Accounting Policies of Schneider Electric President Systems Ltd. Company
Mar 31, 2015
1. Corporate Information
Schneider Electric President Systems Limited ('SEPSL' or 'the Company')
is a designer, manufacturer and supplier of standard and customized
enclosure systems for over 30 years in 19-inch enclosures for IT and
Telecom infrastructure, systems management and operations.
The Company's operations predominantly relate to manufacture of
enclosures, card frames, components and accessories and trading of
electrical equipments. SEPSL is a manufacturer in India offering
standard and customized enclosure solutions, including card frames and
components, with a focus on the IT/Networking and ITES, Telecom,
General and Industrial Electronics sectors.
SEPSL also has a nationwide network of sales offices, representatives
and distributors to support customer wherever they may need assistance
for installation, commissioning and on-going services.
2. Basis of preparation
The financial statements of the Company have been prepared in accordance
with the generally accepted accounting principles in India (Indian
GAAP). The Company has prepared these financial statements to comply in
all material respects with the accounting standards notified under
section 133 of the Companies Act 2013, read together with paragraph 7
of the Companies (Accounts) Rules 2014. The financial statements have
been prepared on an accrual basis and under the historical cost
convention unless stated otherwise. The accounting policies adopted in
the preparation of financial statements are consistent with those of the
previous year.
Going concern uncertainty
The Company incurred a net loss of Rs.37,182,769 for the financial year
ended 31st March, 2015. Further, the Company incurred a net loss of
Rs.48,192,526 and Rs.33,295,488 for the year ended 31st March, 2014 and
2013, respectively. While these factors would normally indicate the
existence of a material uncertainty which may cast significant doubt
about the Company's ability to continue as a going concern, the receipt
of financial and operating support from the parent company, including
increased borrowing limits and extension to repay the borrowing on 31st
October, 2018 from a group company in India, mitigates this
uncertainty. Consequently, no adjustments have been made to the
carrying value, or classification of the balance sheet amounts.
2.1. Summary of significant accounting policies
a. Change in accounting estimate
Depreciation / amortization on tangible and intangible assets
Due to application of Schedule II to the Act with effect from April 01,
2014, the management has re-established useful lives and residual
values of all its fixed assets and determined separate useful life for
each major component of the fixed assets, if they have useful life that
is materially different from that of the remaining asset. The
management believes that depreciation rates currently used fairly
refect its estimate of the useful lives and residual values of fixed
assets, though these rates in certain cases are different from lives
prescribed under schedule II.
The carrying amount of other components, i.e. components whose
remaining useful life is not nil on April 01, 2014, is depreciated over
their remaining useful life. Accordingly, depreciation of Rs.11,131,797
(net of tax impact) has been adjusted to the opening balance of surplus
in the Statement of profit and loss, with corresponding adjustment to
net book value of fixed assets, in accordance with the transitional
provision of Schedule II of the Act.
Further, basis such change the depreciation / amortization expenses for
the year ended 31st March, 2015 are higher by Rs.4,947,555 (net of tax).
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Subsequent expenditure related to an item of fixed asset is added to its
book value only if it increases the future benefits from the existing
asset beyond its previously assessed standard of performance. All other
expenses on existing fixed assets, including day- to-day repair and
maintenance expenditure and cost of replacing parts, are charged to the
statement of profit and loss for the period during which such expenses
are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
Advances paid towards the acquisition of fixed assets are disclosed as
"Capital advances" under Loans and Advances and the cost of assets not
ready to be put to use as at the balance sheet date are disclosed as
'Capital work-in-progress'.
d. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management. The Company has used the following rates to provide
depreciation on its fixed assets.
*For these classes of assets, where the estimated useful lives are
different from lives prescribed under Schedule II, management has
estimated these useful lives after taking into consideration technical
assessment, prior asset usage experience and the risk of technological
obsolescence.
Leasehold land is amortised on a straight line basis over the period of
lease.
Depreciation is provided on pro-rata basis from/up to the date of
purchase or disposal, for asset purchased or sold during the year.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. Patents and trademarks, computer
software and designs and copyrights are amortised over a period of nine
years, six years and five years respectively, from the date available
for use.
Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
f. Leases
Finance leases, which effectively transfer to the company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of minimum lease
payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges are
recognized as finance costs in the statement of profit and loss. Lease
management fees, legal charges and other initial direct costs of lease
are capitalized.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset. However, if there is no reasonable certainty that
the Company will obtain the ownership by the end of the lease term, the
capitalized asset is depreciated on a straight-line basis over the
shorter of the estimated useful life of the asset or the lease term.
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
g. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
h. Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset's recoverable amount. An asset's recoverable amount
is the higher of an asset's or cash-generating unit's (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. In determining net selling
price, recent market transactions are taken into account, if available.
If no such transactions can be identified, an appropriate valuation
model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company's cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
ffth year.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
i. Inventories
Raw materials, components, stores and spares are valued at lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost of raw materials, components
and stores and spares is determined on first-in-first-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of work in progress and finished goods (including excise
duty) is determined on first-in-first-out basis.
Traded goods are valued at lower of cost and net realizable value. Cost
includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined
on first-in-first-out basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
Provision for inventory obsolescence is assessed and adjusted from the
gross value of the inventory.
j. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must also
be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The Company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits following to the Company. Hence, they are
excluded from revenue. Excise duty deducted from revenue (gross) is the
amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year.
The amount recognised as sale is exclusive of trade discounts.
Income from services
Service income primarily comprises income from commissioning and
installation, service charges, processing charges and commission income
and is recognized on accrual basis as per the terms and over the period
of the contract with the customers, as and when the services are
rendered. The Company collects service tax on behalf of the government
and therefore, it is not an economic benefit following to the Company.
Hence it is excluded from revenue.
Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Other Income
Export incentives are recognised as income when the right to receive
credit as per the terms of the scheme is established in respect of the
exports made and where there is no significant uncertainty regarding the
ultimate collection of the relevant export proceeds.
k. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, measured in
terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as income or
as expenses in the period in which they arise.
l. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the provident fund are
charged to the statement of profit and loss for the year as an
expenditure, when an employee renders the related service. The Company
has no obligation, other than the contribution payable to the provident
fund.
The Company operates defined benefit plan for its employees, viz.
gratuity. The costs of providing benefits under the plan are determined
on the basis of actuarial valuation at each year-end. Actuarial
valuation is carried out for the plan using the projected unit credit
method. Actuarial gains and losses for defined benefit plan are
recognized in full in the period in which they occur in the statement
of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The Company presents the entire
leave as a current liability in the balance sheet, since it does not
have an unconditional right to defer its settlement for 12 months after
the reporting date.
The Company recognizes termination benefit as a liability and an expense
when the Company has a present obligation as a result of past event, it
is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. If the termination benefits fall
due more than 12 months after the balance sheet date, they are measured
at present value of future cash flows using the discount rate determined
by reference to market yields at the balance sheet date on government
bonds.
m. Income taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes refect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
suffcient 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, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profts.
At each reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that suffcient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that suffcient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
suffcient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to be
carried forward. In the year in which the company recognizes MAT credit
as an asset in accordance with the Guidance Note on Accounting for
Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as "MAT Credit Entitlement." The
Company reviews the "MAT credit entitlement" asset at each reporting
date and writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
period.
n. Segment reporting
Identification of segments
The Company's operating businesses are organized and managed separately
according to the nature of products and services provided; with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter-segment transfers
The Company generally accounts for intersegment sales and transfers at
cost plus appropriate margins.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
o. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
effects of anti-dilutive potential equity shares are not considered in
calculating dilutive earnings per share.
As at the balance sheet date, the Company does not have any dilutive
potential equity shares.
p. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to refect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
q. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or non-
occurrence of one or more uncertain future events beyond the control of
the Company or a present obligation that is not recognized because it
is not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognized because it
cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the financial
statements.
r. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and on hand, demand deposits and short- term
investments with an original maturity of three months or less.
s. Measurement of EBITDA
The Company has elected to present earnings/ (losses) before interest,
tax, depreciation and amortization (EBITDA) as a separate line item on
the face of the statement of profit and loss. In its measurement, the
Company does not include depreciation and amortization expense, fnance
costs, interest income and tax expense..
Mar 31, 2014
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
b. Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
Advances paid towards the acquisition of fixed assets are disclosed as
"Capital advances" under Loans and Advances and the cost of assets
not ready to be put to use as at the balance sheet date are disclosed
as ''Capital work-in-progress''.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher. The Company has used the following
rates to provide depreciation on its fixed assets.
Leasehold land is amortised on a straight line basis over the period of
lease.
Depreciation is provided on pro-rata basis from/up to the date of
purchase or disposal, for asset purchased or sold during the year.
Assets costing less than Rs. 5,000 individually are fully depreciated in
the year of purchase.
d. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are car- ried at cost less accumulated amortization and accumulated
impairment losses, if any.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. Patents and trademarks, computer soft-
ware and designs and copyrights are amortised over a period of nine
years, six years and five years respectively, from the date available
for use.
Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
e. Leases
Finance leases, which effectively transfer to the company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of minimum lease
payments. Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance charges
are recognized as finance costs in the statement of profit and loss.
Lease Management fees, legal charges and other initial direct costs of
lease are capitalized.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset or the useful life envisaged in Schedule XIV to the
Companies Act, 1956, whichever is lower. However, if there is no
reasonable certainty that the Company will obtain the ownership by the
end of the lease term, the capitalized asset is depreciated on a
straight-line basis over the shorter of the estimated useful life of
the asset, the lease term or the useful life envisaged in Schedule XIV
to the Companies Act, 1956.
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
op- erating leases. Operating lease payments are recognized as an
expense in the statement of profit and loss on a straight-line basis
over the lease term.
f. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
g. Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable amount
is the higher of an asset''s or cash-generating unit''s (CGU) net selling
price and its value in use. The recoverable amount is deter- mined for
an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
fifth year.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
h. Inventories
Raw materials, components, stores and spares are valued at lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost of raw materials, components
and stores and spares is determined on first-in-first-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of work in progress and finished goods (including excise
duty) is determined on first-in-first-out basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
Provision for inventory obsolescence is assessed and adjusted from the
gross value of the inventory.
i. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The Company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the Company. Hence, they
are excluded from revenue. Excise duty deducted from revenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year.
The amount recognised as sale is exclusive of trade discounts.
Income from services
Service income primarily comprises income from commissioning and
installation, service charges, processing charges and commission income
and is recognized on accrual basis as per the terms and over the period
of the contract with the customers, as and when the services are
rendered. The Company collects service tax on behalf of the government
and therefore, it is not an economic benefit flowing to the Company.
Hence it is excluded from revenue.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
Other Income
Export incentives are recognised as income when the right to receive
credit as per the terms of the scheme is established in respect of the
exports made and where there is no significant uncertainty regarding
the ultimate Collection of the relevant export proceeds.
j. Foreign currency translation
Foreign currency transactions and balances Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate be- tween
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, meas- ured
in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as income or
as expenses in the period in which they arise.
k. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the provident fund are
charged to the statement of profit and loss for the year as an
expenditure, when an employee renders the related service. The Company
has no obligation, other than the contribution payable to the provident
fund.
The Company operates defined benefit plan for its employees, viz.
gratuity. The costs of providing benefits under the plan are determined
on the basis of actuarial valuation at each year-end. Actuarial
valuation is carried out for the plan using the projected unit credit
method. Actuarial gains and losses for defined benefit plan are
recognized in full in the period in which they occur in the statement
of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for meas- urement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The Company presents the
entire leave as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement for 12 months
after the reporting date.
l. Income taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Compa- ny
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the cur- rent
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differenc- es 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, all
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 reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset 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.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
Notes to financial statements for the year ended 31 March 2014 income
will be available against which deferred tax asset can be realized. Any
such write-down is reversed to the extent that it becomes reasonably
certain or virtually certain, as the case may be, that sufficient
future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
m. Segment reporting
Identification of segments
The Company''s operating businesses are organized and managed separately
according to the nature of products and services provided; with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter-segment transfers
The Company generally accounts for intersegment sales and transfers at
cost plus appropriate margins.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
effects of anti-dilutive potential equity shares are not considered in
calculating dilutive earnings per share.
As at the balance sheet date, the Company does not have any dilutive
potential equity shares.
o. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or non-
occurrence of one or more uncertain future events beyond the control of
the Company or a present obligation that is not recognized because it
is not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognized because it
cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the financial
statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and on hand, demand deposits and short-term
investments with an original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earn- ings/
(losses) before interest, tax, depreciation and amortization (EBITDA)
as a separate line item on the face of the statement of profit and
loss. In its measurement, the Company does not include depreciation and
amortization expense, finance costs, interest income and tax expense.
(b) Terms/ rights attached to equity shares
The Company has only one class of equity shares having a par value of
?10 per share. Each holder of equity is entitled to one vote per share.
The Company declares and pays dividend in Indian rupees. The dividend
proposed by the Board of directors is subject to the approval of the
shareholders in ensuing Annual General meeting.
In event of liquidation of the Company, the holders of equity shares
would be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
On 3 January 2013, the promoters of the Company had come out with
delisting offer to acquire up to 1,512,006 equity shares representing
25 per cent of the equity capital of the Company from the public
shareholders to comply with SEBI guidelines on minimum shareholding
pattern, however the Company could not get prescribed numbers of shares
required to successfully de-list the stock.
As per records of the Company, including its register of shareholders/
members and other declaration received from shareholders regarding
beneficial interest, the above shareholding represent both legal and
beneficial ownership of shares.
Mar 31, 2013
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
b. Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day- to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized. Advances paid towards the
acquisition of fixed assets are disclosed as "Capital advances" under
Loans and Advances and the cost of assets not ready to be put to use as
at the balance sheet date are disclosed as ''Capital work-in-progress''.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher. The Company has used the following
rates to provide depreciation on its fixed assets.
Leasehold land is amortised on a straight line basis over the period of
lease.
Depreciation is provided on pro-rata basis from/up to the date of
purchase or disposal, for asset purchased or sold during the year.
Assets costing less than Rs 5,000 individually are fully depreciated in
the year of purchase.
d. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. Patents, computer software and
copyrights are amortised over a period of nine years, six years and
give years respectively, from the date available for use. Gains or
losses arising from derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
e. Leases
Finance leases, which effectively transfer to the company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of minimum lease
payments. Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance charges
are recognized as finance costs in the statement of profit and loss.
Lease management fees, legal charges and other initial direct costs of
lease are capitalized. A leased asset is depreciated on a
straight-line basis over the useful life of the asset or the useful
life envisaged in Schedule XIV to the Companies Act, 1956, whichever is
lower. However, if there is no reasonable certainty that the Company
will obtain the ownership by the end of the lease term, the capitalized
asset is depreciated on a straight-line basis over the shorter of the
estimated useful life of the asset, the lease term or the useful life
envisaged in Schedule XIV to the Companies Act, 1956.
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
f. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
g. Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable amount
is the higher of an asset''s or cash-generating unit''s (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term
growth rate is calculated and applied to project future cash flows
after the fifth year. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life.
h. Inventories
Raw materials, components, stores and spares are valued at lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost of raw materials,
components and stores and spares is determined on first-in-first-out
basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of work in progress and finished goods (including
excise duty) and is determined on first-in-first-out basis. Net
realizable value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and estimated costs
necessary to make the sale.
Provision for inventory obsolescence is assessed and adjusted from the
gross value of the inventory.
i. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The Company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the Company. Hence, they are
excluded from revenue. Excise duty deducted from revenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year. The amount recognised as
sale is exclusive of trade discounts.
Income from services
Service income primarily comprises income from commissioning and
installation, service charges, processing charges and commission income
and is recognized on accrual basis as per the terms and over the period
of the contract with the customers, as and when the services are
rendered. The Company collects service tax on behalf of the government
and therefore, it is not an economic benefit flowing to the Company.
Hence it is excluded from revenue.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
Other Income
Export incentives are recognised as income when the right to receive
credit as per the terms of the scheme is established in respect of the
exports made and where there is no significant uncertainty regarding
the ultimate collection of the relevant export proceeds.
j. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, measured in
terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as income or
as expenses in the period in which they arise.
k. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the provident fund are
charged to the statement of profit and loss for the year as an
expenditure, when an employee renders the related service. The Company
has no obligation, other than the contribution payable to the provident
fund.
The Company operates defined benefit plan for its employees, viz.
gratuity. The costs of providing benefits under the plan are determined
on the basis of actuarial valuation at each year-end. Actuarial
valuation is carried out for the plan using the projected unit credit
method. Actuarial gains and losses for defined benefit plan are
recognized in full in the period in which they occur in the statement
of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date. The Company treats accumulated
leave expected to be carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such long-term compensated
absences are provided for based on the actuarial valuation using the
projected unit credit method at the year-end. Actuarial gains/losses
are immediately taken to the statement of profit and loss and are not
deferred. The Company presents the entire leave as a current liability
in the balance sheet, since it does not have an unconditional right to
defer its settlement for 12 months after the reporting date.
l. Income taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss. Deferred tax liabilities
are recognized for all taxable timing differences. Deferred tax assets
are recognized for deductible timing differences 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, all 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 reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset 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. The
carrying amount of deferred tax assets are reviewed at each reporting
date. The Company writes-down the carrying amount of deferred tax
asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
m. Segment reporting
Identification of segments
The Company''s operating businesses are organized and managed separately
according to the nature of products and services provided; with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter-segment transfers
The Company generally accounts for intersegment sales and transfers at
cost plus appropriate margins.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
effects of anti-dilutive potential equity shares are not considered in
calculating dilutive earnings per share. As at the balance sheet date,
the Company does not have any dilutive potential equity shares.
o. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and on hand, demand deposits and short- term
investments with an original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings/
(losses) before interest, tax, depreciation and amortization (EBITDA)
as a separate line item on the face of the statement of profit and
loss. In its measurement, the Company does not include depreciation and
amortization expense, finance costs, interest income and tax expense
Mar 31, 2012
A. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year. For further details, refer note 41.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
item of fixed asset is added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed
standard of performance. All other expenses on existing fixed assets,
including day- to-day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for
the period during which such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized. Advances paid towards the
acquisition of fixed assets are disclosed as "Capital advances" under
Loans and Advances and the cost of assets not ready to be put to use as
at the balance sheet date are disclosed as 'Capital work-in-progress'.
d. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher. The Company has used the following
rates to provide depreciation on its fixed assets.
Depreciation is provided on pro-rata basis from/up to the date of
purchase or disposal, for asset purchased or sold during the year.
Assets costing less than Rs 5,000 individually are fully depreciated in
the year of purchase.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. Patents, computer software and
copyright are amortised over a period of nine years, six years and five
years respectively, from the date put to use. Gains or losses arising
from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of
the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
f. Leases
Finance leases, which effectively transfer to the company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of the lease term at the lower of the
fair value of the leased property and present value of minimum lease
payments. Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance charges
are recognized as finance costs in the statement of profit and loss.
Lease management fees, legal charges and other initial direct costs of
lease are capitalized. A leased asset is depreciated on a
straight-line basis over the useful life of the asset or the useful
life envisaged in Schedule XIV to the Companies Act, 1956, whichever is
lower. However, if there is no reasonable certainty that the Company
will obtain the ownership by the end of the lease term, the capitalized
asset is depreciated on a straight-line basis over the shorter of the
estimated useful life of the asset, the lease term or the useful life
envisaged in Schedule XIV to the Companies Act, 1956. Leases, where
the lessor effectively retains substantially all the risks and benefits
of ownership of the leased item, are classified as operating leases.
Operating lease payments are recognized as an expense in the statement
of profit and loss on a straight-line basis over the lease term.
g. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
h. Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset's recoverable amount. An asset's recoverable amount
is the higher of an asset's or cash-generating unit's (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The Company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
Company's cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally
covering a period of five years. For longer periods, a long term growth
rate is calculated and applied to project future cash flows after the
fifth year. After impairment, depreciation is provided on the revised
carrying amount of the asset over its remaining useful life.
i. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
j. Inventories
Raw materials, components, stores and spares are valued at lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost of raw materials, components
and stores and spares is determined on first-in-first-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty and is determined
on first-in-first-out basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
Provision for inventory obsolescence is assessed and adjusted from the
gross value of the inventory.
k. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The Company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the Company. Hence, they are
excluded froMrevenue. Excise duty deducted froMrevenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year. The amount recognised as
sale is exclusive of trade discounts.
Income from services
Service income primarily comprises income from commissioning and
installation, service charges, processing charges and commission income
and is recognized on accrual basis as per the terms and the period of
the contract with the customers, over which the service is rendered.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
Dividends
Dividend income is recognized when the Company's right to receive
dividend is established by the reporting date.
Other Income
Export incentives are recognised as income when the right to receive
credit as per the terms of the scheme is established in respect of the
exports made and where there is no significant uncertainty regarding
the ultimate collection of the relevant export proceeds.
l. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, measured in
terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
Exchange differences
The Company accounts for exchange differences arising on
translation/settlement of foreign currency monetary items as income or
as expenses in the period in which they arise.
m. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the provident fund are
charged to the statement of profit and loss for the year when the
contributions are due. The Company has no obligation, other than the
contribution payable to the provident fund.
The Company operates defined benefit plans for its employees, viz.
gratuity. The costs of providing benefits under the plan are determined
on the basis of actuarial valuation at each year-end. Separate
actuarial valuation is carried out for each plan using the projected
unit credit method. Actuarial gains and losses for both defined benefit
plans are recognized in full in the period in which they occur in the
statement of profit and loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The Company presents the
entire leave as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement for 12 months
after the reporting date.
n. Income taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences 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, all 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 reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset 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.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
o. Segment reporting
Identification of segments
The Company's operating businesses are organized and managed separately
according to the nature of products and services provided; with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter-segment transfers
The Company generally accounts for intersegment sales and transfers at
cost plus appropriate margins.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
p. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
effects of anti-dilutive potential equity shares are not considered in
calculating dilutive earnings per share.
As at the balance sheet date, the Company does not have any dilutive
potential equity shares.
q. Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
r. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
s. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and on hand, demand deposits and short- term
investments with an original maturity of three months or less.
t. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. In its
measurement, the Company does not include depreciation and amortization
expense, finance costs and tax expense.
Mar 31, 2011
A. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the applicable
Accounting Standards notified under Section 211(3C) of the Companies
Act, 1956, and the relevant provisions of the Companies Act, 1956. (the
Act)
B. Fixed Assets
Fixed Assets are stated at cost of acquisition (including incidental
expenses relating to acquisition and installation of the asset and
borrowing costs specifically relatable to the acquisition of the asset)
less accumulated depreciation/amortisation.
C. Depreciation/Amortisation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Act except for demo stock
capitalised which is depreciated @ 50% p.a. Assets individually costing
Rs. 5,000 or less are depreciated fully in the year of acquisition.
Patents and Trademarks are amortised over a period of nine years from
the year of put to use.
Design and Copyrights are amortised over a period of five years from
the year of put to use.
Computer Software are amortised over a period of six years from the
year of put to use.
D. Investments
Long term investments are stated at cost less provision, if any, for
permanent diminution in value. Current investments are carried at the
lower of cost and fair value.
E. Inventories
(a) Inventories are valued at lower of cost and net realisable value.
(b) Cost of raw materials and cost of traded goods is determined on
first-in-first-out basis.
(c) Cost of Work-in-process and finished goods comprises all cost of
purchase, cost of conversion and other related overheads.
F. Foreign Currency Transactions
(a) Foreign currency transactions are translated at the exchange rates
prevailing on the date of the transactions.
(b) Realised gains and losses on settled foreign exchange transactions
are recognised in the Profit and Loss Account.
(c) Monetary assets and liabilities denominated in foreign currency as
at the Balance Sheet date are translated at the exchange rates
prevailing at the date of the Balance Sheet and the resultant exchange
difference is recognised in the Profit and Loss Account.
(d) In respect of forward contracts, other than forward contracts in
respect of firm commitments and highly probable forecast transactions,
the premium or discount arising at the inception of forward exchange
contract is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
Profit and Loss Account in the reporting period in which the exchange
rates change. Any profit or loss arising on cancellation or renewal of
such a forward exchange contract is recognised as income or as expense
for the year.
(e) The Company marks-to-market all outstanding derivative contracts at
the year-end and the resultant mark-to-market losses, if any, are
recognised in the Profit and Loss Account.
G. Revenue Recognition
(a) Sales are recognised based on the terms and conditions (mainly
ex-works) agreed with the customer and upon transfer of ownership, risk
and rewards. Sales include insurance, freight, packing and octroi and
are exclusive of excise duty and sales tax.
(b) In respect of commission and other heads of income, the Company
follows the practice of recognising income on an accrual and prudent
basis.
H. Employee Benefits
(a) Defined Contribution Plans
The Company contributes on a defined contribution basis to Employees
Provident Fund, Employees State Insurance Fund and Employees Pension
Scheme towards post employment benefits, all of which are administered
by the respective Government authorities, and has no further obligation
beyond making its contribution, which is expensed in the year to which
it pertains.
(b) Defined Benefit Plans
The Company has a Defined Benefit Plan namely Gratuity for all its
employees. The liability for the defined benefit plan of Gratuity is
determined on the basis of an actuarial valuation by an independent
actuary at the year end, which is calculated using projected unit
credit method.
Gratuity Fund is recognised by the income tax authorities and is
administered through trustees. The Company has taken a group gratuity
policy with Life Insurance Corporation of India.
Actuarial gains and losses which comprise experience adjustment and the
effect of changes in actuarial assumptions are recognised in the Profit
and Loss Account.
(c) Employee Leave Entitlement
The employees of the Company are entitled to leave as per the leave
policy of the Company. The liability in respect of unutilised leave
balances is provided based on an actuarial valuation carried out by an
independent actuary as at the year end and charged to the Profit and
Loss Account. Leave balances to be utilised in short term is provided
for on the basis of cost to Company and charged to the Profit and Loss
Account.
I. Deferred Taxation
(a) Deferred tax resulting from timing differences between book and tax
profits is accounted for under the Liability method at the current rate
of tax to the extent that the timing differences are expected to
crystallise/capable of reversal.
(b) In case there are carried forward losses and unabsorbed
depreciation as per the Income Tax Act, 1961, of India, deferred tax
assets are recognised only when there is a virtual certainty supported
by convincing evidence that such assets will be realised.
J. 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 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 recognised in the
Profit and Loss Account. 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.
K. Provisions and Contingent Liabilities
The Company recognises 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 but the likelihood of outflow of
resources is remote, no provision or disclosure as specified in
Accounting Standard 29 Ã " Provisions, Contingent Liabilities and
Contingent Assets", issued by the Institute of Chartered Accountants of
India is made.
L. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and the reported
amounts of revenue and expenses during the reporting period. Difference
between the actual results and the estimates are recognized in the
period in which the results are known/materialised.
Mar 31, 2010
A. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the applicable
Accounting Standards notified under Section 211(3C) of the Companies
Act, 1956, and the relevant provisions of the Companies Act, 1956. (the
Act)
B. Fixed Assets
Fixed Assets are stated at cost of acquisition (including incidental
expenses relating to acquisition and installation of the asset and
borrowing costs specifically relatable to the acquisition of the asset)
less accumulated depreciation.
C. Depreciation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Act except for demo stock
capitalised which is depreciated @ 50% p.a. Assets individually costing
Rs. 5,000 or less are depreciated fully in the year of acquisition.
D. Investments
Long term investments are stated at cost less provision, if any, for
permanent diminution in value. Current investments are carried at the
lower of cost and fair value (Refer Note No.5).
E. Inventories
(a) Inventories are valued at lower of cost and net realisable value.
(b) Cost of raw materials and cost of traded goods is determined on
first-in-first-out basis.
(c) Cost of Work-in-process and finished goods comprises all cost of
purchase, cost of conversion and other related overheads.
F. Foreign Currency Transactions
(a) Foreign currency transactions are translated at the exchange rates
prevailing on the date of the transactions.
(b) Realised gains and losses on settled foreign exchange transactions
are recognised in the Profit and Loss Account.
(c) Monetary assets and liabilities denominated in foreign currency as
at the Balance Sheet date are translated at the exchange rates
prevailing at the date of the Balance Sheet and the resultant exchange
difference is recognised in the Profit and Loss Account.
(d) In respect of forward contracts, other than forward contracts in
respect of firm commitments and highly probable forecast transactions,
the premium or discount arising at the inception of forward exchange
contract is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
Profit and Loss Account in the reporting period in which the exchange
rates change. Any profit or loss arising on cancellation or renewal of
such a forward exchange contract is recognised as income or as expense
for the year.
G. Revenue Recognition
(a) Sales are recognised based on the terms and conditions (mainly
ex-works) agreed with the customer and upon transfer of ownership, risk
and rewards. Sales include insurance, freight, packing and octroi and
are exclusive of excise duty and sales tax.
(b) In respect of commission and other heads of income, the Company
follows the practice of recognising income on an accrual and prudent
basis.
H. Employee Benefits
(a) Defined Contribution Plans The Company contributes on a defined
contribution basis to EmployeeÃs Provident Fund, EmployeeÃs State
Insurance Fund and EmployeeÃs Pension Scheme towards post employment
benefits, all of which are administered by the respective Government
authorities, and has no further obligation beyond making its
contribution, which is expensed in the year to which it pertains.
(b) Defined Benefit Plan
The Company has a Defined Benefit Plan namely Gratuity for all its
employees. The liability for the defined benefit plan of
Gratuity is determined on the basis of an actuarial valuation by an
independent actuary at the year end, which is calculated using project
-ed unit credit method.
Gratuity Fund is recognised by the income tax authorities and is
administered through trustees. The Company has taken a group
gratuity policy with Life Insurance Corporation of India.
Actuarial gains and losses which comprise experience adjustment and the
effect of changes in actuarial assumptions are recognised in the Profit
and Loss Account.
(c) Employee Leave Entitlement The employees of the Company are
entitled to leave as per the leave policy of the Company. The liability
in respect of unutilised leave balances is provided based on an
actuarial valuation carried out by an independent actuary as at the
year end and charged to the Profit and Loss Account. Leave balances to
be utilised in short term is provided for on the basis of cost to
Company and charged to the Profit and Loss Account.
I. Deferred Taxation
(a) Deferred tax resulting from timing differences between book and tax
profits is accounted for under the Liability method at the current rate
of tax to the extent that the timing differences are expected to
crystallise/capable of reversal.
(b) In case there are carried forward losses and unabsorbed
depreciation as per the Income Tax Act, 1961, of India, deferred tax
assets are recognised only when there is a virtual certainty supported
by convincing evidence that such assets will be realised.
J. 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 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 recognised in the
Profit and Loss Account. 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.
K. Provisions and Contingent Liabilities
The Company recognises 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 but the likelihood of outflow of
resources is remote, no provision or disclosure as specified in
Accounting Standard 29 Ã Ã Provisions, Contingent Liabilities and
Contingent AssetsÃ, issued by the Institute of Chartered Accountants of
India is made.
L. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and the reported
amounts of revenue and expenses during the reporting period.
Difference between the actual results and the estimates are recognized
in the period in which the results are known/ materialised.
M. Miscellaneous Expenditure
Rights issue expenses will be written off upon issue of shares.
Mar 31, 2000
I SYSTEM OF ACCOUNTING
a) The accounts for the year have been prepared on the historical cost
basis.
b) The Company follows the mercantile system of accounting and
recognises income and expenditure on an accrual basis.
ii FIXED ASSETS
a) Fixed Assets have been accounted for at their original cost and
include expenses related to acquisition and installation and interest
on specific loans to the date of commissioning of the assets.
b) Depreciation in respect of the assets held as on 1.4.1994 have been
provided on Written Down Value basis at the Rates prescribed in
Schedule XIV of the Companies Act, 1956. However, depreciation in
respect of the additions made after 1st April, 1994 have been provided
on pro-rata basis with reference to the date of addition/disposal on a
Straight Line basis at the rates prescribed in Schedule XIV of the
Companies Act, 1956.
iii INVESTMENTS
Investments are stated at cost.
iv INVENTORIES
a) Raw materials and components are valued at Cost including Freight
and Octroi and net of Excise Modvat Credit.
b) Finished Goods are valued at the lower of Cost or Market Value. Cost
is arrived at on FIFO basis.
v ACCOUNTING FOR MODVAT CREDIT
Modvat Credit availed for Excise Duty paid on material received is
credited to the material purchased, thereby reducing the cost of
material consumed.
vi FOREIGN EXCHANGE FLUCTUATIONS
Foreign currency receivables and payables are revalued at year end
exchange rates and exchange differences are recognised in the revenue
account.
vii SALES
Sales are recorded at Ex-factory values net of Excise and Sales Tax,
but inclusive of insurance, freight, packing and octroi duty.
viii GRATUITY
The Company has covered its employees under a Group Gratuity Cum Life
Insurance Scheme and contributions to the scheme are debited to the
revenue account.
ix DEFERRED REVENUE EXPENDITURE
a) Preliminary and pre-operative expenditure is amortised over 10 years
in accordance with Section 35 D of the Income Tax Act, 1961.
b) Public Issue Expenditure is amortised over 10 years.
c) Technical Know-how fee paid to collaborator is amortised over 6
years.
d) Website development cost is amortised over 4years.
x LEAVE SALARY
Provision for unutilised encashable leave is made on the basis of an
actuarial valuation.
xi EXPORT INCENTIVE
Export incentives under the Duty Entitlement Pass Book scheme are
accounted on accrual basis on sale of the entitlement upto the date of
finalisation of the accounts.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Schneider Electric President Systems Ltd.
-
Schneider Electric President Systems Ltd. Tools
- Bulk Deals
-
Schneider Electric President Systems Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
-
Schneider Electric President Systems Ltd. Key Financial Ratios
- Ratios
-
Schneider Electric President Systems Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Schneider Electric President Systems Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Schneider Electric President Systems Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Schneider Electric President Systems Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
