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Coromandel Engineering Company

BSE: 533167|NSE: COROENGG|ISIN: INE312J01012|SECTOR: Engineering
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Mar 24, 16:00
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Coromandel Engineering Company is not traded in the last 30 days
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Mar 15
Accounting Policy Year : Mar '16

1. CORPORATE INFORMATION

Coromandel Engineering Company Limited (CEC) was incorporated as a Public Limited Company in the year 1947 and the shares of the Company are listed in Bombay Stock Exchange (BSE). CEC is in the business of Construction and Property Development.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1. Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention, on accrual basis and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 / Companies Act 1956, as applicable. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2. Use of estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses for the year and disclosure of contingent liabilities as on the date of Balance Sheet. The estimates and assumptions used in the accompanying financial statements are based upon the management''s evaluation of relevant facts and circumstances as on the date of the financial statements. Actual amounts could differ from these estimates and the differences between the actual results and estimates are recognized in the periods in which the results are known/materialize.

2.3. Fixed Assets

Fixed Assets are carried at cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance etc. attributable to acquisition and installation of assets and borrowing costs incurred up to the date of commencing operations. Impairment loss is recognized, where applicable; when the carrying value of fixed assets exceeds its market value or the value in use, whichever is higher.

2.4. Depreciation

Depreciation on Fixed Assets is provided as per revised useful life contained in Schedule II of the Companies Act, 2013.

2.5. Investments

All investments are valued at cost. Diminution in the value of investments, other than those which are temporary in nature, is provided for.

2.6. Inventories

Materials at site are valued at cost on Weighted Average Method. Work-in-Progress in respect of contracts till attaining a reasonable progress level and in property development, till significant risks and rewards of ownership are transferred, is valued at cost plus proportionate overheads. Unsold land is valued at cost.

2.7. Revenue Recognition

i) Revenue in respect of construction contracts, including Property Development activity, is recognized on percentage of completion method. Percentage of completion is arrived at as the proportion of contract costs incurred (including directly attributable borrowing costs) up to the Balance Sheet date to the estimated total contract costs.

ii) Dividend from investments is accounted when right to receive is established.

2.8. Contract Revenue /Sales

i) Revenue in respect of billed and unbilled contracts/property development in progress includes recognized profits based on percentage of completion and retention on bills. Provision for expected losses is made irrespective of percentage of completion.

ii) Revenue from Property Development activity is recognized when significant risks and rewards of ownership in the land and/or building are transferred to the customers.

iii) Bill raised for value of work done in respect of completed and ongoing contracts including retention on bill is disclosed as proceeds on contracts.

iv) Sale of goods and services are recognized when the goods are delivered or services rendered.

v) Sales are recorded net of trade discounts/ rebates exclusive of VAT.

2.9. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of assets that necessarily takes substantial period of time to get ready for intended use are treated as part of the cost of such assets. Borrowing costs attributable to unsold properties that are under development are inventoried and charged to revenue as and when they are sold. All other borrowing costs are charged to revenue.

2.10. Employee Benefits

a. Short Term

Short term employee benefits, including accumulated compensated absences, are recognized as an expense as per the Company''s scheme, based on expected obligations on undiscounted basis.

b. Long term

i. Leave encashment

This is provided for based on the actuarial valuation using the projected unit credit method.

ii. Provident Fund

Contributions are made to the Company''s Employees Provident Fund Trust in accordance with the fund rules. The interest rate payable by the trust to the beneficiaries every year is notified by the Government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

iii. Superannuation

This is defined contribution plan. Fixed contributions to the Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India are charged to the Statement of Profit and Loss. The Company has no further obligations for future superannuation benefits other than its annual contributions and recognizes such contributions as an expense in the year incurred.

iv. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). Liability for future gratuity benefits is accounted based on actuarial valuation, as at the Balance Sheet date, determined every year by LIC using projected unit credit method. Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarial assumptions, are recognized in the Statement of Profit and Loss.

2.11. Taxation

Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws. Provision for deferred tax is made for timing differences arising between the taxable incomes and accounting income calculated at the tax rates enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual certainty that they will be realized and are reviewed for appropriateness of their respective carrying values at each Balance Sheet date.

2.12. Provisions & Contingent Liabilities:

Provisions are recognized for known liabilities that can be measured where the Company has a present obligation as a result of past event. Contingent Liabilities are disclosed by way of note.

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