Mar 31, 2015
1. Basis of Preparation of Financial Statements:
The Financial statements have been prepared under the historical cost
convention on accrual basis. The mandatory applicable accounting
standards in India and the provisions of the companies Act, 2013 have
been followed in preparation of these financial statements.
All assets and liabilities have been classified as current or
non-current as per the operating cycle criteria set out in the Revised
Schedule III to the Companies Act, 2013.
2. Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the 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.
3. Revenue Recognition:
Revenue from sale of goods is recognized when significant risks and
rewards in respect of ownership of products are transferred to
customers. Revenue from domestic sales of products is recognized on
dispatch of products. Revenue from export sales is recognized on
shipment of products. Revenue from products is stated inclusive of
duties, taxes but exclusive of returns, and applicable trade discounts
and allowances.
Interest income is recognized on time accrual basis, determined by the
amount outstanding and the rate applicable.
4. Fixed Assets:
Fixed assets are recognized at cost of acquisition and installation
less accumulated depreciation. The cost comprises purchase price,
fright, duties, levies, borrowing cost and directly attributable cost
of bringing the assets to their working condition for intended use.
Subsequent expenditure related to an item of fixed assets is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance
or extend its estimated useful life.
5. Depreciation:
Depreciation on fixed assets is provided on Written down value method
by using the lives of assets given in Schedule II of the Companies Act,
2013.
6. Valuation of Inventories:
Inventories are valued at the lower of cost and net realizable value
except by products which is valued at estimated realizable value. In
determining the cost of raw material, stores, spares, and other
material the first in first out (FIFO) method is used. Finished goods
and work in progress include material cost, labor and factory overheads
and excise duty, if applicable.
7. Impairment of assets:
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An Impairment loss is charged to the statement
of profit & loss 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 change in the estimate of recoverable amount
8. Tax Expense:
Provision is made for tax on Income and as per the applicable
provisions of Income Tax Act, 1961.
9. Foreign Exchange Transactions:
There are no foreign currency transactions during the period
10. Borrowing costs
Borrowing costs 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 substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
Mar 31, 2014
1.1 Accounting conventions
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis, as a going concern, in accordance with Generally
Accepted Accounting Principles in India, provisions of the Companies
Act, 1956 & Accounting Standards notified by the Central Government
under the Companies (Accounting Standards) Rules, 2006.
1.2 Use of estimates
The presentations of financial statements are in conformity with the
Generally Accepted Accounting Principles which require estimates and
assumptions to be made that affect the reportable amount of assets and
liabilities on the date of financial statements and the reportable
amount of revenue and expenses during the reporting period. Differences
between the actual results and estimates are recognised in the year in
which the results are known / materialized.
1.3 Revenue recognition
Revenue is recognized based on the actual turnover taken place and
other income earned by the company if any:
1.4 Fixed assets
Fixed assets are stated at cost of acquisition/purchase price inclusive
of duties, taxes, incidental expenses, erection/commissioning expenses
etc. up to the date the asset is ready for its intended use.
1.5.2 Depreciation on fixed assets added/disposed off during the year
is provided on pro-rata basis with reference to the date of addition
disposal
1.5.3 Depreciation on assets costing up to 5,000/- is provided in full
in the year of acquisition. But no such cases during this year.
1.6.0 Inventories
Inventories are valued at lower of cost and net realizable value except
by products which is valued at estimated realizable value. In
determining the cost of raw Material, stores, spares, and other
material the first in first out (FIFO) method is used. Finished goods
and work in progress include material cost, labour and factory
overheads and excise duty, if applicable.
1.7.0 Impairment of assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of profit & loss in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
1.8.0 Foreign currency transactions: The Company has not any foreign
business and transactions.
1.9.0 Borrowing costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of assets. Qualifying Asset is one that necessarily takes substantial
period of time to get ready for intended use. All other borrowing costs
are charged to revenue.
1.10.0 Taxes on income:
1.10.1 Current year charge
Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provisions of Income-tax Act,
1961. However, where the tax is computed in accordance with the
provision of Section 115JB of the Income-tax Act, 1961, as Minimum
Alternate Tax (MAT), it is charged off to the Profit & Loss Account of
the relevant year.
1.10.2 Deferred tax: Due to technical problem the company has not
provided any deferred tax :
1.11.0 Provisions, contingent liabilities and contingent assets
1.11.1 Provisions involving substantial degree of estimation in
measurement are recognized when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Liabilities which are material, and whose future outcome
cannot be ascertained with reasonable certainty, are treated as
contingent, and disclosed by way of notes to the accounts. Contingent
Assets are neither recognized nor disclosed in the financial statement.
1.12.0 Cash flows are reported using the indirect method, whereby a
profit before 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, financing and
investing activities of the Company are segregated
1.13.0 AUDITOR''S REMUNERATION: The company has made provision for Audit
Fees of Rs. 12,500/- 1.14.0 CONTINGENT LIABILITIES AND COMMITMENTS (TO
THE EXTENT NOT PROVIDED FOR): Nil 1.15.0 EARNINGS PER SHARE: Rs. -1.101
1.16.0 In the absence of virtual certainty that the sufficient further
taxable income will be available against which deferred tax asset can
be realized, the same has not been recognised in the books of accounts
in line with Accounting Standard dealing with Accounting for Income
Taxes''.
1.17.0 EMPLOYEES BENEFITS:
a. There are only 2 employees who are newly recruited. 1.18.0
INVESTMENT: Nil 1.19.0 RETIREMENT BENEFITS: Nil
Disclosure as required under Accounting Standard
1.20.0 RELATED PARTY DISCLOSURES:
The company has borrowed short term borrowings from the related parties
whose details are given in the above paras. Other than that there are
no any contracts or agreements with any related parties.
Related Party Disclosures for the year ended 31st March 2014 in
accordance with Accounting Standard - 18 Issued by the institute of
Chartered Accountant of India the company has not earned any revenues
from the related parties;
1.20.1 Summary of transactions with related parties: During the year
under review the company has taken an amount of Rs. 1,26,928/- from P.
Arun Kumar, Rs. 4,77,127/- from P. Mastan Rao and Rs. 1,17,146/- from
P. Srikanth (directors and relatives of the directors of the company)
and the balances as on 31-3-2014 are Rs. 7,00,000/- from K. Ratnakara
Rao, Rs. 5,61,558/- from P. Arun Kumar, Rs. 22,56.000/- from P. Mastan
Rao and Rs. 4,44,697/- from P. Srikanth (directors and relatives of the
directors of the company).
1.20.2 Managerial Remuneration: The Company is not paying any
managerial remuneration since the company''s performance is very poor.
1.21.0 As per Accounting Standards referred to in section 211(3C), the
company has to carry out the assessment of impairment of assets.
However, the company has not carried out the physical verification of
fixed assets as well as its impairment there of.
1.22.0 There is no additional provision for doubtful debts made for the
year end 31.03.2014. The provision carried over from last year are
related to debtors due for more than 365 days old.
1.23.0 No Amount has been written off from the sundry debtors which are
considered no longer recoverable.
1.24.0 As regards the disclosure of particulars of amounts owed by the
Company to small scale industrial undertakings that are required to be
disclosed in the Balance sheet in pursuance of amendment to Schedule VI
of the Companies Act, 1956 vide Notification No.GSR 129(E), dated
22-02-1999 issued by the Department of Company Affairs, the Company
does not owed any amount to small scale industrial undertakings.
Mar 31, 2013
1.1 Accounting conventions
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis, as a going concern, in accordance with Generally
Accepted Accounting Principles in India, provisions of the Companies
Act, 1956 & Accounting Standards notified by the Central Government
under the Companies (Accounting Standards) Rules, 2006.
1.2 Use of estimates
The presentations of financial statements are in conformity with the
Generally Accepted Accounting Principles which require estimates and
assumptions to be made that affect the reportable amount of assets and
liabilities on the date of financial statements and the reportable
amount of revenue and expenses during the reporting period. Differences
between the actual results and estimates are recognised in the year in
which the results are known / materialized.
1.3 Revenue recognition
Revenue is recognized based on the actual turnover taken place and
other income earned by the company if any:
1.4 Fixed assets
Fixed assets are stated at cost of acquisition/purchase price inclusive
of duties, taxes, incidental expenses, erection/commissioning expenses
etc. up to the date the asset is ready for its intended use.
1.5.0 Depreciation
1.5.1 Depreciation on fixed assets is provided on Written Down value
Method at the following rates specified in Schedule xiii of the
Companies Act, 1956
Category Rate
Buildings 10%
Plant and Machiner y 13.91%
Furniture & Fixtures 18.10%
Electricity 13.91%
Office Equipment 18.10%
Computers 40.00%
1.5.2 Depreciation on fixed assets added/disposed off during the year
is provided on pro-rata basis with reference to the date of addition
disposal
1.5.3 Depreciation on assets costing up to 5,000/- is provided in full
in the year of acquisition. But no such cases during this year.
1.6.0 Impairment of assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of profit & loss in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
1.7.0 Foreign currency transactions: The Company has not any foreign
business and transactions.
1.8.0 Borrowing costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of assets. Qualifying Asset is one that necessarily takes substantial
period of time to get ready for intended use. All other borrowing costs
are charged to revenue.
1.9.0 Taxes on income:
1.9.1 Current year charge
Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provisions of Income-tax Act,
1961. However, where the tax is computed in accordance with the
provision of Section 115JB of the Income-tax Act, 1961, as Minimum
Alternate Tax (MAT), it is charged off to the Profit & Loss Account of
the relevant year.
1.9.2 Deferred tax: Due to technical problem the company has not
provided any deferred tax :
1.10.0 Provisions, contingent liabilities and contingent assets
1.10.1 Provisions involving substantial degree of estimation in
measurement are recognized when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Liabilities which are material, and whose future outcome
cannot be ascertained with reasonable certainty, are treated as
contingent, and disclosed by way of notes to the accounts. Contingent
Assets are neither recognized nor disclosed in the financial statement.
1.11.0 Cash flows are reported using the indirect method, whereby a
profit before 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, financing and
investing activities of the Company are segregated
1.12.0 Auditor''s remuneration: The company has made provision for Audit
Fees of Rs. 22,500/- 1.13.0 Contingent liabilities and commitments (to
the extent not provided for): Nil 1.14.0 Earnings per share: Rs. -0.845
1.15.0 In the absence of virtual certainty that the sufficient further
taxable income will be available against which deferred tax asset can
be realized, the same has not been recognised in the books of accounts
in line with Accounting Standard dealing with Accounting for Income
Taxes''.
1.16.0 Employees benefits:
a. There are only 4 employees who are new recruited.
1.17.0 Investment: Nil
1.18.0 Retirement benefits: Nil
industrial undertakings that are required to be disclosed in the
Balance sheet in pursuance of amendment to Schedule VI of the Companies
Act, 1956 vide Notification No.GSR 129(E), dated 22-02-1999 issued by
the Department of Company Affairs, the Company does not owed any amount
to small scale industrial undertakings.
Disclosure as required under Accounting Standard
1.19.0 Related party disclosures:
The company has borrowed short term borrowings from the related parties
whose details are given in the above paras. Other than that there are
no any contracts or agreements with any related parties.
Related Party Disclosures for the year ended 31st March 2013 in
accordance with Accounting Standard - 18 Issued by the institute of
Chartered Accountant of India the company has not earned any revenues
from the related parties;
1.19.1 Summary of transactions with related parties: The company has
taken an amount of Rs. 7,00,000/- from Mr. K. Ratnakar Rao, Rs.
3,00,000/- from P. Arun Kumar, Rs. 14,29,000/- from P. Mastan Rao and
Rs. 4,03,824/- from Smt. P.V. Subbamma directors and relatives of the
directors of the company during 2012-13 and the balances as on
31-3-2013 are Rs. 7,00,000/-, Rs. 4,34,630/-, Rs. 17,78,873/- and Rs.
7,90,824/- respectively.
1.19.2 Managerial Remuneration: The Company is not paying any
managerial remuneration since the company''s performance is very poor.
1.20.0 As per Accounting Standards referred to in section 211(3C), the
company has to carry out the assessment of impairment of assets.
However, the company has not carried out the physical verification of
fixed assets as well as its impairment there of.
1.21.0 There is no additional provision for doubtful debts made for the
year end 31.03.2013. The provision carried over from last year are
related to debtors due for more than 365 days old.
1.22.0 A total sum of Rs.15,771/- has been written off from the sundry
debtors which are considered no longer recoverable.
1.23.0 As regards the disclosure of particulars of amounts owed by the
Company to small scale industrial undertakings that are required to be
disclosed in the Balance sheet in pursuance of amendment to Schedule VI
of the Companies Act, 1956 vide Notification No.GSR 129(E), dated
22-02-1999 issued by the Department of Company Affairs, the Company
does not owed any amount to small scale industrial undertakings
Mar 31, 2012
1. Basis of Preparation
The Financial statements have been prepared to comply with the
Accounting Standards notified by Companies (Accounting Standards)
Rules, 2006(as amended) and the relevant provisions of the companies
Act, 1956. The financial statements have been prepared under the
historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
During the year ended 30th June 2012, the revised schedule VI notified
under the Companies act 1956 has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements applicable for the current year.
2. Revenue Recognition
Income from sale of goods is recognized at the point of dispatch to
customer except in the case of consignment agents where the revenue is
recognized only after sale is effected by the consignment agent.
3. Fixed Assets
Fixed Assets are stated at cost of acquisition or construction. Cost
comprises of the purchase price and other attributable expenses
including cost of borrowing till the date of capitalization of the
asset acquired/installed/commissioned.
All the expenditure incurred for establishing /setting up of new
projects/substantial expansion of existing facilities /creation of new
assets is capitalized. Such expenditure to be capitalized includes
borrowing/finance costs, direct and indirect expenditure incurred on
such assets up to the time they are completed. During the year company
has disposed off land and building to clear IDBI and Canara Bank loans.
4. Depreciation
Depreciation on fixed assets has been provided on the written down
method and at the rates and in the manner specified in Schedule XIV to
the Companies Act, 1956.
5. Investments
The company has not made any investments during the year and there are
no any investments as on the Balance Sheet date.
6. Borrowing Costs
The company has not borrowed any funds from bank or financial
institutions. The company has not paid any interest on the borrowings
from the friends and relatives. But the company has made provision for
interest on Sales Tax arrears as per the notice given by the Commercial
Taxes Department.
7. Inventories
Items of Inventories are measured at lower of cost or realizable value
after providing for obsolescence, if any. Cost comprises of cost of
purchase, cost of conversion, and other costs incurred in bringing the
inventories to the present location and condition.
8. Taxes on Income
a. Current Tax
The company has not made any provision for current tax provisions of
the Income tax Act, 1961. since the company has incurred loss during
the year and there are accumulated losses.
b. Deferred Tax
Deferred tax is recognized on timing difference between taxable income
and accounting income that originate in one period and are capable of
being reversed in the subsequent period/s, subject to the consideration
of prudence.
9. Foreign Currency Transactions -Nil- 10. Provisions, Contingent
Liabilities and Contingent Assets: The company has made provision for
Sales
Tax arrears of Rs. 7,09,618/- and Interest on Sales Tax arrears of Rs.
40,32,280/-.