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1.5 (1.14%)
-1.6 (-1.22%) | Accounting Policy | Year : Mar '12 | ||||
a) Accounting Concept: The Financial Statements are prepared under the historical cost convention. Accounting Policies not referred to otherwise are consistent with Generally Accepted Accounting Principles and comply with the applicable Accounting Standards. b) Recognition of Income & Expenditure: The Company follows Mercantile System of Accounting and recognizes Income and Expenditure on accrual basis. However, since it is not possible to ascertain with reasonable accuracy, the quantum to be provided in respect of Warranty and Liquidated Damages, Works Contract Tax, Marketing Commission, Bill Discounting Charges, Insurance Claims, Export Benefits, the same are accounted for on cash basis. c) Sales: The Company recognizes revenue for supply contracts on the basis of bills raised against supplies and for erection & construction contracts on reaching reasonable stage of completion of respective contracts. However, certain escalation and other claims, which are not ascertainable/acknowledged by the customers are not taken into account. Revenue from sale of Energy (Power) is recognized on the basis of electrical units generated, net of wheeling and transmission loss as applicable, as stated in the Power Purchase Agreement entered into between the Company and the respective State Utilities . d) Borrowing Costs: Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. e) Earnings Per Share: Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. f) Fixed Assets: Fixed Assets are stated at their original cost, less accumulated depreciation. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Capital work-in-progress comprises of cost of fixed assets that are not yet ready for their intended use as at the Balance Sheet date. Depreciation is calculated at the rates specified in Schedule XIV to the Companies Act, 1956 and is provided for on Straight Line Method on all assets except Office Equipments, Furniture & Fixtures which is provided for on Written Down Value Method. Leasehold Land is amortized over the period of lease and the amortization amount included under Depreciation. g) Impairment of Assets: Impairment loss is recognized, where applicable, when the carrying value of the Fixed Assets of a cash generating unit exceeds its market value or value in use, whichever is higher. h) Investments: Long term investments are carried at cost less provision for diminution other than temporary, in value of such investments determined individually. Current investments are carried at lower of cost or fair value determined individually. i) Inventories: Contract work-in-progress is stated at cost or market value whichever is lower. However, materials purchased are charged to Statement of Profit and Loss as and when purchased. Process Stock is valued at cost or net realizable value, whichever is lower. j) Foreign Currency Transactions: Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transactions. Exchange differences, arising on reporting of short term foreign currency monetary items at rates different from those at which they were initially recorded , are recognized in the Statement of Profit and Loss. In respect of long term foreign currency monetary items, the Company has availed the option to adjust the cost of the asset towards the exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded, in so far as they relate to depreciable capital asset and depreciating the same over the balance life of asset. k) Employee Benefits: Contributions to defined contribution scheme in the form of provident and other funds are charged to the Statement of Profit and Loss. In respect of certain employees, provident fund contributions are made to a Trust, administered by the trustees. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and short fall, if any, shall be made good by the Company. The remaining contributions are made to a Government-administered Provident Fund towards which the Company has no further obligations beyond its monthly contribution. The Company has defined benefit plan for post-employment benefit in the form of gratuity for all employees, which are controlled by a Trust, administered by the Trustees. Liability for above defined benefit plan is provided on the basis of actuarial valuation as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit method. In respect of compensated absences benefits to employees, liability is provided for on the basis of actuarial valuation as at the the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit method. l) Taxation: Current tax is determined on the basis of the amount payable for the year under Income Tax Act. Deferred tax is calculated at current / substantively enacted income tax rate and is recognized on timing differences between taxable income and accounting income. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The Company''s business units, engaged in generation of electricity from Wind Mills at various locations, are eligible for 100% tax holiday for a period of 10 consecutive years out of 15 years, from the year in which the generation of power is started. Timing difference between the tax basis and the carrying values of assets and liabilities of the Units, which originate during the year but reverse during the tax holiday period are not recognized in the year in accordance with the requirements of Accounting Standard - 22: Accounting for Taxes of Income. m) Segment Reporting The Accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue and expenses are directly attributable to the segment. Revenue and expenses like dividend, interest, profit/loss on sale of assets and investments etc., which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have not been included therein. All segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, sundry debtors, loans and advances and operating cash and bank balances. Segment assets and liabilities do not include investments, miscellaneous expenditure not written off, share capital, reserves and surplus, unpaid dividend, deferred tax liability, provision for tax and proposed dividend. n) Provisions, Contingent Liabilities and Contingent Assets: A provision is recognized 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 are not discounted to their present value and are determined based on 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 by way of notes to the accounts. Contingent assets are not recognized. |
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| Source : Dion Global Solutions Limited | |||||
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