SIGNIFICANT ACCOUNTING POLICIES 1) BASIS OF brPARATION OF FINANCIAL STATEMENTS The Financial Statements are brpared under the historical cost convention (except for certain fixed assets which have been revalued) in accordance with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 2) USE OF ESTIMATES The brparation of Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively when revised. 3) REVENUE RECOGNITION a) Revenue from Sale of Goods: Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer. b) Service Income: Income from annual maintenance services is recognized proportionately over the period of contract. c) Revenue from Works Contracts: Revenue from works contracts is recognized on: "Percentage of Completion Method"; Percentage or stage of completion is determined by the proportion that contract cost incurred for work performed up to the reporting date bears to the estimated total costs of the contract. 4) FIXED ASSETS Fixed Assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation except some land & buildings (excluding residential flats) and plants and machinery, which are adjusted on revaluation. The fixed assets manufactured by the Company are stated at manufacturing cost or net realizable value whichever is lower, brvailing at the time of capitalization. Fixed assets are shown net of accumulated debrciation and amortization, wherever applicable b) Debrciation on additions to assets or on sale /disposal of assets is calculated pro-rata from the date of such additions or up to date of such sale/ disposal as the case may be. c) Debrciation on revalued assets is calculated on the replacement value at the rates considered applicable by the valuer and is charged to Profit and Loss Account. In respect of revalued building of SPM division, the difference between debrciation on replacement value and on written down value basis is drawn from revaluation reserve created on revaluation to the extent the balance in such reserve is available. 3) IMPAIRMENT OF ASSETS The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. a) An impairment loss is recognized where the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at weighted average cost of capital. b) After impairment, debrciation is provided in subsequent periods on the revised carrying amount of the asset over its remaining useful life. c) A brviously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value in use after reversal is not increased beyond the carrying value that would have brvailed by charging usual debrciation if there was no impairment. 4) INTANGIBLE ASSETS Cost of technical know-how incurred on technical drawings/designs/data for the manufacture of new products is capitalized on receipt of such drawings/designs/data. The technical know-how is amortized from the year in which commercial production commences over its useful life determined by technical evaluation. 5) INVESTMENTS Long term investments are stated at cost including all expenses incidental to acquisition. Provision is made to recognize a decline, other than temporary in the value of long term investments. Current investments are stated at lower of cost and fair value. 6) VALUATION OF INVENTORIES a) Inventories comprising Raw Materials, Work-in-Progress, Finished Goods, Stores and Loose Tools, are valued at lower of cost or net realizable value. b) Incomplete job contracts are valued at the direct cost incurred on such contracts. 7) EMPLOYEE BENEFITS A) Short Term Employee Benefits All employee benefits falling due wholly within 12 months of rendering the services are classified as short term benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service. B) Post-Employment Benefits a) Defined Contribution Plans: The Company has defined contribution plans for post employment benefits in the form of Superannuation Fund for Managers/Officers which is administered by Life Insurance Corporation of India (LIC), Provident Fund for employees at manufacturing facility administered by Regional Provident Fund Authorities, besides ESIC and Labour Welfare Fund. The Company's contributions to Defined Contribution Plans are charged to Profit and Loss Account as and when incurred and the Company has no further obligation beyond making the contributions. b) Defined Benefits Plans: i. The Company's liabilities towards gratuity, leave encashment and compensated absence are determined and provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method for measuring the liability is the Projected Unit Credit Method. ii. In respect of employees, other than those working at manufacturing facilities, provident fund contributions are made to a trust administered by trustees. The interest payable by the trust to the members shall not be lower than the statutory rate declared by the Central Government and shortfall, if any, shall be made good by the Company. iii. Actuarial gains and losses are immediately recognized in the Profit and Loss Account of the year without resorting to any amortization/deferment. c) Termination Benefits: Termination benefits are immediately recognized as an expense in Profit and Loss Account, as and when incurred. 11) EMPLOYEE STOCK OPTION SCHEME In respect of stock options granted pursuant to the Company's stock option scheme, the intrinsic value, if any, of the option (excess of market price of the share over the exercise price of the option) on the grant date is treated as discount and accounted as employee compensation cost over the vesting period. 12) PROVISIONS AND CONTINGENT LIABILITIES Provision is recognized when there is 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 their 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 estimates. Contingent liabilities are disclosed where there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. 13) FOREIGN CURRENCY TRANSACTIONS a) Foreign currency transactions are recorded on initial recognition at the exchange rate in force on the date of the transaction. Exchange differences arising on settlement of monetary items (cash, receivables, payables etc.) are recognized in Profit and Loss Account in the period in which they arise. b) Foreign currency monetary items are reported at exchange rates brvailing at the end of the accounting period and the gains/losses are recognized in the Profit and Loss Account. c) Long term foreign currency monetary items which form part of the Company's net investment in non - integral foreign operation, are reported at exchange rates brvailing at the end of the accounting period and the gains/losses are accumulated in foreign currency translation reserve, until the disposal of the net investment. d) The brmium or discount arising at the inception of forward exchange contracts is amortized as an expense or an income over the life of the contract. 14) EXPENSES ON ISSUE AND brMIUM ON REDEMPTION OF SECURITIES Expenses on issue of shares and debentures and brmium on redemption of debentures are charged to Securities Premium Account. 15) TAXES ON INCOME Current tax is determined as the amount of tax payable in respect of estimated taxable income for the year. Deferred tax is recognized, subject to the consideration of prudence as per Accounting Standard-22 (Accounting for taxes on income) on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Where there are unabsorbed debrciation or carry forward losses, deferred tax assets are recognized only to the extent that there is timing difference the reversal of which will result in sufficient income. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. NOTE 1: I. Borrowings and Securities: Working Capital Borrowings from Consortium banks on Cash Credit, Overdraft /Short Term Loan and Non-Fund based facilities are secured by first pari-passu charge on stock of Raw Materials, Stock in Process, Semi-finished and Finished Goods, Consumable Stores and Spares, Bills Receivable, Book Debts and Other Moveable Current Assets (both brsent and future) of the Company; and Second pari passu charge on the fixed assets of the Company (both brsent and future) at Udhana, Surat and Hosur Road Bangalore. Credit facilities including sub-limits extended by consortium banks to Batliboi Environmental Engineering Limited (BEEL), are secured by second pari-passu charge on the fixed assets of the Company (both brsent and future) at Udhana, Surat and Hosur Road Bangalore NOTE 2 : (Contd.) III. Provident fund: The fair value of the assets of Provident Fund Trust as of Balance Sheet date is greater than the obligation, including interest, and also the returns on these plan assets including the amount already provided are sufficient to take care of PF interest obligations, over and above the fixed contribution recognized. XI-E. Segment Reporting: The Company has considered business segments as the primary segments for disclosure. Segments have been identified in line with the Accounting Standards on Segment Reporting (AS-17), taking into account the nature of business, products and services, the Company's organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not identifiable to the individual segments are included under unallocated. The Company has classified its business into the following segments: a) Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses, cranes etc. b) Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification, waste recovery, and auto control systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning, and flat-knitting machines etc XIV. Previous year's figures have been reclassified and regrouped to conform to current year's classification and grouping. Figures in bracket rebrsent brvious year's figures. As per our report attached of even date For and on behalf of the Board of Directors For V. SANKAR AIYAR & CO. Chartered Accountants Firm Regn. No :109208W ARVIND MOHAN Partner Membership No.: 124082 NIRMAL BHOGILAL Chairman DIN No. 00173168 VIVEK SHARMA Managing Director DIN No. 01541498 brMA CHANDRASEKHAR Chief Financial Officer NAMITA THAKUR Company Secretary Place : Mumbai Date : 6th May, 2016 |
