SIGNIFICANT ACCOUNTING POLICIES 1. Basis of brparation of financial statements The financial statements are brpared and brsented under the historical cost convention on the accrual basis of accounting and comply with Rule 7 of the Companies (Accounts) Rules, 2014, Section 133 of the Companies Act, 2013 and guidelines issued by SEBI. Accounting policies have been applied consistently except where a newly issued accounting standard is initially adopted or a revision in existing accounting standard requires a change in accounting policy hitherto in use. 2. Use of estimates The brparation of financial statements in conformity with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Actual results may differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. 3. Fixed assets and debrciation/amortisation Tangible Fixed assets are stated at historical cost less accumulated debrciation. Cost comprises purchase price, duties, levies and other directly attributable expenses of bringing the asset to its working condition for the intended use. Advances paid towards acquisition of fixed assets and the cost of assets acquired but not ready for use as at the balance sheet date are disclosed under capital work-in-progress. Debrciation on tangible fixed assets, is provided using the written down value method as per the useful life of various assets specified under Schedule II to the Companies Act, 2013 after considering the residual value as brscribed under the said schedule except in case of Computers where in residual value @ 2.50% of the original cost of the asset is taken as residual value instead of 5% brscribed under the said schedule. In respect of fixed assets purchased during the year, debrciation is provided on a pro-rata basis from the date on which such asset is ready to put to use. Intangible fixed assets are stated at historical cost less accumulated amortisation. Cost comprises purchase price, duties, levies and other directly attributable expenses of bringing the assets to its working condition for the intended use. Cost is amortised over its useful economic life based on expected benefit. 4. Impairment of assets In accordance with accounting standard 28 on 'Impairment of assets', the Company assesses at each balance sheet date whether there is an indication that assets of the Company may be impaired. Where any such indication exists the company estimates the recoverable amount of the assets. The recoverable amount of the assets (or where applicable that of the cash generating unit to which the asset belongs) is estimated at the higher of its net selling price and its value in use. An impairment charge is recognised whenever the carrying amount of the asset or cash-generating unit exceeds its recoverable amount. 5. Investments Long-term investments are carried at cost less any other than temporary diminution in value, determined separately for each individual investment. Current investments are carried at lower of cost and fair value. 6. Inventories Inventories are valued at lower of cost and net realisable value. Cost is determined under the first-in, first-out method and includes all costs incurred in bringing the inventories to their brsent location and condition. Finished goods and Work-in-progress include appropriate proportion of costs of conversion. 7. Revenue recognition Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. Sales are stated net of excise duty, sales tax and trade discounts. Interest on deployment of surplus funds is recognized using the time-proportion method, based on interest rates implicit in the transaction based on reasonable certainty of receipt. Interest on advances is recognized when the ultimate collection is not uncertain. Dividend income is recognized when the right to receive dividend is established. Service revenue is recognized, net of service tax, when the services are performed. 8. Employee benefits (i) Post-employment Benefits: (a) Defined Contribution Plans: The company has Defined Contribution Plans for post employment benefits, charged to Profit & Loss Account, in form of: a. Provident Fund / Employee's Pension Fund administered by the Regional Provident Fund Commissioner, b. Superannuation Fund as per Company's policy administered by Life Insurance Corporation of India; c. Group Life Insurance cover, as per company's policy. (b) Defined Benefit Plans: Funded Plan: The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust, funded with Life Insurance Corporation of India. Unfunded Plan: The Company has unfunded Defined Benefit Plans in the form of Compensated Absences [CA] as per Company policy. Liability for the above Defined Benefit Plans is provided on the basis of actuarial valuation, as at the balance sheet date, carried out by independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit Method. (ii) The actuarial gains and losses arising during the year are recognized in the Profit & Loss Account for the year. 9. Foreign currency transactions Foreign currency transactions are recorded at exchange rates brvailing on the date of the transaction. The difference between the actual rate of settlement and the rate on the date of the transaction is charged or credited to profit and loss account. In respect of monetary current assets and liabilities denominated in foreign currencies the overall net gain or loss, if any, on conversion at the exchange rates brvailing on the date of the balance sheet is charged to revenue. 10. Taxation Income tax expense comprises current tax expense and deferred tax expense/credit. Current tax Provision for current tax is calculated in accordance with the provisions of the Income-Tax Act, 1961 and is made annually based on the tax liability computed after considering tax allowances and exemptions. Assets and liabilities rebrsenting current tax are disclosed on a net basis when there is a legally enforceable right to set off and where the management intends to settle the asset and liability on a net basis. Deferred tax Deferred tax liability or asset is recognised for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is a reasonable certainty that the assets can be realised in future; however where there is unabsorbed debrciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised. 11. Earnings per share ('EPS') Basic EPS is computed using the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year except where the results would be anti dilutive. The number of equity shares is adjusted for any share splits and bonus shares issued effected prior to the approval of the financial statements by the Board of Directors. 12. Contingencies and provisions The Company creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. 2. OTHER EXPENSES Manufacturing Expenses Factory expenses Power and fuel Labour charges Repair to plant and machinery Factory maintenance expenses Other manufacturing expenses Administrative Expenses Office rent Telephone expenses Professional fees Auditors remuneration Stationery and printings Travelling expenses Insurance Donation Repair and maintenance - others PMS management fees expenses Assets discarded Corporate social responsibility Other expenses 3. MEDIUM AND SMALL ENTERPRISES Based on the information available with the Company and relied upon by the auditors to the extent enterprise could be identified as Micro and Small, the following disclosure in respect of Medium and Small Enterprises as defined under Micro Small & Medium Enterprises Development Act, 2006 is as under. Warranties - The Company provides Warranty for its products, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as on March 31, 2016 rebrsents the amount of the expected cost based on past experience of meeting such obligations. 4. PRIOR PERIOD COMPARATIVES The brvious year's figures have been regrouped / reclassified to make them comparable with those of current year. Notes referred to above, form an integral part of Balance Sheet and statement of Profit & Loss. As per our report of even date For Chandulal M. Shah & Co. Chartered Accountants FR No.101698W For and on behalf of the Board For Voltamp Transformers Limited Kanubhai S. Patel Chairman & MD Hemant P. Shaparia Director V. N. Madhani Director & Chief Financial Officer Kunjalbhai L. Patel Vice Chairman & MD Dr. Neela A. Shelat Director Sanket Rathod Company Secretary B. M. Zinzuvadia Partner M.No. 109606 Place : Ahmedabad Date : 30th May, 2016 |
