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Contech Software
BSE: 532397|ISIN: INE971A01014|SECTOR: Computers - Software Medium/Small
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Contech Software is not listed on NSE
« Mar 12
Accounting Policy Year : Mar '13
1) BASIS OF ACCOUNTING:
 
 The Financial Statements are prepared as per historical cost convention
 and in accordance with the Generally Accepted Accounting Principles
 (GAAP) in India, the provisions of the Companies Act 1956, and the
 applicable Accounting Standards notified under the Companies(Accounting
 Standards) Rules,2006. All Incomes and Expenditures having material
 bearing on the Financial Statements are recognized on accrual basis.
 
 2) USE OF ESTIMATES:
 
 The presentation of the Financial Statements, in conformity with the
 Generally Accepted Accounting policies, require the management to make
 estimates and assumptions that affect the reported amount of Assets and
 Liabilities, Revenues and Expenses and disclosure of contingent
 liabilities. Such estimation and assumptions are based on management''s
 evaluation of relevant facts and circumstances as on date of Financial
 Statements. Difference between the actual results and estimates are
 recognized in the period in which the results are known / materialized.
 
 3) REVENUE RECOGNITION:
 
 Sales are stated net of rebate and trade discount. It excludes Central
 Sales Tax and State Value Added Tax. With regard to sale of products,
 income is reported when practically all risks and rights connected with
 the ownership have been transferred to the buyers. This usually occurs
 upon dispatch of the goods.
 
 Interest on deposits is recognized on accrual basis.
 
 4) FIXED ASSETS AND DEPRECIATION:
 
 Fixed Assets are stated at cost of acquisition or construction, net of
 accumulated depreciation, cenvat credit and adjustments arising from
 exchange rate variations relating to borrowings attributed to fixed
 assets. Cost includes incidental expenses capitalized from time to time
 on their due recognition, trial run expenses and interest attributable
 to the project till the date of commissioning.
 
 The company has provided depreciation on all Fixed Assets on Written
 Down Value Method on pro-rata basis in accordance with the Section 205
 (2)(a), at the rates specified in Schedule XIV of the Companies Act
 1956.
 
 5) BORROWING COST:
 
 Borrowing costs are recognized in the period to which they relate,
 regardless of how the funds have been utilized, except where it relates
 to the financing of construction or development of assets requiring a
 substantial period of time to prepare for their intended future use.
 Interest on borrowings if any is capitalized up to the date when the
 asset is ready for its intended use. The amount of interest capitalized
 for the period is determined by applying the interest rate applicable
 to respective borrowings.
 
 6) INVENTORIES:
 
 Inventories of goods traded is valued at lower of cost or net
 realizable value. Cost is determined on first-in-first-out basis.  Cost
 includes cost of material and other related expenses.
 
 7) EMPLOYEES RETIREMENT BENEFITS:
 
 (a) Short Term
 
 Short Term employee benefits are recognized as an expense at the
 undiscounted amount expected to be paid over the period of services
 rendered by the employees to the company.
 
 (b) Long Term
 
 The Company has both defined contribution and defined benefit plans, of
 which some have assets in approved funds. These plans are financed by
 the Company in the case of defined contribution plans.
 
 Defined Contribution Plans
 
 These are plans in which the Company pays pre-defined amounts to
 separate funds and does not have any legal or informal obligation to
 pay additional sums. These comprise of contributions to Employees
 Provident Fund. The Company''s Payments to the defined contributions
 plans are reported as expenses during the period in which the employee
 perform the services that the payment covers.
 
 Defined Benefit Plans
 
 Expenses for defined benefit gratuity payment plans are calculated as
 at the balance sheet date by independent actuaries in the manner that
 distributes expense over the employees working life. These commitments
 are valued at the present value of the expected future payments, with
 consideration for calculated future salary increases, using a
 discounted rate corresponding to the interest rate estimated by the
 actuary having regard to the interest rate on Government Bonds with a
 remaining term i.e. almost equivalent to the average balance working
 period of employees.
 
 Other Employee Benefit
 
 Compensated absences which accrue to employees and which can be carried
 to future periods but are expected to be encashed or availed in twelve
 months immediately following the year end are reported as expenses
 during the year in which the employees perform the services that the
 benefit converts and the liabilities are reported at the undiscounted
 amount of the benefits after deducting amounts already paid.
 
 8) IMPAIRMENT OF ASSETS:
 
 The carrying value of assets of the Company''s cash generating units are
 reviewed for impairment annually or more often if there is an
 indication of decline in value. If any indication of such impairment
 exists, the recoverable amount of those assets are estimated and
 impairment loss is recognized, if the carrying amount of those assets
 exceeds their recoverable amount. The recoverable amount is the greater
 of the net selling price and their value in use. Value in use is
 arrived at by discounting the estimated future cash flows to their
 present value based on appropriate discount factor. Net selling price
 is the estimated selling price in the ordinary course of business, less
 estimated cost of completion and to make the sale.
 
 As per the assessment conducted by the Company at March 31, 2013, there
 were no indications that the fixed assets have suffered an impairment
 loss.
 
 9) TAXATION:
 
 A provision for Current Tax has been made at the current tax rate based
 on assessable income or on the basis of Sec.  115JB of the Income Tax
 Act, 1961 (Minimum Alternative Tax), whichever is higher.
 
 Deferred Tax resulting from timing differences that are temporary in
 nature between accounting and taxable profit is accounted for, using
 the tax rates and laws that have been enacted as on the Balance Sheet
 date. The deferred tax asset is recognized and carried forward only to
 the extent that there is a reasonable or virtual certainty, as the case
 may be, that the asset will be realised in future.
 
 10) EARNING PER SHARE:
 
 Basic earning per share is calculated by dividing the net profit after
 tax for the year attributable to Equity Shareholders of the Company by
 the weighted average number of Equity shares outstanding during the
 year. Diluted earning per Share is calculated by dividing net profit
 attributable to equity shareholders (after adjustment for diluted
 earnings) by average number of weighted equity shares outstanding
 during the year.
 
 11) CASH FLOW STATEMENT:
 
 The Cash Flow Statement is prepared by the Indirect Method set out in
 Accounting Standard 3 on Cash Flow Statement and presents the cash
 flows by operating, investing and financing activities of the Company.
 
 Cash and Cash equivalents presented in Cash Flow Statement consist of
 cash on hand and demand deposits with banks.
 
 12) PROVISIONS AND CONTINGENT LIABILITIES:
 
 A provision is recognized when the Company has a present legal or
 constructive 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 reliable estimate can be made. Provisions
 (excluding long term benefits) are not discounted to its present value
 and are determined based on best estimated required to settle the
 obligation at the balance sheet date. These are reviewed at each
 balance sheet date and adjusted to reflect the current best estimates.
 Contingent liabilities are not recognized but are disclosed in the
 notes to the Financial Statements. A contingent asset is neither
 recognized nor disclosed.
Source : Dion Global Solutions Limited
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