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Moneycontrol.com India | Accounting Policy > Computers - Hardware > Accounting Policy followed by Cerebra Integrated Technologies - BSE: 532413, NSE: CEREBRAINT
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Cerebra Integrated Technologies
BSE: 532413|NSE: CEREBRAINT|ISIN: INE345B01019|SECTOR: Computers - Hardware
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Accounting Policy Year : Sep '13
a) SYSTEM OF ACCOUNTING:
 
 Accounts are prepared on accrual basis under historical cost convention
 as a going concern and comply with the mandatory Accounting Standards
 as specified in Companies (Accounting Standards) Rule 2006 prescribed
 by the Central Government. The accounting policies have been
 consistently applied by the Company and are consistent with those used
 in the previous year.
 
 b) USE OF ESTIMATES:
 
 The preparation of financial statements in accordance with the
 generally accepted accounting principles requires management to make
 judgements, estimates and assumptions that affect the application of
 accounting policies and the reported amounts of reporting period.
 Estimates and underlying assumptions are reviewed on an ongoing basis.
 Revision to accounting estimate is recognized in the period in which
 the estimates are revised and in any future period affected.
 
 c) TANGIBLE ASSETS, INTANGIBLE ASSETS AND CAPITAL WIP:
 
 Fixed assets are stated at historical cost less accumulated
 depreciation. Costs include expenditure directly attributable to the
 acquisition of the asset. Borrowing costs directly attributable to the
 construction or production of qualifying assets are capitalized as part
 of the cost.
 
 Intangible assets are stated at the consideration paid for acquisition
 less accumulated amortization.
 
 Cost of fixed assets not ready for use before the balance sheet date is
 disclosed as capital work-in-progress. Advances paid towards the
 acquisition of fixed assets outstanding as of each balance sheet date
 is disclosed under long term loans and advances.
 
 d) DEPRECIATION:
 
 Depreciation has been provided on assets on straight line method in
 accordance with the provisions of Schedule XIV of the Companies Act,
 1956. Depreciation on additions / deletion during the year has been
 provided for on pro-rata basis. Assets purchased/installed during the
 year costing less than Rs. 5000/- are fully depreciated.
 
 e) INVESTMENTS:
 
 Long term investments are stated at cost less diminution other than
 temporary decline in the value of such investments, if any. Current
 investments are valued at lower of cost and fair value determined by
 category of investment. The fair value is determined using quoted
 market price / market observable information adjusted for cost of
 disposal. On disposal of the investment, the difference between its
 carrying amount and net disposal proceeds is charged or credited to the
 statement of profit and loss.
 
 f) RETIREMENT AND OTHER TO EMPLOYEE BENEFITS:
 
 i. Short term employee benefits: All employee benefits falling due
 wholly within twelve months of rendering service are classified as
 short term employee benefits. The benefits like salaries, wages, short
 term compensated absences, etc. and expected cost of bonus, are
 recognized in the period in which employee renders the related service.
 
 ii.  Post employee benefits:
 
 Defined Contribution plans: The state governed provident fund scheme,
 insurance scheme, and employee pension scheme are defined contribution
 plans. The contribution paid / payable under the schemes is recognized
 during the period in which the employee renders the related services.
 
 Defined benefits Plans: The employee gratuity fund schemes, pension
 scheme and provident fund schemes are defined benefits plans. Wherever
 applicable, the present value of obligations under defined benefit
 plans is determined based on actuarial valuation using the project unit
 credit method, which recognizes each period of service as giving rise
 to additional unit of employee benefit entitlement and measures each
 unit separately to build up final obligation.
 
 The obligation is measured in the present value of the estimated future
 cash flows. The discount rates used for determining the present value
 of the obligation under defined benefit plans, is based on the market
 yield on the Government securities, of a maturity period equivalent to
 the weighted average maturity profile of the related obligations at the
 Balance Sheet date.
 
 The obligations for long term employee benefits such as long term
 compensated absences, etc. is recognized in the similar manner as in
 the case of defined benefit plans mentioned above.
 
 g) REVENUE RECOGNITION:
 
 i. Sales include applicable excise duty but exclude Sales tax. Income
 from sales is recognized upon completion of sale. Warranty charges
 forming part of the sales are not recognized separately and expenditure
 incurred in this regard is accounted when incurred.
 
 ii. Income from IT services is recognized upon completion of milestones
 wherever payments are linked to such milestones. In cases where
 payments are based on completion of each man-hour, man-days, man-month
 of service rendered, revenue is recognized upon respective completion
 of the same.
 
 h) INVENTORY:
 
 Inventories are valued at lower of cost or net realizable value. In
 respect of traded stock cost is computed under first in first out
 (FIFO) method whereas for raw materials the same is computed under
 weighted average method.
 
 i) FOREIGN CURRENCY TRANSACTIONS:
 
 The Company is exposed to currency fluctuations on foreign currency
 transactions. Foreign currency transactions are accounted in the books
 of account at the exchange rates closely approximating those prevailing
 on the date of transaction.
 
 The difference between the rate at which foreign currency transactions
 are accounted and the rate at which they are realized is recognized in
 the statement of profit and loss.
 
 Monetary foreign currency assets and liabilities at period end are
 restated at the closing rate. The difference arising from the
 restatement is recognized in the statement of profit and loss.
 
 j) ACCOUNTING FOR CLAIMS & CONTINGENCIES:
 
 All known liabilities of material value have been provided for in the
 accounts except liabilities of contingent in nature, which have been
 disclosed at their estimated value in the notes to account in
 accordance with accounting standard (AS 29). As regards provisions, it
 is only that obligation arising from past events existing independently
 of enterprise''s future actions that are recognized as provisions.
 Contingent liabilities are not recognized but are disclosed in the
 additional information. Contingent assets are neither recognized nor
 disclosed in the financial statement.
 
 k) IMPAIRMENT OF ASSETS:
 
 The Company assesses at each balance sheet date whether there is any
 objective evidence that a financial asset or group of financial assets
 is impaired. If any such indication exists, the Company estimates the
 amount of impairment loss. The amount of loss for short-term
 receivables is measured as the difference between the assets carrying
 amount and undiscounted amount of future cash flows. Reduction, if any,
 is recognized in the statement of profit and loss. If at the balance
 sheet date there is any indication that if a previously assessed
 impairment loss no longer exists, the recognized impairment loss is
 reversed, subject to maximum of initial carrying amount of the
 short-term receivable.
 
 Reversal of impairment loss is recognized immediately as income in the
 statement of profit and loss.
 
 l) EARNINGS PER SHARE
 
 Basic Earnings per share are calculated by dividing net profit or loss
 for the year attributable to equity share holders (after deducting
 attributable taxes and dividend on cumulative preference shares for the
 year) by the weighted average number of equity shares outstanding
 during the year.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity share holders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 m) Taxes:
 
 Income tax:
 
 The current charge for income taxes is calculated in accordance with
 the relevant tax regulations. Tax liability for domestic taxes has been
 computed after considering Minimum Alternate Tax (MAT). The excess tax
 paid under MAT provisions being over and above regular tax liability
 can be carried forward and set off against future tax liabilities
 computed under regular tax provisions. Accordingly, MAT credit has been
 recognized, wherever applicable on the balance sheet which can be
 carried forward from the year of recognition.
 
 Deferred tax:
 
 Deferred tax assets are not recognized as there is no reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realized.
 
 The company has not recognized net deferred tax asset on a conservative
 basis, in the view of prudence.
 
 n) CASH FLOW STATEMENT
 
 Cash flows are reported using the indirect method, whereby profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature and any deferrals or accruals of past or future cash receipts
 and payments. The cash flows from regular revenue generating,
 financing, and investing activities of the company are segregated.
Source : Dion Global Solutions Limited
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