SENSEX NIFTY India | Accounting Policy > Computers - Software Medium & Small > Accounting Policy followed by Kernex Microsystems (India) - BSE: 532686, NSE: KERNEX

Kernex Microsystems (India)

BSE: 532686|NSE: KERNEX|ISIN: INE202H01019|SECTOR: Computers - Software Medium & Small
Feb 27, 16:00
-0.7 (-1.73%)
VOLUME 35,439
Feb 27, 15:27
-1.2 (-2.93%)
VOLUME 110,893
« Mar 14
Accounting Policy Year : Mar '15
 1.1 Basis of accounting and preparation of financial statements
 The financial statements of the Company have been prepared in
 accordance with the Generally Accepted Accounting Principles in India
 (Indian GAAP) to comply with the Accounting Standards notified under
 the Companies (Accounting Standards) Rules, 2014 (as amended) and the
 relevant provisions of the Companies Act, 2013. The financial
 statements have been prepared on accrual basis under the historical
 cost convention.The accounting policies adopted in the preparation of
 the financial statements are consistent with those followed in the
 previous year unless otherwise stated.
 1.2 Use of estimates
 The preparation of the financial statements in conformity with Indian
 GAAP requires the Management to make estimates and assumptions
 considered in the reported amounts of assets and liabilities (including
 contingent liabilities) and the reported income and expenses during the
 year. The Management believes that the estimates used in preparation of
 the financial statements are prudent and reasonable. Future results
 could differ due to these estimates and the differences between the
 actual results and the estimates are recognised in the periods in which
 the results are known/materialise.
 1.3 Inventories
 Inventories of components are valued at cost or realisable value
 whichever is less. Work in Progress is valued at cost of materials and
 services used.
 1.4 Cash and cash equivalents
 1.4 Cash comprises cash on hand and demand deposits with banks. Cash
 equivalents are short-term balances (with an original maturity of three
 months or less from the date of acquisition), highly liquid investments
 that are readily convertible into known amounts of cash and which are
 subject to insignificant risk of changes in value.
 1.5 Cash flow statement
 Cash flows are reported using the indirect method, whereby profit /
 (loss) before extraordinary items and tax is adjusted for the effects
 of transactions of non-cash nature and any deferrals or accruals of
 past or future cash receipts or payments. The cash flows from
 operating, investing and financing activities of the Company are
 segregated based on the available information.
 1.6 Depreciation
 Depreciation has been provided on the fixed assets on WDV method as per
 the rates prescribed in Schedule II to the Companies Act, 2013.
 1.7 Revenue recognition
 Revenue from contracts
 Revenue from contracts priced on a time and material basis are
 recognised when services are rendered and related costs are incurred.
 Revenue from services
 Service income is recognised as per the terms of contracts with the
 customer, when the related service is performed.
 Sale of goods
 Revenue from the product sales is exclusive of returns, and applicable
 trade discounts but inclusive of duties and taxes collected on the
 1.8 Other income Initial recognition
 Transactions in foreign currencies entered into by the Company and its
 integral foreign operations are accounted at the exchange rates
 prevailing on the date of the transaction or at rates that closely
 approximate the rate at the date of the transaction.
 Measurement of foreign currency monetary items at the Balance Sheet
 Foreign currency monetary items of the Company and its net investment
 in non-integral foreign operations outstanding at the Balance Sheet
 date are restated at the year-end rates.
 Treatment of exchange differences
 Exchange differences arising on settlement / restatement of short-term
 foreign currency monetary assets and liabilities of the Company are
 recognised as income or expense in the Statement of Profit and Loss.
 1.9 Investments
 Long-term investments in Subsidiary (100% wholly owned Subsidiary) are
 carried at cost.
 1.10 Employee benefits Defined contribution plans
 In respect of retirement benefits in the form of provident fund, the
 contribution payable by the company for a year is charged to the Profit
 and Loss account.
 Defined benefit plans
 Gratuity: Gratuity benefit is applicable to all the permanent and full
 time employees of the company.  Gratuity paid out is based on last
 drawn basic salary and DA at the time of termination or retirement.
 The scheme takes into account each completed year of service or part
 there of in excess of 6 months.  Annual Contribution to the
 employee''s Gratuity fund, Established with LIC of India(LIC) are
 determined based on an actuarial valuation made by the LIC as at the
 year end.
 Short-term employee benefits
 The Company does not have any scheme for Leave encashment in place.
 1.11 Segment reporting
 Since the Company has no Reportable segment to report, Segment
 Reporting under Accounting Standard - 17 Issued by
 Institute of Chartered Accountants of India (ICAI) is not
 1.12 Earnings per share
 Basic earnings per share is computed by dividing the profit/(loss)
 after tax (including the post tax effect of extraordinary items, if
 any) by the weighted average number of equity shares outstanding during
 the year. Diluted earnings per share is computed by dividing the profit
 / (loss) after tax (including the post tax effect of extraordinary
 items, if any) as adjusted for dividend, interest and other charges to
 expense or income relating to the dilutive potential equity shares, by
 the weighted average number of equity shares considered for deriving
 basic earnings per share and the weighted average number of equity
 shares which could have been issued on the conversion of all dilutive
 potential equity shares.
 1.13 Taxes on income
 Current tax is the amount of tax payable on the taxable income for the
 year as determined in accordance with the provisions of the Income Tax
 Act, 1961.Minimum Alternate Tax (MAT) paid in accordance with the tax
 laws, which gives future economic benefits in the form of adjustment to
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal income tax.
 Accordingly, MAT is recognised as an asset in the Balance Sheet when it
 is probable that future economic benefit associated with it will flow
 to the Company.Deferred tax is recognised on timing differences, being
 the differences between the taxable income and the accounting income
 that originate in one period and are capable of reversal in one or more
 subsequent periods. Deferred tax is measured using the tax rates and
 the tax laws enacted or substantially enacted as at the reporting date.
 Deferred tax liabilities are recognised for all timing differences.
 Deferred tax assets in respect of unabsorbed depreciation and carry
 forward of losses are recognised only if there is virtual certainty
 that there will be sufficient future taxable income available to
 realise such assets. Deferred tax assets are recognised for timing
 differences of other items only to the extent that reasonable certainty
 exists that sufficient future taxable income will be available against
 which these can be realised. Deferred tax assets and liabilities are
 offset if such items relate to taxes on income levied by the same
 governing tax laws and the Company has a legally enforceable right for
 such set off. Deferred tax assets are reviewed at each Balance Sheet
 date for their realisability.
 1.14 Provisions and contingencies
 A provision is recognised when the Company has a present obligation as
 a result of past events and it is probable that an outflow of resources
 will be required to settle the obligation in respect of which a
 reliable estimate can be made. Provisions (excluding retirement
 benefits) are not discounted to their present value and are determined
 based on the best estimate required to settle the obligation at the
 Balance Sheet date. These are reviewed at each Balance Sheet date and
 adjusted to reflect the current best estimates. Contingent liabilities
 are disclosed in the Notes.
Source : Dion Global Solutions Limited
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