1 Significant Accounting Policies 1.1 Basis for brparation of financial statements These financial statements 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 financial statements have been brpared under the historical cost convention on accrual basis. 1.2 Fixed Assets Tangible Assets Fixed assets are stated at cost of acquisition or construction less accumulated debrciation and impairment loss, if any. Cost includes freight, duties and taxes applicable and other expenses related to acquisition and installation. 1.3 Debrciation Debrciation is provided on the straight line method and at the useful life and in the manner specified in Schedule II of the Companies Act, 2013. For Assets acquired or disposed of during the year, on prorata basis with reference to the month of acquisition or disposal. 1.4 Impairment Losses Impairment losses are provided to the extent the carrying amount exceeds their recoverable amounts. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is brsent value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of an asset at arm's length transaction between knowledgeable and willing parties less cost of disposal. 1.5 Borrowing Costs Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for this intended use. All other borrowing costs are charged to revenue. 1.6 Investments Investments of long term nature are stated at cost, less adjustment for any diminution, other than temporary, in the value thereof, Current Investments are stated at a lower of cost and fair market value 1.7 Inventories Raw materials, stores, spares, and packing material are valued at Weighted average cost. Finished goods and Work-in-Progress are valued at cost or net realizable value whichever is lower. 1.8 Revenue Recognition Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of the products are transferred to the customer. Revenue from product sales is stated inclusive of excise duty applicable trade discounts and allowances. Revenue from services is recognized as per the terms of the contract with the customers when the services are performed. 1.9 Translation of Foreign Currency items Transactions in foreign currency are accounted at the exchange rate brvailing on the date of transaction. Gain/Loss arising out of fluctuations in exchange rates are accounted for realization. Non-monetary assets being equity investment in subsidiaries denominated in foreign currency and measured at historical cost are translated at the exchange rate brvalent at the date of transaction. Current Assets and Current Liabilities are translated at the exchange rate brvailing on the Balance Sheet date and the resultant gain/loss is recognized in the financial statements. To account for profit/loss arising on cancellation or renewal of forward exchange contracts as income/ expense for the period. To account for profit/loss arising on settlement or cancellation of currency option as income/expense for the period. 1.10 Employee Benefits The Company accounts for Gratuity liability of its employees on the basis of actuarial valuation carried out by an independent actuary. Defined benefit plans for Gratuity is maintained by the Company with the Life Insurance Corporation of India. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. The Company accounts for Leave Encashment liability of its employees on the basis of actuarial valuation carried out by an independent actuary. 1.11 Taxes on Income Deferred tax liabilities and deferred tax assets are recognized for the tax effect on the difference between taxable income and accounting income which are not permanent in nature subject to the consideration of prudence in the case of deferred tax assets. 1.12 Earnings per share Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period.Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. 1.13 Provisions, Contingent Liabilities and Contingent Assets: Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent Liabilities, are disclosed when the Company has a possible obligation or a brsent obligation and it is probable that a cash outflow will not be required to settle the obligation. a) Segment assets and liabilities All segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, sundry debtors, loans and advances and operating cash and bank balances. Segment assets and liabilities do not include investments, inter corporate deposits, reserves and surplus, borrowings, provision for contingencies and income tax (both current and deferred). b) Segment revenue and expenses: Segment revenue and expenses are directly attributable to the segment. Segment revenue and expenses do not include interest income on inter-corporate deposits, profit on sale of investments, interest expense, provision for contingencies and income tax. 2. Previous Year's figures are regrouped/rearranged wherever considered necessary to conform the current year figures As per our report of even date For M.ANANDAM & CO., Chartered Accountants Sd/- (M.V. Ranganath) Partner By order of the Board Sd/- Challa Rajendra Prasad Executive Chairman M.No.028031 K.V.L.N. Sarma Chief Financial Sridevi Dasari Officer Company Secretary I.J. Rao Director Challa Srishant Managing Director Place : Hyderabad Date : 26th May, 2015 |