SENSEX NIFTY India | Accounting Policy > Engineering > Accounting Policy followed by Coromandel Engineering Company - BSE: 533167, NSE: COROENGG
Coromandel Engineering Company
BSE: 533167|NSE: COROENGG|ISIN: INE312J01012|SECTOR: Engineering
Jul 31, 17:00
-1.3 (-1.79%)
VOLUME 35,018
, :
VOLUME 8,618
« Mar 13
Accounting Policy Year : Mar '14
1.1. Basis of preparaton of Financial Statements
 The financial statements are prepared under the historical cost
 conventon, on accrual basis and in accordance with the Generally
 Accepted Accountng Principles in India(Indian GAAP) and comply with the
 Accountng Standards prescribed in the Companies (Accountng Standards)
 Rules, 2006 and the relevant provisions of the Companies Act, 1956.
 2.2. Use of estmates
 The preparaton of the financial statements in conformity with the
 generally accepted accountng principles requires the management to make
 estmates and assumptons that afect the reported amount of assets and
 liabilites as of the date of the financial statements and the reported
 amount of revenues and expenses for the year and disclosure of
 contngent liabilites as of the date of Balance Sheet. The estmates and
 assumptons used in the accompanying financial statements are based upon
 the management''s evaluaton of relevant facts and circumstances as of
 the date of the financial statements. Actual amounts could difer from
 these estmates.
 2.3. Fixed Assets
 Fixed Assets are carried at cost less accumulated depreciaton. Cost
 includes related taxes, dutes, freight, insurance etc. atributable to
 acquisiton and installaton of assets and borrowing costs incurred up to
 the date of commencing operatons. Impairment loss is recognised, where
 applicable, when the carrying value of fixed
 assets exceeds its market value or the value in use whichever is
 2.4 . Depreciaton
 Depreciaton on Fixed Assets is provided on Straight Line Method as per
 Schedule XIV of the Companies Act, 1956. Depreciaton on impaired assets
 is provided by adjustng the depreciaton charge in the remaining periods
 so as to allocate the asset''s revised carrying amount over its
 remaining useful life. Intangible Assets are amortsed over a period of
 three years.
 2.5. Investments
 All investments are valued at cost. Diminuton in the value of
 investments other than temporary in nature is provided for.
 2.6. Inventories
 Materials at site are valued at cost on Weighted Average method. During
 the year, the Company changed the method of valuaton of Materials at
 site from FIFO method to Weighted Average method. If the Company had
 valued the materials at site in FIFO method, the closing stock as on
 31st March 2014 would have been lower by Rs. 2.41 lakhs and loss for the
 year would be higher by Rs. 2.41 lakhs. Work-in-Progress in respect of
 contracts tll ataining a reasonable progress level and in property
 development tll significant risks and rewards of ownership are
 transferred is valued at cost.
 2.7. Revenue Recogniton
 i) Revenue in respect of constructon contracts including Property
 Development actvity is recognised on percentage of completon method.
 Percentage of completon is arrived at as the proporton of contract
 costs incurred (including directly atributable borrowing costs) up to
 the Balance Sheet date to the estmated total contract costs.
 ii) Dividend from investments is accounted when received.
 2.8. Contract Revenue /Sales
 i) Revenue in respect of billed and unbilled contracts/property
 development in progress includes recognised profits based on percentage
 of completon and retenton on bills. Provision for expected losses is
 made irrespectve of percentage of completon.
 ii) Revenue from Property Development actvity is recognised when
 significant risks and rewards of ownership in the land and/or building
 are transferred to the customer.
 iii) Bill raised for value of work done in respect of completed and
 ongoing contracts including retenton 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
 sales tax.
 2.9. Borrowing Costs
 Borrowing costs that are atributable to the acquisiton or constructon
 of assets that necessarily takes substantal period of tme to get ready
 for intended use are treated as part of the cost of such assets. 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 obligatons on undiscounted basis.
 b.  Long Term
 i. Long term employee benefits comprise of leave encashment which is
 provided for based on the actuarial valuaton using the projected unit
 credit method.
 ii.  Provident Fund
 Contributons 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 benefciaries every year is being notfed by the Government.
 The company has an obligaton to make good the shortall, if any, between
 the return from the investments of the trust and the notfed interest
 iii. Superannuaton
 This is Defined contributon plan. Fixed contributons to the
 Superannuaton Fund administered by trustees and managed by Life
 Insurance Corporaton of India are charged to the profit and Loss
 The Company has no further obligatons for future superannuaton benefits
 other than its annual contributons and recognizes such contributons as
 an expense in the year incurred.
 iv.  Gratuity
 The Company makes annual contributon to a Gratuity Fund administered by
 trustees and managed by Life Insurance Corporaton of India (LIC).
 Liability for future gratuity benefits is accounted based on actuarial
 valuaton, 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 efects of changes in
 actuarial assumptons, are recognised immediately in the 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 tming diferences arising between the taxable
 income and accountng income calculated at the tax rates enacted or
 substantally enacted by the Balance Sheet date. Deferred tax assets are
 recognized only if there is a virtual certainty that they will be
 realised and are reviewed for appropriateness of their respectve
 carrying values at each Balance Sheet date.
 2.12. Provisions & Contngent Liabilites:
 Provisions are recognized for known liabilites that can be measured
 where the Company has a present obligaton as a result of past event.
 Contngent Liabilites are disclosed by way of note.
Source : Dion Global Solutions Limited
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