statements. As per our report of even date attached For Surana Telecom and Power Limited For Sekhar & Co Chartered Accountants Firm's Registration Number : 003695-S G.Ganesh Narender Surana Devendra Surana D. Srinivas Partner Chairman Director Company Secretary Membership No: 211704 Place : Secunderabad Date : May 30 , 2015 |