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Accounting Policies of Integra Engineering India Ltd. Company

Dec 31, 2012

1. Basis of Preparation of Financial Statements:

The financial statements are prepared as per historical cost convention and in accordance with the generally accepted accounting principles in India. The applicable mandatory Accounting Standard notified under the Companies (Accounting Standards) Rules, 2006 and requirements of the Companies Act, 1956 of India have been followed in preparation of these financial statements.

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. Differences between the actual results and the estimates are recognized in the period in which the same are known /materialized.

3. Revenue Recognition:

(i) Sales:

Revenue from sale of goods is recognised when the significant risks and rewards in respect of ownership of products are transferred by the Company. Sales are stated net of sales returns, excise duty, sales tax and applicable trade discounts and allowances.

Revenues on long term contracts are recognised based on "percentage of completion method". The stage of completion is determined based on the proportion that contract costs incurred for work performed up to the year end bear to the estimated total contract costs. The total contract costs are determined based on technical and other estimates and the expected loss is provided for. The contract revenue recognised in excess of contract billings is shown in Other Current Assets and the contract billings in excess of revenue recognised are shown in Other Current Liabilities.

(ii) Interest Income:

Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of interest. (iii) Other Income:

Other income is recognised on accrual basis except when realisation of such income is uncertain.

4. Investments:

Long Term Investments are stated at cost. However, provision for diminution in the value of long-term investments is made to recognise a decline is other than temporary in the opinion of the management.

5. Fixed Assets:

Fixed Assets are stated at cost, net of credits, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work in progress includes the cost of fixed assets that are not yet readyforthe intended use.

6. Intangible Assets:

Intangible Assets are recognised only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

7. Depreciation:

Depreciation on all assets has been provided on Straight Line Method as per the rate and manner prescribed under the Schedule XIV to the Companies Act, 1956. Depreciation on additions/deletion to assets during the year is provided on a pro-rata basis. Assets costing Rs. 5000 or less are depreciated @100% on pro-rata basis in the year of purchases.

Intangible assets are amortised over their respective individual estimated useful lives on a Straight Line Basis commencingfrom the date the assets are available to the company for its use.

8. Impairment of Assets:

The company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit & Loss. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

9. Leases

Assets leased out under operating leases are capitalized. Rental income is recognized on accrual basis over the lease term.

Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

10. Inventories:

Inventories are valued at cost or net realizable value, whichever is lower. The basis of determining cost for various categories of inventories is as follows-

11. Foreign Currency Transactions:

Foreign currency transactions during the year are reco Jed at rates of exchange prevailing on the date of transactions. Foreign currency assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the Statement of Profit & Loss.

12. Employee Benefits:

(a) Post Employment Benefits:

i) Defined Contribution plan

Company''s contribution paid/payable for the year to defined contribution retirement benefit Schemes are charged to Statement of Profit and Loss.

ii) Defined Benefit plan

Company''s liabilities towards defined benefit schemes are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period of occurrence of such gains and losses. Past service cost is recognised immediately to the extent of benefits are vested, otherwise it is amortized on Straight-line basis over the remaining average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of scheme assets. iii) Short-term employee benefits

Short-term employee benefits expected to be paid in exchange for the services rendered by Employees are recognised undiscounted during the period employee renders services. These benefits include performance incentives.

(b) Long term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as an actuarially determined liability at present value of the defined benefit obligation at the balance sheet date.

13. Taxes on Income:

The Provision for Taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax charge or credit and correspondingly deferred tax asset or liability is recognized using tax rates that have been enacted or substantively enacted at the balance sheet date. 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. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount i.e. reasonable/virtually certain (as the case may be) to be realized.

14. Provisions, Contingent Liabilities and Contingent Assets:

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed.


Dec 31, 2010

These accounts have been prepared under the historical cost convention on accrual basis and comply with Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 of India.

I) FIXED ASSETS AND DEPRECIATION:

a. Fixed assets are stated at cost of acquisition inclusive of any other cost attributable to bringing the same into working condition. They are stated at historical cost.

b. Depreciation is provided on Straight Line Method in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956 of India.

c. In respect of assets acquired /sold/discarded during the financial year, depreciation is provided on prorata basis.

ii) INVESTMENTS:

Investments are stated at cost of acquisition or are marked down if there is a permanent diminution in value. iii) INVENTORIES:

a. Stores and spare parts are valued at weighted average cost.

b. Raw materials and components are valued at weighted average cost.

c. Work-in-progress is valued at cost. Finished goods are valued at cost or market value whichever is lower. Cost represents historical cost arrived at on the basis of absorption costing.

iv) FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currencies, to the extent not covered by forward contracts, are accounted at current exchange rates. Gains and losses arising out of subsequent fluctuations in exchange rates are accounted for on realisation. Conversion losses/gains at the year end in respect of current assets and current liabilities are dealt with in the Profit & Loss Account.

v) GRATUITY :

Effective January 01, 2007 the Company has adopted the revised Accounting Standards (AS) 15 on Employee Benefits.

The Company has taken Master Policy from Life Insurance Corporation (LIC) under Employees Group Gratuity cum Life Assurance (Cash Accumulation) Scheme. All employees are covered under Employees Gratuity Scheme which is a defined plan. The Company contributes to the fund on the basis of the liability actuarially determined in pursuance of the Scheme. All actuarial gains / losses arising during the accounting year are recognised immediately in the profit and loss account as income or expense.

vi) LEAVE ENCASHMENT:

Provision has been made in respect of accumulated encashable leave balances of the employees on the basis of their current salaries. Since 2006, the Leave Encashment liability has been fully funded with Life Insurance Corporation of India. vii) REVENUE RECOGNITION:

a) Sale of goods is recognised on transfer of property therein. Sales are inclusive of Excise duty and net of sales tax / value added tax and sales returns.

b) Insurance and other claims are recognised only on acceptance of claims by the appropriate authorities.

c) Interest income is accounted for on a time proportion basis taking into account the amount outstanding and the rate applicable.

viii) INCOME AND DEFFERED TAXES:

Tax expense comprises of current, deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income tax reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized 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. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each Balance Sheet date the Company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

ix) MISCELLANEOUS EXPENDITURE:

The expenditure in respect of the Voluntary Retirement Scheme is being amortised over a period of five years.

x) IMPAIRMENT OF ASSETS

The Company evaluates the impairment of losses on the fixed assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such assets are considered to be impaired the impairment loss is then recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an assets net selling price and value in use. For the purpose of assessing impairment, assets are grouped at the smallest level for which there is separately identifiable cash flows.


Dec 31, 2009

These accounts have been prepared under the historical cost convention on accrual basis and comply with Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 of India.

i) FIXED ASSETS AND DEPRECIATION:

a. Fixed assets are stated at cost of acquisition inclusive of any other cost attributable to bringing the same into working condition. They are stated at historical cost.

b. Depreciation is provided on Straight Line Method in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956 of India.

c. In respect of assets acquired /sold/discarded during the financial year, depreciation is provided on prorata basis.

ii) INVESTMENTS:

Investments are stated at cost of acquisition or are marked down if there is a permanent diminution in value.

iii) INVENTORIES:

a. Stores and spare parts are valued at weighted average cost.

b. Raw materials, and components are valued at weighted average cost.

c. Work-in-progress is valued at cost. Finished goods are valued at cost or market value whichever is lower. Cost represents historical cost arrived at on the basis of absorption costing.

iv) FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currencies, to the extent not covered by forward contracts, are accounted at current exchange rates. Gains and losses arising out of subsequent fluctuations in exchange rates are accounted for on realisation. Conversion losses/gains at the year end in respect of current assets and current liabilities are dealt with in the Profit & Loss Account.

v) GRATUITY:

Effective January 01,2007 the Company has adopted the revised Accounting Standards (AS) 15 on Employee Benefits.

The Company has taken Master Policy from Life Insurance Corporation (LIC) under Employees Group Gratuity cum Life Assurance (Cash Accumulation) Scheme. All employees are covered under Employees Gratuity Scheme which is a defined plan. The Company contributes to the fund on the basis of the liability actuarially determined in pursuance of the Scheme. All actuarial gains / losses arising during the accounting year are recognised immediately in the profit and loss account as income or expense.

vi) LEAVE ENCASHMENT:

Provision has been made in respect of accumulated encashable leave balances of the employees on the basis of their current salaries. Since 2006, the Leave Encashment liability has been fully funded with Life Insurance Corporation of India.

vii) REVENUE RECOGNITION:

a) Sale of goods is recognised on transfer of property therein. Sales are inclusive of Excise duty and net of sales tax / value added tax and sales returns.

b) Insurance and other claims are recognised only on acceptance of claims by the appropriate authorities.

c) Interest income is accounted for on a time proportion basis taking into account the amount outstanding and the rate applicable.

viii) INCOME AND DEFFERED TAXES:

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income tax reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized 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. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each Balance Sheet date the Company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

ix) MISCELLANEOUS EXPENDITURE:

The expenditure in respect of the Voluntary Retirement Scheme is being amortised over a period of five years.

x) IMPAIRMENT OF ASSETS

The Company evaluates the impairment of losses on the fixed assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such assets are considered to be impaired the impairment loss is then recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an assets net selling price and value in use. For the purpose of assessing impairment, assets are grouped at the smallest level for which there is separately identifiable cash flows.

 
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