a) Fixed Assets
Stated at cost except Trade Marks which are valued based on valuation
carried out by independent agencies.
b) Borrowing costs
Borrowing costs comprising of interest etc. relating to projects are
capitalised upto the date of project completion. Other borrowing costs
are charged to Profit & Loss Account in the year of their accrual.
Depreciation on fixed assets is provided on straight line method in
accordance with Schedule XIV of the Companies Act, 1956. However, in
case of Motor Vehicles & Office Computers, the rates are based on
technical evaluation of the economic life of assets by the management
which are 15% & 24% instead of 9.50% & 16.21% respectively specified in
the said Schedule. In case of trade marks, the book value is written
off over the residual period of the validity of the relevant
registration certificate. An amount equal to the additional
depreciation on account of revaluation is transferred to the Profit &
Loss Account from the Revaluation Reserve. Value of Leasehold assets is
amortised over the respective residual lease period.
Inventories are valued at lower of cost or net realisable value. Cost
of own manufactured goods comprises of materials, labour and other
appropriate overheads including depreciation. Cenvat on stocks is added
to value of stocks. Values of stocks of raw materials, stores and
packing materials are determined on first-in first-out basis.
Long term Investments are valued at cost.Provision for any permanent
diminution in value of investments is made, if necessary. Current
investments are stated at cost or market value, whichever is lower.
However, investments under Portfolio Management Services are stated at
f) Foreign Currency Transactions
All foreign currency transactions are accounted for at prevailing rates
on the respective date of transactions. Liabilities remaining unsettled
at the year-end are translated at year-end rates. Differences in
transactions of assets and liabilities and realised gains and losses on
foreign currency transactions are recognised in the Profit and Loss
Lease Rentals are charged/accounted for in Profit and Loss Account.
h) Revenue Recognisition
Accounts are maintained on accrual basis. Revenue recognition is
postponed to a later year when it is not possible to estimate it with
reasonable accuracy. Deferred revenue expenditure is written off over
i) Retirement Benefits
a) Short-term employee benefits (compensated absenses) are recognised
as expense at the undiscounted amount in the Profit & Loss Account of
the year in which the related service is rendered based on actuarial
valuations made at the end of the year,
b) Post employment employee benefits are recognised as expense in the
Profit & Loss Account for the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable determined using actuarial valuation techniques at the end of
the year. Actuarial gains and losses in respect of post employement
benefits are charged to the Profit & Loss Account.
a) Provision for current taxes is made and retained in the accounts on
the basis of estimated tax liability as per applicable provisions of
the Income Tax Act, 1961 and considering assessment orders and
decisions of appellate authorities.
b) Deferred Tax for timing difference between tax profits and book
profits is accounted for, using tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date. Deferred
Tax Assets are recognised to the extent there is reasonable certainty
that these assets can be realised in future.
k) Impairment of Assets
Factors giving rise to any indication of any impairment of the carrying
amount of the Company''s assets are appraised at each Balance Sheet date
to determine and provide/revert an impairment loss following Accounting
Standard - 28 for Impairment of Assets.
I) Accounting of Derivatives
Realised Income/Losses from dealings in derivative instruments are
accounted for and the unrealised gains/losses are not considered till
the derivative agreement is not completed. Such profits/losses are
shown as exceptional items in the Profit and Loss Account.
Source : Dion Global Solutions Limited
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