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Moneycontrol.com India | Accounting Policy > Engineering > Accounting Policy followed by NEPC India - BSE: 500301, NSE: NEPCMICON
NEPC India
BSE: 500301|NSE: NEPCMICON|ISIN: INE588A01016|SECTOR: Engineering
Apr 17, 17:00
-0.03 (-0.97%)
VOLUME 10,750
Apr 17, 17:00
VOLUME 17,034
Mar 12
Accounting Policy Year : Mar '13
1.  Accounting Convention
 a) The Financial Statements have been prepared under Historical Cost
 Convention on going concern basis and in accordance with the provisions
 of the Companies Act, 1956 and comply with the Accounting Standards
 issued by the Institute of Chartered Accountants of India, to the
 extent applicable to the Company.
 b) The Company generally follows mercantile system of accounting and
 recognises income and expenditure on accrual basis except in respect of
 the insurance claims, Interest on overdue debts, discounts & rebates,
 dividend received and gratuity payments, leave encashment which are
 consistently accounted for on cash basis.
 2.  Fixed Assets
 Fixed assets are stated at cost less accumulated depreciation. Cost
 comprises of capital costs and incidental expenses attributable to
 bringing the asset to working condition for its intended use. Fixed
 assets acquired under finance lease are accounted as per the Accounting
 Standard -19 Leases issued by The Institute of Chartered Accountants of
 India. Borrowing costs directly attributable to acquisition or
 construction of those fixed assets which necessarily take a substantial
 period of time to get ready for their intended use are capitalised.
 3.  Depreciation:
 Depreciation on fixed assets on Written Down Value Method at the rates
 prescribed under the Income Tax Act 1961 mentioned here below:
 4.  Investments: Long Term:
 Long-term investments are carried at cost of acquisition. Provision is
 made only when in management''s opinion there is a decline, in the
 carrying value of such investments.
 5.  Borrowing Costs:
 Borrowing costs attributable to the acquisition or construction of
 assets are capitalised as part of cost of such asset up to the date
 when such asset is ready for its intended use. Other borrowing costs
 are charged to revenue.
 6.  Revenue Recognition:
 Sales of materials & spares:
 The revenue in respect of sales of materials & spares is accounted for
 on dispatch of goods to the customers.
 7 Inventories
 Inventories of raw material, consumables and work in progress are
 valued at lower of the cost or estimated net realisable value. The
 Company consistently follows the policy of not recognising as inventory
 the goods in transit until the goods are tested and accepted. Cost of
 work-in- progress includes conversion and other costs incurred in
 bringing the inventories to their present location and condition.
 Obsolete, defective and unserviceable stocks are duly provided for.
 8.  Foreign Currency Transactions
 a) Transactions in foreign currency are recorded at the rates of
 exchange in force at the time of occurrence of the transactions.
 b) Assets and outstanding liabilities in foreign currency at the period
 end are stated at the rates of exchange prevailing at the close of the
 period and resultant gains/losses are adjusted to:
 i) Carrying cost of fixed assets, if they relate to fixed assets and
 ii) Profit and Loss Account in other case.
 9.  Taxation:
 Income-tax expense comprises current tax expense, fringe benefit tax
 and deferred tax expense or credit
 9.1 Current tax provision, as per the Income tax Act, 1961, is made
 based on the tax liability computed after considering tax allowances
 and exemptions at the Balance sheet date.
 9.2 Deferred tax liability or asset is recognized for timing
 differences between the profits/losses offered for income taxes and
 profits/losses as per the financial statements. Deferred tax assets and
 liabilities are measured using the tax rates and tax laws that have
 been enacted or substantively enacted at the Balance sheet date.
 Deferred tax assets are recognised only to the extent there is
 reasonable certainty that the assets can be realized in future;
 however, where there is unabsorbed depreciation or carried forward loss
 under taxation laws, deferred tax assets are recognised only if there
 is a virtual certainty of realisation of such assets. Deferred tax
 assets are reviewed as at each Balance sheet date and written down or
 written up to reflect the amount that is reasonably/virtually certain
 to be realized. (Also refer Note II.ll.l)
 10.  Retirement Benefits:
 Eligible employees receive benefits from a provident fund, which is a
 defined contribution scheme.  Both, the employees and the Company make
 monthly contributions to this scheme equal to a specified percentage of
 the covered employee''s salary. Contributions to provident fund are made
 to the Government administered provident fund schemes and charged to
 the Profit and loss account. The Company has no further obligations
 under the provident fund plan beyond its monthly contributions.
 Gratuity benefits, which are defined benefits, provide a lump sum
 payment to vested employees at retirement, death, incapacitation or
 termination of employment, of an amount based on the respective
 employee''s last drawn salary and the tenure of employment Liabilities
 with regard to gratuity benefits are accounted on actual payment basis.
 Leave encashment benefits as per Company''s rules are accounted for on
 actual payment basis.
 11.  Research and Development Expenditure:
 Revenue expenditure on Research and Development is charged to the
 Profit and Loss Account in the year in which it is incurred.
 12.  Earnings per share
 In determining earnings per share, the Company considers the net profit
 after tax and includes the post tax effect of any extraordinary items.
 The number of shares used in computing basic earnings per share is the
 weighted average number of shares outstanding during the period. The
 number of shares used in computing diluted earnings per share comprises
 the weighted average shares considered for deriving basic earnings per
 share and also the weighted average number of Equity Shares, which have
 been subsequently allotted against share application money.
 13.  Contingencies
 Contingencies arising from claims, litigation, assessment, fines,
 penalties, etc are recorded when it is probable that a liability has
 been incurred and the amount can be reasonably estimated.  However the
 contingent Liabilities are disclosed by way of notes.
Source : Dion Global Solutions Limited
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