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22.85 (2%)| Accounting Policy | Year : Mar '11 | ||||
a) 15,238 Equity Shares of Rs. 100 each (since converted into 1,52,380 equity shares of Rs.10 each) were allotted as fully paid up pursuant to the Amalgamation Order (1966) under Sector/396 of the Companies Act,1956. b) 75,000 Equity Shares of Rs. 100 each (since converted Into 7,50,000 equity shares of Rs. 10 each) were allotted as fully paid up in consideration for transfer of ownership of some properties. c) 1,82,50,000 Equity Shares of Rs. 10 each fully paid have been allotted during the financial year 2009-10 to the President of India at premium of Rs. 30 per equity share. 1) Accounting Convention The Financial Statements are prepared under the historical cost convention and comply in all material aspects with generally accepted accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. 2) Use of Estimates The preparation of Financial Statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions in respect of certain items that affect the reported amounts of assets and liabilities as at the date of the financial statements and the reported amount of income and expenses during the ''repeating period. Actual results/outcome could differ from estimates. Any revision in accounting estimates is recognized prospectively in the period in which such results do materialize. 3) Dispute Income Tax and Sales Tax Demand The disputed Income Tax and Sales Tax demands in respect of assessments completed and against which appeals have been filed are disclosed by way of contingent liability and are charged to accounts in the year of settlement. 4) Fixed Assets and Depreciation a) Fixed Assets i) Fixed assets are valued at cost of acquisition, net of ''Grant in aid'' where applicable. ii) Fixed Assets retired from active use and held for disposal are stated at the lower of book value and/or net realizable value and are shown separately in the financial statements. Loss determined, if any, is recognized in the profit and loss statement iii) In cases where receipts/scrutiny of final bills of the contractors/suppliers, settlement of the rates to be paid for extra items and price escalation etc. are pending, the capitalization is effected provisionally, based on value work completed as certified by Project Engineers. Difference, if any, Is proposed to be accounted for in the year in which the final bills are settled. iv) Intangible Assets (Software) are stated at their cost of acquisition. b) Depreciation Depreciation on fixed assets is provided pro-rata, on Straight Line Method on the following rates: i) On fixed assets existing as on 31.3.1987, at the rates already adopted in earlier years. ii) On addition in the Fixed Assets during the period from 01.04.1987 to 15.12.1993, at the pre-revised rates as per the schedule XIV of the Companies Act, 1956. iii) On additions made to fixed assets from 16.12.1993 onwards, as per revised rates prescribed in schedule XIV of the Companies Act, 1956. iv) On Intangible Assets (Software), cost is amortized over a period of legal right to use or 3 years, whichever is earlier. The rates at which depreciation has been charged are given in annexure A. 5) Investments Long term investments are stated at cost. Provision for diminution in value of each investment, if any, is made, to recognize the decline, other than of temporary nature. 6) Valuation of Inventories Stocks and stores including stock of crockery, cutlery, glassware and linen etc., in hand as well as in circulation are valued at cost on FIFO basis or realizable value whichever is less. 7) Execution of Projects for Clients i) Value of work done in respect of projects executed including cost plus/deposit/ turnkey/project management work are shown in the accounts at best estimates by the management after deduction for likely rejections, if any, by the client. ii) Indirect costs are treated as period costs and are charged to profit and loss account in the year of incurrence. 8) Deferred revenue Expenditure Payment of compensation to employees retiring under Voluntary Retirement Scheme Is treated as deferred revenue expenditure and written off over a period ending 31.3.2010. 9) Provision. Contingent Liabilities and Contingent Assets i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of sources. ii) Where as a result of past events, there is a possible obligation that may, but probably will not, require any outflow of resources, no provision is recognized but appropriate disclosure is made in the notes. iii) Contingent assets are neither recognized nor disclosed in the financial statements. 10) Employees Benefits A) Provident Fund Company''s contributions to Provident Fund are charged to Profit & Loss account. B) Gratuity i) Provision for Gratuity Is made on the basis of Actuarial Valuation. ii) Contribution towards Gratuity scheme is based on the premium contribution called for by the Life Insurance Corporation of India (LIC) with whom the Company has entered into an agreement. As per the terms of its scheme, LIC settles the claim for the full value of the gratuity paid by the Company to its employees, as and when such a payment is made. C) Leave Encashment The provision for leave encashment is made on the basis of actuarial valuation. 11) Deferred Taxation i) Deferred tax is provided during the year, using the liability method on all temporary differences at the Balance sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes in accordance with the Accounting Standard (AS-22). iii) Deferred Tax Asset is recognized, subject to consideration of prudence, only to the extent that there is reasonable certainty that sufficient taxable profits will be available against which such Deferred Tax Assets can be realized. In situations where the company has any unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there Is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. iii) Deferred Tax Assets and Liabilities are measured at the rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the balance sheet date. 12) Government Grant i) The Government grant received for up gradation of properties is recognized as income from the year in which respective properties are upgraded and to the extent grant related costs incurred i.e. written off as depreciation, revenue expenditure each year. ii) The balance of Government Grant to the extent not adjusted as at the close of the year, is carried in the financial statements as ''Deferred Government Grant'' after ''Reserves & Surplus.'' 13) Revenue Recognition i) Income from Projects is recognized on the percentage of completion method including in respect of cost plus/deposit/turnkey/project management work. In terms of this method, revenue is recognized in proportion to the actual costs incurred as against the total estimated cost of project under execution. The determination of revenues under this method involves making estimates, some of which are of technical nature, concerning, where relevant, the percentages of completion, costs of completion (including cost of rejection), expected revenues etc. ii) Income from services rendered in respect of projects /license fees/Management fee are accounted for (exclusive of service tax) as per terms of the agreement. However, where such service charges/fees are not realised in cash for significant period the accrual thereof is postponed to be accounted for on receipt. iii) Revenue from sales (net of returns and discounts) is recognized on transfer of substantial risks and rewards to the customers. Sales tax and value added tax are excluded. iv) Interest income, other than management fees income/interest on loans and advances from subsidiary companies which are accounted for on receipt basis or on receipt of Tax deduction certificate because of liquidity problem in those companies referred to in (ii) above, and income from investments are accounted for on accrual basis at the contracted rates and/or at the time of establishment of right to receive respectively. i v) Interest/Damages on overdue amounts recoverable from licensees are accounted for on realization basis. 14) Foreign Currency Transactions a) Transactions in foreign exchange: i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. ii) Conversion Foreign currency monetary Items are reported using the closing rate Non-monetary Items that are carried in terms of historical cost denominated In a foreign currency are reported using the exchange rate at the date of the transaction. iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on recording/ reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arises. Exchange differences on liabilities relating to fixed assets acquired from outside India are added to the cost of such assets. b) Money changing business i) The transactions concluded during the period are recorded based on the actual rate realize. ii) Foreign currency'' balances as at close of the year are converted at the year end rates. iii) Income from money changing business as reflected in the accounts is net of cost of sale of currency. 15. Borrowing Cost i) Borrowing Costs if any, that are directly attributable to the acquisition/construction of qualifying assets are capitalized as part of the cost of the respective assets. ii) Other borrowing costs are expensed in the year in which they are incurred. 16. Prior Period/Extraordinary Items i) All prior period items which are material and which arise in the current period as a result of ''errors or omissions'' in the preparation of prior period''s financial statements are separately disclosed in the current Statement of Profit & Loss. However differences in actual income/expenditure arising out of over or under estimation'' in prior period are not treated as prior period income/expenditure. ii) All extraordinary items, i.e. gains or losses which arise from events or transactions which are distinct from the ordinary activities of the company and which are material are separately disclosed in the statement of accounts. 17. Claims Supplementary claims including insurance claims are accounting for on acceptance/receipt basis. |
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| Source : Dion Global Solutions Limited | |||||
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