(a) Basis of Accounting
The financial statements are prepared under historical cost convention
on a going concern basis in accordance with the applicable accounting
standards issued by the Institute of Chartered Accountants of India and
relevant provisions of the CompaniesAct, 1956
(b) Revenue Recognition
Revenue is recognised when the significant risk and rewards of
ownership of the goods have been passed to the buyers. Sales include
amount recovered towards Excise Duty and Sales Tax_
(c) Fixed Assets
Fixed Assets are stated at cost. Cost Comprises the purchase price and
any attributable cost of bringing the asset to its working condition
for its intended use and also comprises of borrowing costs attributable
to acquisition and construction of assets up to the date when such
asset is ready forits intended use.
Pre-operative expenses for Solar Photovoltaic Cell Unit, including
interest on borrowings upto the date of commercial operations, are
treated as part of the project cost and capitalised.
Machinery spares which are specific to particular item of fixed assets
and whose use is irregular are capitalised as part of the cost of
Depreciation on fixed assets is provided on the Straight Line Method
as perthe rates and in the manner prescribed by Schedule XIV of the
(e) Inventories Inventories are valued as under:
(i) Raw Materials - Is valued at cost or net realisable value whichever
is lower. Cost is arrived on Fl FO basis.
(ii) Finished Goods - Valued at Material cost plus estimated conversion
(iii) Work-in-Progress - Valued at Material cost plus estimated
(f) Employee Benefits
In accordance with the Payment of Gratuity Act, 1972, Euro Multivision
Ltd provides forgratutity, a defined benefit retirement plan (the
Gratuity Plan) covering eligible employees of the Company. The Gratuity
Plan provides a lump sum payment to vested employees at retirement,
death or termination of employment, of an amount based on the
respective employees'' salary and the tenure of employment with the
The Company has Group Gratuity Policy managed by LICand liability
foremployee benefits has been determined by an actuary, appointed for
the purpose, in conformity with the principles set out in the
Accounting Standard 15 (Revised) Liabilities with regard to the
Gratuity Plan are determined by actuarial valuation at Balance Sheet
date using the projected unit credit method. The Company contributes
all ascertained liabilities to the Euro Multivision Ltd Employee''s
Group Gratuity Fund Trust. Actuarial gains and losses arising from
experience adjustments and changes in actuarial assumptions are
recognized in the Profit and Loss Account in the period in which they
Eligible Employees of Euro Multivision Ltd at plant receive benefits
from provident fund, which is a defined contribution plan. Both the
employee and the Company make monthly contributions to the provident
fund equal to a specified percentage of the covered employee''s salary
Employees Group Insurance Scheme
Euro Multivision Ltd contributes towards Employee''s Group Insurance
Scheme, which is a defined contribution plan
for its employees at plant.
The Company provides for the encashment of leave to its employees at
plant subject to certain rules and is recognized as long term
compensated absence. The employees are entitled to accumulate leave
subject to certain limits, for future encashment. The liability is
provided based on the number of days of unutilised leave at each
balance sheet date on the basis of an independent actuarial valuation.
The Company provides for the encashment of leave to its employees at
head office and sales departments on an yearly basis and hence
recognized as short term compensated absence.
Long term investments are stated at cost of acquisition. Diminution in
value of such long term investments is not provided for except where
determined to be of permanent nature.
(h) Taxes on Income
Tax on income for the current period is determined on the basis of
estimated taxable income and tax credits computed in accordance with
the provisions of the Income Tax Act, 1961 and based on the expected
outcome of assessments/appeals.
Deferred Tax resulting from ''timing difference'' between bookand taxable
profit for the yearis accounted forusing the current tax rates. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable certainty that the assets will be adjusted
in future. However, in case of deferred tax assets representing
unabsorbed depredation or carry forward losses are recognised, if and
only if there is a virtual certainty that there would be adequate
future taxable income against which such deferred tax assets can be
Minimum Alternate Tax (MAT) eligible for set-off in subsequent years
(as per tax laws), is recognised as an asset by way of credit to the
Profit and Loss Account only if there is convincing evidence of its
realisation. At each Balance Sheet date, the carrying amount of MAT
Credit Entitlement receivable is reviewed to reassure realisation.
(i) Borrowing Costs
Borrowing Cost attributable to acquisition, construction or production
of qualifying assets are capitalized as part of the cost of that asset,
till the asset is ready for use. Other borrowing costs are recognized
as an expense in the period in which these are incurred.
(j) Foreign Currency Transactions
(a) The reporting currency of the Company is Indian Rupee.
(b) Foreign currency transactions are recorded on initial recognition
in the reporting currency, using the exchange rate at the date of the
transaction. At each balance sheet date, foreign currency monetary
items are reported using the closing rate. Non-monetary items which are
carried at historical cost denominated in a foreign currency are
reported using the exchange rate at the date of the transaction.
(c) Exchange differences that arise on settlement of monetary items or
on reporting at each balance sheet date of the Company''s monetary items
at the closing rate are recognised as income or expense in the period
in which they arise.
(d) The premium or the discount on forward exchange contracts not
relating to firm commitments or highly probable forecast transactions
and not intended for trading or speculation purpose is amortised as
expense or income overthe life of the contract.
(e) Gain or loss on forward exchange contracts for non speculation
relating to firm commitments is computed by multiplying theforeign
currency amountoftheforwardexchangecontractbythe difference between
theclosing rate available at the reporting date and the contracted
forward rate. Such gain or loss is recognised in the profit and loss
(f) Gain or loss on forward exchange contracts for speculation relating
to firm commitments is computed by multiplying the foreign currency
amount of the forward exchange contract by the difference between the
forward rate available at the reporting date for the remaining maturity
of the contract and the contracted forward rate. Such gain or loss is
recognised in the profit and loss account.
(g) Cash flows arising on account of roll-over / cancellation of
forward contracts are recognised as income / expense of the period in
line with the movement in the underlying exposures.
(h) Pursuant to the notification of the Companies (Accounting
Standards) Amendment Rule 2009 issued by Ministry of Corporate Affairs
on March 31 2009 amending Accounting Standard - 11 (AS -11) The Effects
of Changes in Foreign Exchange Rates (revised 2003)'', exchange
differences relating to long term monetary items are dealt with in the
(i) Exchange differences relating to long term monetary items, arising
during the year, in so far as they relate to the acquisition of a
depreciable capital asset are added to / deducted from the cost of the
asset and depreciated overthe balance life of the asset.
(ii) In other cases, such differences are accumulated in the Foreign
Currency Monetary Translation Difference Account and amortised to the
profit and loss account over the balance life of the long term monetary
item but not beyond March 31,2011.
(iii) All other exchange differences are recognised as income or
expense in the profit and loss account.
(k) Impairment of Asset
The carrying amount of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. An impairment loss recognised in prior accounting periods is
reversed if there has been change in the estimate of the recoverable
Leases other than finance lease, are operating leases, and the leased
assets are not recognised on the Company''s balance sheet. Payments
under operating leases are recognised in Profit and Loss Account on a
straight-line basis overthe term of the lease.
(m) Provisions and Contingent Liabilities
Provisions, Contingent Liabilities and Contingent Assets: Provisions
involving a substantial degree of estimation in measurement are
recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
Financial Statements. ContingentAssets are neitherrecognised
nordisclosed in the Financial Statements.