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
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« Mar 12
Accounting Policy Year : Mar '13
1.1.Basis of preparation of Financial Statements
 The financial statements are prepared under the historical cost
 convention, on accrual basis and in accordance with the Generally
 Accepted Accounting Principles in Indiaflndian GAAP) and comply with
 the Accounting Standards prescribed in the Companies (Accounting
 Standards) Rules, 2006 and the relevant provisions of the Companies
 Act, 1956.
 1.2.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 of the date of the financial statements and
 the reported amount of revenues and expenses for the year and
 disclosure of contingent liabilities as of 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 of the date of the financial statements. Actual
 amounts could differ from these estimates.
 1.3.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 recognised,
 where applicable, when the carrying value of fixed assets exceeds its
 market value or the value in use whichever is higher.
 Depreciation on Fixed Assets is provided on Straight Line Method as per
 Schedule XIV of the Companies Act, 1956. Depreciation on impaired
 assets is provided by adjusting the depreciation charge in the
 remaining periods so as to allocate the asset''s revised carrying amount
 over its remaining useful life. Intangible Assets are amortised over a
 period of three years.
 All investments are valued at cost. Diminution in the value of
 investments other than temporary in nature is provided for.
 Materials at site are valued at cost on FIFO 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.
 1.7.Revenue Recognition
 i) Revenue in respect of construction contracts including Property
 Development activity is recognised 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 received.
 1.8.Contract Revenue /Sales
 i) Revenue in respect of billed and unbilled contracts/property
 development in progress includes recognised 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 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 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
 sales tax.
 1.9.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. All other borrowing costs are charged to revenue.
 1.10.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. Long term employee benefits comprise of leave encashment which 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 being 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.
 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 Profit and Loss
 Account. 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.
 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 recognised immediately in the profit and
 loss account.
 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
 income 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
 realised and are reviewed for appropriateness of their respective
 carrying values at each Balance Sheet date.
 1.12.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.
Source : Dion Global Solutions Limited
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