Home  »  Company  »  Arshiya  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Arshiya Ltd. Company

Mar 31, 2015

(I) Basis of preparation of financial statements

The financial statements are prepared under the historical coat convention and accrual basis of accounting and In accordance with Generally Accepted Accounting Principles In India ("Indian GAAP") and are In conformity with mandatory accounting standards Issued by Institute of Chartered Accountants of India, as prescribed under the Section 133 of Companies Act, 2013 (Act) read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act (to the extent notified).

II Use of estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of financial statements and the reported amounts of revenue and expenses for the year. The rSfference between the actual results and estimates are recognised in the period in which the results are known or materialised

III) Fixed assets

(a) Tang tots Fixed Assets

* Fixed assets except Land are stated at original cost of acquisition / Installation (net of convert credit availed) less accumulated depreciation and impairment losses, if any. All costs including financing costs till commencement of commercial operations are capitalised

* Land is carried art its revalued amount being the estimated market value on the date of revaluation.

(b) Intangible Fixed Assets

Intangible assets are carried at cost less accumulated amortization. The capitalised cost of software Includes license fees, cost of Implementation and system Integration services. These costs are capitalised as Intangible assets In the year In which related software Is Implemented.

(c) Capital work-in-progress

The cost of fixed assets which are not ready for its intended use are carried at cost comprising direct cost, related incidental expenses and attributable interest.

(IV) Borrowing coals

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised till the date of commencement of commercial operations as part of cost of such assets. All other borrowing costs are charged to revenue.

(v) Depredation and Amortization

(a) Depreciation on tangible fixed assets is provided on straight-line method at the rates and manner in accordance with Schedule II to the Companies Act, 2013.

(b) Amortisation of Intangible assets other than (c) below. Is provided on a straight-line basis over a period of three to six years thorn the date of Its Implementation based on management's estimate of useful life over which economic benefits will be derived from Its use.

(e) Cost of Enterprise Resource Planning (ERP) software (Intangible asset) Including expenditure on Implementation Is amortised over a period of ton years based on managements estimate of useful life over which economic benefits will be derived from its use.

(d) Leasehold Improvements are amortized over the period of lease.

(vI) Lessee

(a) Finance lease

Assets acquired under finance lease are capitalised and the corresponding lease liability Is recognised at lower of the fair value of the leased assets and the present value of minimum lease payments at the Inception of the lease. Initial costs directly attributable to lease are recognised with the asset under lease.

(b) Operating lease

Lease of assets under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

(vii) Investments

(a) Investments intended to be held for more than a year, from the date of acquisition are classified as long term and are valued at cost Provision for diminution, If any. In the value of long term Investments Is made to recognise a decline, other than temporary.

(b) Current investments are valued at lower of cost and fair value, computed individually for each investment.

(VIll) Revenue recognition

(a) Revenue from logistic operations Is accounted on the basis of date of departure of the vesseValreraft tor jobs related to export shipments and date of arrival of the vessel/ aircraft for jobs related to import shipments, considering substantial completion of contracted services.

(b) Revenue from allotment of warehousing space and open yard area for use Is accounted on accrual basis as per agreed terms.

(c) Revenue from value added services and other activities Is recognised based on completion of agreed contracted services.

(d) Interest and other income is accounted on accrual basis except where the receipt of income is uncertain in which case It Is accounted for on receipt basis.

(e) Export benefits under Serve from India Scheme cf Foreign Trade Policy are recognised when utilized.

(lx) Employee benefits

Employee benefits Include schemes such as provident fund, Employee State Insurance, gratuity and leave encashment entitlements.

(a) Defined Contribution Plan

Contributions to defined contribution scheme such as provident fond and Employees' State Insurance are charged to the Statement of Profit and Loss as and when incurred.

(b) Defined Benefit Plan

The Liability for Leave Encashment and Gratuity is determined on actuarial basis as per the Accounting Standard - 15 "Employee Benefits* (AS-15) issued by the Institute of Chartered Accountants of India and as prescribed under Section 133 of the Companies Art, 2013 fAcf) read with the Rule 7 of the Companies (Accounts) Rules, 2014.

(x) Foreign currency transactions

(a) Transactions in foreign currencies are intially recognised at the prevailing exchange rates on the date of the transaction. Realised gains and losses on settlement of foreign currency transactions are recognised In the Statement of Profit and Loss.

(b) Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange difference Is recognised In the Statement of Profit and Loss.

(c) In respect of derivative contracts assigned to foreign currency monetary assets and HaMIttos, the difference due to change in exchange rate between the inception of derivative contracts and date of Balance Sheet and the proportionate premium/discount for the period upto the date of Balance Sheet is recognised in the Statement of Profit and Loss.

(xi) Accounting for taxes on Income

(a) Provision for Current Tact la made, based on the tax payable under the Income-tax Act, 1961.

(b) Deterred Tax Is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable tit come and accounting Income that originate In one period and are capable of reversal In one or more subsequent periods and are measured using relevant enacted tax rates. Deferred Tax assets are not Deferred Tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset tan be realised.

(c) Minimum Alternate Tax (MAT) paid In accordance with tax laws, which give rise to future economic benefits In the form of adjustment of future tax liability, Is recognUed as an asset only when, based on convincing evidence, It Is probable that the future economic benefits associated with It will flow to the Company and the assets can be measured reliably.

(Xii) Impairment of tangible and IntangMe assets

At the end of each year, the Company determines whether a provision should be made for Impairment lose on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard - 28 'Impairment of Assets" (AS-28) Issued by the Institute of Chartered Accountants of India and as presorted under Section 133 of the Companies Act, 2013 fAcf) read with Rule 7 of the Companies (Accounts) Rides, 2014.

(Xiii) Employee stock options

The Company calculates the employee stock compensation expense based on the Intrinsic value method wherein the excess of market price of underlying equity shares as on the date of the grant of options over the exercise price of the options given to employees under the Employee Stock Option Scheme, is recognised as deferred employee stock compensation expense and Is amortized over the vesting period.

(xiv) Provisions, Contingent Liabilities and Contingent Assets

(a) A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits wil be required to settle an obligation and In reaped of which a reliable estimate can be made. Provision Is not discounted and Is determined based on beet estimate required to settle the obligation at the year- end date.

(b) Contingent Liabilities are disclosed In rasped of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

(c) Contingent Assets are not recognised or disclosed in the financial statements.

(xv) Earnings per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share to computed and disclosed using the weighted average number of equity and diluted equivalent shares outstanding during the year, except when the results would be anti- dilutive.

(xvi) Cash Flew Statement

The Cash Flow Statement to prepared by the Indirect method set out In Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, Investing end financing activities of the Company.

(xvii) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.


Mar 31, 2014

1 The above Cash Flow Statement has been prepared under indirect method as set out in Accounting Standard 3 (AS 3) ''Cash Flow Statements'' as specified in Companies (Accounting Standard) Rules, 2006.

2 During the year, trade receivables of Rs.409,999,920/-(Rs. Nil) and loans and advances to subsidiaries of Rs.2,867,519,760 (Rs. 1,341,949,316/-) have been converted into Investments in equity shares and they do not form part of above cash flow statement.

3 Previous year''s figures have been regrouped/ reclassified wherever necessary to confirm to current years'' classification. As per our attached report of even date


Mar 31, 2013

A. Basis of preparation of financial statements

The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") as a going concern under the historical cost convention on an accrual basis and comply in all material aspects with accounting standards under section 211(3C), Companies (Accounting Standards) Rules, 2006, the provisions of Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI).

b. Use of estimates

The preparation of financial statements in conformity with India GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as on the date of financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognized prospectively in current and future periods.

c. Fixed assets

i) Tangible assets are stated at cost of acquisition / construction (net of cenvat credit availed) net off accumulated depreciation, amortization and impairment losses, if any, except freehold land which is carried at cost. Cost of tangible assets includes taxes, duties, freight and other incidental expenses and borrowing costs incurred upto the date of commissioning.

ii) Intangible assets acquired are measured on initial recognition at cost and carried at cost net off accumulated amortiztion and impairment loss, if any.

iii) Capital work-in-progress: Tangible assets that are not yet ready for their intended use at the reporting date are carried at cost comprising of direct cost and related incidental expenses.

d. Borrowing costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

e. Depreciation and Amortization

i) Depreciation on tangible assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

ii) Intangible assets are amortized on a straight line basis over the economic useful life as estimated by the management.

iii) Leasehold improvements are amortized over the period of lease.

f. Leases

i) Finance lease

Assets acquired under finance lease are capitalized and the corresponding lease liability is recognized at lower of the fair value of the leased assets and the present value of minimum lease payments at the inception of the lease. Initial costs directly attributable to lease are recognized with the asset under lease.

ii) Operating lease

Lease of assets under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

g. Investments

i) Investments intended to be held for more than a year, from the date of acquisition are classified as long term and are valued at cost. Provision for diminution, if any, in the value of long term investments is made to recognise a decline, other than temporary.

ii) Current investments are valued at lower of cost and fair value, computed individually for each investment.

h. Revenue recognition

i) Revenue from logistic operations is accounted on the basis of date of departure of the vessel/ aircraft for jobs related to export shipments and date of arrival of the vessel/ aircraft for jobs related to import shipments, considering substantial completion of contracted services.

ii) Revenue from allotment of warehousing space and open yard area to units is accounted on accrual basis as per agreed terms.

iii) Revenue from value added services and other activities is recognized based on completion of agreed contracted services.

iv) Interest income is accounted on time proportion basis.

v) Dividend income is recognized when the right to receive the dividend is established.

vi) Export benefits: Serve from India Scheme of EXIM Policy are recognized when utilized.

i. Employee benefits

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and loss of the year in which the related service is rendered.

b) Post-employment and other long-term benefits are recognised as an expense in the Statement of profit and loss at the present value of the amounts payable determined using actuarial valuation techniques in the year in which the employee renders services. Actuarial gains and losses are charged to the Statement of Profit and Loss.

c) Payments to defined contribution retirement benefit schemes are charged as expenses as they fall due.

j. Foreign currency transactions

a) Foreign exchange transactions are recorded at the exchange rate prevailing on the date of such transactions. Foreign currency monetary assets and liabilities are translated at the year-end exchange rates. Non-monetary items are carried at cost.

b) Gains or losses arising on settlement / translation of monetary assets and liabilities at year end rates are recognised in the Statement of Profit and Loss except treatment as per amendment to AS-11 effective till 31 March 2020 (Refer Note 39(c)).

c) In respect of derivative contracts assigned to foreign currency monetary assets and liabilities, the difference due to change in exchange rate between the inception of derivative contracts and date of Balance Sheet and the proportionate premium / discount for the period upto the date of Balance Sheet is recognised in the Statement of Profit and Loss. Profit or Loss on settlement / cancellation of derivative contracts is recognised as an income or expense for the year in which they arise except treatment as per amendment to AS-11 effective till 31 March 2020.

k. Accounting for taxes on income

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year computed as per the provisions of Income Tax Act, 1961.

ii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates.

iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognized as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

I. Impairment of tangible and intangible assets

At each balance sheet date the Company reviews the carrying values of tangible and intangible assets to determine whether there is an indication that those assets have suffered impairment loss. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset of their present value.

m. Employee stock options

The Company calculates the employee stock compensation expense based on the intrinsic value method wherein the excess of market price of underlying equity shares as on the date of the grant of options over the exercise price of the options given to employees under the Employee Stock Option Scheme, is recognized as deferred employee stock compensation expense and is amortized over the vesting period.

n. Provisions, Contingent Liabilities and Contingent Assets:

i) Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events. A provision is made when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision is not discounted and is determined based on best estimate required to settle the obligation at the year end date.

ii) Contingent Assets are not recognized or disclosed in the financial statements.

o. Earnings per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except when the results would be anti-dilutive.

p. Unamortized expenditure

Ancillary costs incurred in connection with the arrangement of borrowings are amortized over the tenure of borrowings.


Mar 31, 2012

A. Basis of preparation

The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles ( GAAP ) under the historical cost convention on an accrual basis and comply in all material aspects with accounting standards under section 211 (3C), Companies (Accounting Standards) Rules, 2006, the provisions of Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI).

b. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognized prospectively in current and future periods.

c. Tangible and Intangible Fixed Assets

i) Tangible fixed assets are stated at original cost of acquisition / installation (net of cenvat credit availed) net off accumulated depreciation, amortization and impairment losses, if any, except freehold land which is carried at cost including lease premium. Cost includes taxes, duties, freight and other incidental expenses related to the acquisition, trial run expenses (net of revenue) and borrowing costs incurred during pre-operational period.

ii) Capital work-in-progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

iii) Intangible assets acquired are measured on initial recognition at cost. Intangible assets carried at cost less accumulated amortization and impairment loss, if any.

d. Borrowing costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

e. Depreciation and Amortization

i) Depreciation on tangible fixed assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

ii) Intangible assets are amortized on a straight line basis over the economic useful life estimated by the management.

iii) Leasehold improvements are amortized over the period of lease.

f. Leases Finance lease

Assets acquired under finance lease are capitalized and the corresponding lease liability is recognized at lower of the fair value of the leased assets and the present value of minimum lease payments at the inception of the lease. Initial costs directly attributable to lease are recognized with the asset under lease.

Operating lease

Lease of assets under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

g. Investments

i) Investments intended to be held for more than a year, from the date of acquisition are classified as long term and are valued at cost. Provision for diminution, if any, in the value of long term investments is made to recognise a decline, other than temporary.

ii) Current investments are valued at lower of cost and fair value, computed individually for each investment.

h. Revenue recognition

i) Revenue from logistic operations is accounted on the basis of date of departure of the vessel/aircraft for jobs related to export shipments and date of arrival of the vessel/aircraft for jobs related to import shipments, considering substantial completion of contracted services.

ii) Revenue from allotment of warehousing space and open yard area to units is accounted on accrual basis as per agreed terms.

iii) Revenue from value added services and other activities is recognized based on completion of agreed contracted services.

iv) Interest and other income is accounted on accrual basis except where the receipt of income is uncertain in which case it is accounted for on receipt basis.

v) Dividend income is recognized when the right to receive the dividend is established.

vi) Export benefits: Serve from India Scheme of EXIM Policy are recognized when utilized.

i. Employee benefits

Employee benefits include provident fund, Employee State Insurance fund, gratuity fund and leave encashment entitlements.

i) Defined Contribution Plan

Contributions to defined contribution scheme such as provident fund and employees state insurance fund are charged to the Statement of Profit and Loss as and when incurred.

ii) Defined Benefit Plan

The Company has a defined benefit plan comprising of gratuity fund. The liability for the defined benefit plan is provided on the basis of an actuarial valuation carried out by an independent actuary as at the Balance Sheet date.

Actuarial gains and losses in respect of post employment and other long term benefits are recognized in the Statement of Profit and Loss.

iii) Other Employee Benefits

Liability for leave encashment entitlements is provided on the basis of independent actuarial valuation.

j. Foreign currency transactions

i) Transactions in foreign currencies are recognised at the exchange rates prevailing on the date of the transaction. Realised gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

ii) Foreign currency monetary assets and liabilities at the year end are translated at the year-end exchange rates and the resultant exchange difference is recognized in the Statement of Profit and Loss except treatment as per amendment to AS -11 effective till March 31, 2020 (Refer Note 39(c)).

iii) Non-monetary foreign currency items are carried at cost and accordingly the investments in shares of foreign subsidiaries are expressed in Indian currency at the rate of exchange prevailing at the time when the original investments are made.

k. Accounting for Taxes on Income

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year computed as per the provisions of Income Tax Act, 1961.

ii) Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates.

iii) Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognized as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

I. Impairment of tangible and intangible assets

At each balance sheet date the Company reviews the carrying values of tangible and intangible assets to determine whether there is an indication that those assets have suffered impairment loss. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount, is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

m. Employee stock options

The Company calculates the employee stock compensation expense based on the intrinsic value method wherein the excess of market price of underlying equity shares as on the date of the grant of options over the exercise price of the options given to employees under the Employee Stock Option Scheme, is recognized as deferred employee stock compensation expense and is amortized over the vesting period.

n. Provisions, Contingent Liabilities and Contingent Assets

i) Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events. A provision is made when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision is not discounted and is determined based on best estimate required to settle the obligation at the year end date.

ii) Contingent Assets are not recognized or disclosed in the financial statements,

o. Earnings per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except when the results would be anti-dilutive.

p. Unamortized expenditure

Ancillary costs incurred in connection with the arrangement of borrowings are amortized over the tenure of borrowings


Mar 31, 2010

A. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ("GAAP") under the historical cost convention on an accrual basis and are in conformity with mandatory accounting standards, as specified in the Companies (Accounting Standards) Rules, 2006, the provisions of Companies Act 1956 and guidelines issued by Securities and Exchange Board of India (SEBI).

b. Use of estimates

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as at the date of financial statements and the reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results could differ from these estimates.

c. Fixed assets

Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairments, if any. Cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation and borrowing cost incurred during pre-operative period for construction of qualifying asset.

Capital work-in-progress comprises pre-operative expenses pending capitalization/allocation, advances paid to acquire fixed assets and cost of fixed assets that are not yet ready for their intended use as at the year end.

d. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

e. Depreciation and amortsation

(i) Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

(ii) Leasehold improvements are amortised over the primary period of the lease.

f. Leases Finance lease

Assets taken on finance lease are accounted for as fixed assets at the lower of the fair value or the present value of minimum lease payments at the inception of the lease. Lease payments are apportioned between finance charge and reduction of outstanding liability.

Operating lease

Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

g. Investments

(i) Long term investments are valued at cost. Provision for diminution, if any, in the value of investments is made to recognise a decline, other than temporary.

(ii) Current investments are valued at lower of cost and fair value, computed individually for each investment. In case of investments in mutual funds which are unquoted, net asset value is taken as fair value.

h. Revenue recognition

(i) Revenue from logistic operations is accounted on the basis of date of departure of the vessel/aircraft for jobs related to export shipments and date of arrival of the vessel/aircraft for jobs related to import shipments, considering substantial completion of contracted services.

(ii) Interest and other income are accounted for on accrual basis except where the receipt of income is uncertain in which case it is accounted for on receipt basis.

i. Employee benefits

(i) Provident fund - Contributions to defined contribution scheme such as provident fund are charged to the Profit and Loss Account as incurred. The Company contributes to State Plans namely Employees State Insurance Fund which is also charged to the Profit and Loss Account.

(ii) Gratuity - The Company has defined benefit plan comprising of gratuity. The Company contributes to the gratuity plan which is administered by Life Insurance Corporation of India. The liability for the gratuity fund is determined on the basis of an independent actuarial valuation done at the year end.

(iii) Leave encashment - The Company liability for leave encashment entitlements is provided on the basis of independent actuarial valuation.

j. Foreign currency transactions

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Profit and Loss Account.

Foreign currency monetary assets and liabilities at the year end are translated at the year end exchange rates and the resultant exchange difference is recognised in the Profit and Loss Account.

Non-monetary foreign currency items are carried at cost/fair value and accordingly the investments in shares of foreign subsidiaries are expressed in Indian currency at the rate of exchange prevailing at the time when the original investments are made or fair values determined.

k. Accounting for taxes on income

(i) Provision for current tax is made, based on the tax payable under the Income-tax Act, 1961.

(ii) Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax depreciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation.

1. Impairment

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

m. Employee stock options

The Company calculates the employee stock compensation expense based on the intrinsic value method wherein the excess of market price of underlying equity shares as on the date of the grant of options over the exercise price of the options given to employees under the Employee Stock Option Scheme of the Company, is recognised as deferred stock compensation expense and is amortised over the vesting period.

n. Contingent Liabilities

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company. A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision is not discounted and is determined based on best estimate required to settle the obligation at the year end date. Contingent Assets are not recognized or disclosed in the financial statements.

o. Earnings per share

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Dilutive earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

 
Subscribe now to get personal finance updates in your inbox!