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-2.7 (-0.24%)
-8.05 (-0.73%) | Accounting Policy | Year : Mar '12 | ||||
1 ACCOUNTING CONVENTION: The Financial Statements are prepared under the historical cost convention on accrual basis and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The said financial statements comply with the relevant provisions of the Companies Act ,1956 (the Act) and the mandatory Accounting Standards notified by the Central Government of India under the Companies (Accounting Standards) Rules 2006, to the extent applicable. 2 USE OF ESTIMATES The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Differences, if any, between the actual results and the estimates are recognised in the period in which the results are known/materialised. 3 FIXED ASSETS, DEPRECIATION AND AMORTISATION: a) Fixed assets are stated at original cost (net of CENVAT/VAT wherever applicable) including expenses related to acquisition and installation. Borrowing costs are capitalized as part of qualifying fixed assets when it is possible that they will result in future economic benefits. Other borrowing costs are expensed. b) Capital work in progress is stated at the amount expended up to the balance sheet date. c) Capital Subsidy relating to projects in backward area is credited to capital subsidy reserve on receipt and Government grants relating to specific assets are deducted from the cost of such assets. d) Depreciation is provided, on all depreciable assets, except intangible assets, on a straight line basis at the rates prescribed under Schedule XIV of the Companies Act, 1956 . Depreciation on assets added/ disposed off during the year is provided on pro-rata basis from the month of addition or up to the month prior to the month of disposal, as applicable. e) Intangible Assets are amortized over a period of 5 years or based on the period of usage/licence, whichever is lower. f) Individual assets costing less than Rs.5,000 each are depreciated in full in the year of acquisition. 4 IMPAIRMENT OF ASSETS: At each balance sheet date, the carrying values of the tangible and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where there is an indication that there is a likely impairment loss for a group of assets, the Company estimates the recoverable amount of the group of assets as a whole, and the impairment loss is recognised. 5 INVESTMENTS: Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investments and are carried at cost. However, provision for diminution is made in the value of investments, if such diminution is other than of temporary nature . Current investments are stated at lower of cost or fair value. 6 INVENTORIES: a) Finished Goods and work-in-progress are valued at lower of cost and net realizable value. Cost comprises of materials, labour, and an appropriate proportion of production overheads and excludes interest, selling and distribution expenses. Material cost is computed on weighted average basis. b) Raw materials, stores and spares are valued at lower of cost and net realizable value. Cost computed on weighted average basis includes freight .taxes and duties net of CENVAT/VAT credit, wherever applicable. 7 REVENUE RECOGNITION: a) Revenues are recognized and expenses are accounted on their accrual with necessary provisions for all known liabilities and losses. Revenue from Sale of goods are recognised on despatch of goods. Sales are accounted net of sales tax / VAT, discounts and returns as applicable. b) Revenue from rendering of services is recognised on completion of services, as per the terms of contracts with customers. c) Export Benefits under Advance licence scheme are recognized on accrual basis on completion of export obligation. d) Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognised on a time proportion basis considering the underlying interest rate. 8 EMPLOYEE BENEFITS: SHORTTERM EMPLOYEE BENEFITS Short term employee benefits including performance incentive and compensated absences which are expected to occur within 12 months after the end of the period in which the employee renders related service are determined as per Company''s policy and recognized as expense based on expected obligation on undiscounted basis. LONG TERM COMPENSATED ABSENCES Accumulated Compensated absences which fall due beyond 12 months is provided for in the books on actuarial basis at the year end using projected unit credit method. DEFINED CONTRIBUTION PLANS Superannuation fund. Provident fund and Pension fund are defined contribution plans towards which the company makes contribution at predetermined rates to the Superannuation Trust, and the Regional Provident Fund Commissioner respectively. The same is debited to the Statement of Profit and Loss on an accrual basis. The Company also makes contributions to state plans namely Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and has no further obligation beyond making the payment to them. DEFINED BENEFIT PLAN The liability for gratuity to employees as at the Balance sheet date is determined on the basis of actuarial valuation using Projected Unit Credit method. The amount is funded to a Gratuity fund administered by the trustees and managed by Life Insurance Corporation of India. The liability thereof is paid and absorbed in the profit and loss account at the year end. Actuarial Gains and losses arising during the year are recognised in the Statement of Profit and Loss immediately. Termination benefits are recognized as an expense as and when incurred. 9 INCOME TAX: Income tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized subject to management''s judgment that realization is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the timing differences are expected to be received or settled. The effect on deferred tax assets and liabilities arising from change in tax rates is recognized in the income statement in the period of enactment of the change. 10 FOREIGN CURRENCY TRANSACTIONS: Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions . Monetary assets and liabilities outstanding at the year end are translated at the rate of exchange prevailing at the year end and the gain or loss is recognized in the Statement of Profit and Loss. Exchange differences arising on actual payments/ realizations and year end restatements are also recognised in the statement of profit and loss. 11 RESEARCH AND DEVELOPMENT: Revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure on Research and Development is included in fixed assets and depreciated in accordance with the depreciation policy of the company. 12 PROVISIONS AND CONTINGENT LIABILITIES: A provision is recognized when an enterprise has a present obligation as a result of past event, that can be estimated reliably 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 its 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. When no reliable estimate can be made, a disclosure is made as contingent liability and is disclosed by way of notes to accounts. 13 SEGMENT REPORTING: The accounting policies adopted for segment reporting are in line with the accounting policies of the Company with the following additional policies: a) Inter-segment revenues are accounted on the basis of prices charged to external customers. b) Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and not allocable to segments on a reasonable basis are included under Other un-allocable Expenditure net of un- allocable income. 14 EARNINGS/(LOSS) PER SHARE: The basic earnings/ (loss) per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. 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 that could have been issued on the conversion of all dilutive potential equity shares. 15 CASH FLOW STATEMENT The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash flows from operating activities 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. Note 2 (iii) Rights, Preferences and Restrictions attached to shares The Company has only one class of equity shares with voting rights (one vote per share). The dividends proposed by the Board of directors is subject to approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the equity shareholders are entitled to receive only the residual assets of the Company. The distribution of dividend are in the proportion to the number of equity shares held by the shareholders. NOTE (a) Principal amount payable to Micro and Small Enterprises (to the extent identified by the company from available information and relied upon by the auditors) as at 31st March, 2012 is Rs.29.85 lacs (Previous year - Rs 36.84 lacs) (b) There are no dues to Micro and Small Enterprises as per The Micro, Small and Medium Enterprises Development Act 2006 which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors. Note The unclaimed dividend of Rs. 24.09 lacs represents those relating to the years 2005 to 2011 and no part thereof has remained unpaid or unclaimed for a period of seven years from the date they became due for payment requiring transfer to the Investor Education and Protection Fund. Note: In the previous year, dividend income from subsidiary was recognised as income based on such declaration by the subsidiary company even though the same was declared after the balance sheet date as per requirements of old schedule VI. In the current year, such dividend income is recognised only when the right to receive the same on or before the balance sheet date is established. This method of recognition has resulted in a change in accounting policy. However, there is no impact on the current year profits on account of such change. |
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| Source : Dion Global Solutions Limited | |||||
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