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

Accounting Policies of Advanced Micronic Devices Ltd. Company

Mar 31, 2015

A. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally accepted Accounting principles (GAAP) under the historical cost convention on the accrual basis except for some financial instruments which are measured at fair value. GAAP comprises of accounting standards notified under section 211 (3C) of the Companies Act, 1956 ("the 1956 Act") [which continues to be applicable in respect of section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs] and the relevant provision of the 1956 Act/2013 Act as applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to existing accounting standards requires a change in the accounting policy hitherto in use.

b. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other costs relating to the acquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets, until the date the assets are ready for use are capitalized and included in the cost of the asset.

d. Depreciation

Depreciation is calculated on the basis of estimated useful life of that asset for both inside and outside india.

e. Deferred Tax

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets and liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset and liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

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 lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against expenditure Lease management fees, legal charges and other initial direct costs are capitalised.

Operating Lease: Office premises are obtained on operating lease. The lease term varies from 11 months to 36 months and is renewable for further period at the option of the company. Each lease agreement is bound by specific escalation clause. There is no restrictions imposed by lease agreements. There are no sub-lease.

g. Investments

Current investments are valued at lower of cost or fair market value.

h. Inventories

Inventories are valued as follows : Raw materials, components, stores and spares - Lower of cost and net realizable value. Cost is determined on a weighted average basis.

Finished goods - Lower of cost and net realizable value. Cost includes direct materials and labour. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

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.

Sale of Goods : Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest : Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends : Revenue is recognised on actual receipt of Dividend.

j. Foreign currency translation

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange transactions, are recognized in the profit and loss account.

k. Retirement benefits

i. The Company's liability on accrual basis towards retirement benefit in the form of Provident fund, gratuity and earned leave encashment are provided for and charged to revenue expenditure.

ii. The company contributes to the Employee Provident fund maintained under the EPF scheme of the Central Government.

iii. The Gratuity liability was provided and charged off as revenue expenditure based on Actuarial valuation.

iv. Actuarial gains/losses at the time of settlement are immediately taken to the profit and loss account and are not deferred.

l. Statutory Levies & Taxes

The Company follows mercantile system of accounting with respect to transactions in the normal course of business. However, with respect to the effect of the outcome of tax assessments, appeals & proceedings, the Company records the same on determination or completion & disposal.

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset & liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

m. Segment Reporting Policies

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.

Intersegment Transfers : The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

n. Earnings Per Share

The basic earnings per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed, as the Company has not issued any Dilute Potential Equity Shares.

o. Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.


Mar 31, 2014

A. Basis of preparation of financial statements

The financial statements are prepared in accordance with Indian Generally accepted Accounting principles (GAAP) under the historical cost convention on the accrual basis except for some financial instruments which are measured at fair value. GAAP comprises of accounting standards notified under section 211 (3C) of the Companies Act, 1956 ("the 1956 Act") [which continues to be applicable in respect of section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs] and the relevant provision of the 1956 Act/2013 Act as applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to existing accounting standards requires a change in the accounting policy hitherto in use.

b. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other costs relating to the acquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets, until the date the assets are ready for use are capitalized and included in the cost of the asset.

d. Depreciation

Depreciation is provided on Straight Line method at the rates equal to the corresponding rates prescribed in Schedule XIV of the Companies Act, 1956. Proportionate depreciation is charged for additions/deletions during the year on the assets situated in India. For, Assets situated outside India, depreciation is calculated on the basis of estimated useful life of that asset.

e. Deferred Tax

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets and liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset and liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

f. Leases

Finance leases, which effectively transfer to the Company substantially ail the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against expenditure Lease management fees, legal charges and other initial direct costs are capitalised.

Operating Lease: Office premises are obtained on operating lease. The lease term varies from 11 months to 36 months and is renewable for further period at the option of the company. Each lease agreement is bound by specific escalation clause. There is no restrictions imposed by lease agreements. There are no sub-lease.

g. Investments

Current investments are valued at lower of cost or fair market value.

h. Inventories

Inventories are valued as follows: Raw materials, components, stores and spares - Lower of cost and net realizable value. Cost is determined on a weighted average basis.

Finished goods - Lower of cost and net realizable value. Cost includes direct materials and labour. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

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.

Sale of Goods: Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest: Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends: Revenue is recognised on actual receipt of Dividend.

j. Foreign currency translation

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange transactions, are recognized in the profit and loss account.

k. Retirement benefits

i. The Company''s liability on accrual basis towards retirement benefit in the form of Provident fund, gratuity and earned leave encashment are provided for and charged to revenue expenditure.

ii. The company contributes to the Employee Provident fund maintained under the EPF scheme of the Central Government.

iii. The Gratuity liability was provided and charged off as revenue expenditure based on Actuarial valuation.

iv Actuarial gains/losses at the time of settlement are immediately taken to the profit and loss account and are not deferred.

l. Statutory Levies & Taxes

The Company follows mercantile system of accounting with respect to transactions in the normal course of business. However, with respect to the effect of the outcome of tax assessments, appeals & proceedings, the Company records the same on determination or completion & disposal.

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset & liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

m. Segment Reporting Policies

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.

Intersegment Transfers : The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

n. Earnings Per Share

The basic earning per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed, as the Company has not issued any Dilute Potential Equity Shares.

o. Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.


Mar 31, 2013

A. Basis of preparation of financial statements

Tlie financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. Tlie financial statements have been prepared under the historical cost convention on an accrual basis. Tlie accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

b. Use of Estimates

Tlie preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date ofthe financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other costs relating to the acquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets, until the date the assets are ready for use are capitalized and included in the cost of the asset.

d. Depreciation

Depreciation is provided on Straight Line method at the rates equal to the corresponding rates prescribed in Schedule XIV of the Companies Act, 1956. Proportionate depreciation is charged for additions/deletions during the year on the assets situated in India. For, Assets situated outside India, depreciation is calculated on the basis of estimated useful life of that asset.

e. Intangibles

Research and Development Costs" Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalized. Intangible assets are amortized over their respective useful life on straight line basis.

Tlie carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

f. Deferred Tax

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets and liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. Tlie effect on deferred tax asset and liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

g. 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 lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against expenditure Lease management fees, legal charges and other initial direct costs are capitalized.

Operating Lease: Office premises are obtained on operating lease. Tlie lease term varies from 11 months to 36 months and is renewable for further period at the option of the company. Each lease agreement is bound by specific escalation clause. Tliere is no restrictions imposed by lease agreements. There are no sub-lease.

h. Investments

Current investments are valued at lower of cost or fair market value. Long term investments are stated at cost less permanent diminution, if any, in value.

i. Inventories

Inventories are valued as follows: Raw materials, components, stores and spares - Lower of cost and net realizable value. Cost is determined on a weighted average basis.

Finished goods - Lower of cost and net realizable value. Cost includes direct materials and labour. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

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.

Sale of Goods: Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest: Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends: Revenue is recognized on actual receipt of Dividend.

k. Foreign currency translation

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange transactions, other than those relating to fixed assets, are recognized in the profit and loss account.

I. Retirement benefits

i. Tlie Company''s liability on accrual basis towards retirement benefit in the form of Provident fund, gratuity and earned leave encashment are provided for and charged to revenue expenditure.

ii. Tlie company contributes to the Employee Provident fund maintained under the EPF scheme of the Central Government.

iii. Tlie Gratuity liability is provided and charged off as revenue expenditure based on Actuarial valuation.

iv Actuarial gains/losses at the time of settlement are immediately taken to the profit and loss account and are not deferred.

m. Statutory Levies & Taxes

Tlie Company follows mercantile system of accounting with respect to transactions in the normal course of business. However, with respect to the effect of the outcome of tax assessments, appeals & proceedings, the Company records the same on determination or completion & disposal.

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. Tlie effect on deferred tax asset & liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

n. Segment Reporting Policies

Identification of segments : Tlie 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. Hie analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Intersegment Transfers: Tlie Company generally accounts for inter segment sales and transfers as if the sales or transfers were to third parties at current market prices.

o. Earnings Per Share

Tlie basic earnings per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed, as the Company has not issued any Dilute Potential Equity Shares.

p. Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. Tlie cash flows from regular revenue generating, investing and financing activities of the Company are segregated.


Mar 31, 2012

A. Basis of preparation of financial statements

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956,1 he financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

b. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other costs relating to the acquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets, until the date the assets arc ready for use arc capitalized and included in the cost of the asset.

d. Depredation

Depreciation is provided on Straight Line method at the rates equal to the corresponding rates prescribed in Schedule XIV of the Companies Act, 1956. Proportionate depreciation is charged for additions/deletions during the year on the assets situated in India. For, Assets situated outside India, depreciation is calculated on the basis of estimated useful life of that asset.

e. Intangibles

Research and Development Costs

Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised. Intangible assets are amortised over their respective useful life on straight line basis.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

f. Deferred Tax

Deferred Tax Assets & Liabilities arc recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets and liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset and liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

g. Leases

Finance teases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized al the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against expenditure Lease management fees, legal charges and other initial direct costs are capitalized.

Operating Lease: Office premises arc obtained on operating lease. The lease term vanes from 11 months to 36 months and is renewable for further period at the option of the company. Each lease agreement is bound by specific escalation clause. There is no restrictions imposed by lease agreements. There are no sub-lease,

h. Investments

Current investments are valued al lower of cost or fair market value. Long term investments are stated at cost less permanent diminution, if any, in value.

i. Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares - Lower of cost and net realizable value. Cost is determined on a weighted average basis.

Finished goods - Lower of cost and net realizable value. Cost includes direct materials and labour Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

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.

Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised on actual receipt of Dividend.

k. Foreign currency translation

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange transactions, other than those relating to fixed assets, are recognized in the profit and loss account.

l. Retirement benefits

i. The Company's liability on accrual basis towards retirement benefit in the form of Provident fund, gratuity and earned leave encashment are provided for and charged to revenue expenditure.

ii. The company contributes to the Employee Provident fund maintained under the EPF scheme of the Central Government

iii. The Gratuity liability is provided and charged off as revenue expenditure based on Actuarial valuation.

iv. Actuarial gains/losses at the lime of settlement are immediately taken to the profit and loss account and are not deferred.

m. Statutory Levies & Taxes

The Company follows mercantile system of accounting with respect to transactions in the normal course of business. However, with respect to the effect of the outcome of tax assessments, appeals & proceedings, the Company records the same on determination or completion & disposal.

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset & liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

n. Segment Reporting Policies

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 inter segment sales and transfers as if the sales or transfers were to third parties at current market prices.

o. Earnings Per Share

The basic earning per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed, as the Company has not issued any Dilute Potential Equity Shares.

p. Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.


Mar 31, 2010

A. Basis of preparation of financial statements

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

b. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

c. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other costs relating to the acquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets, until the date the assets are ready for use are capitalized and included in the cost of the asset.

d. Depreciation

Depreciation is provided on Straight Line method at the rates equal to the corresponding rates prescribed in Schedule XIV of the Companies Act, 1956. Proportionate depreciation is charged for additions / deletions during the year on the assets situated in India. For, Assets situated outside India, depreciation is calculated on the basis of estimated useful life of that asset.

Schedule XIV Rates (SLM)

Building 1.63%

Plant & Machinery 4.75%

Computers (included in plant and machinery) 16.21%

Furniture and Fixtures 6.33%

Vehicles 9.50%

e. Intangibles

Research and Development Costs: Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised. Intangible assets are amortised over their respective useful life on straight line basis.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

f. Deferred Tax

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets and liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset and liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

g. 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 lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against expenditure Lease management fees, legal charges and other initial direct costs are capitalised.

Operating Lease : Office premises are obtained on operating lease. The lease term varies from 11 months to 36 months and is renewable for further period at the option of the Company. Each lease agreement is bound by specific escalation clause. There is no restrictions imposed by lease agreements. There are no sub-lease.

h. Investments

Current investments are valued at lower of cost or fair market value. Long term investments are stated at. cost less permanent diminution, if any, in value.

i. Inventories

Inventories are valued as follows :

Raw materials, components, stores and spares : Lower of cost and net realizable value. Cost is determined on a weighted average basis.

Finished goods: Lower of cost and net realizable value. Cost includes direct materials and labour. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

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.

Sale of Goods : Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest: Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends: Revenue is recognised on actual receipt of Dividend.

k. Foreign currency translation

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the balance sheet date. Exchange differences in translation of foreign currency assets and liabilities and realized gains and losses on foreign exchange transactions, other than those relating to fixed assets, are recognized in the profit and loss account.

l. Retirement benefits

i. The Companys liability on accrual basis towards retirement benefit in the form of Provident fund, gratuity and earned leave encashment are provided for and charged to revenue expenditure.

ii. The Company contributes to the Employee Provident fund maintained under the EPF scheme of the Central Government.

iii. The Gratuity liability is provided and charged off as revenue expenditure based on Actuarial valuation.

iv. Actuarial gains / losses at the time of settlement are immediately taken to the profit and loss account and are not deferred.

m. Statutory Levies & Taxes

The Company follows mercantile system of accounting with respect to transactions in the normal course of business. However, with respect to the effect of the outcome of tax assessments, appeals & proceedings, the Company records the same on determination or completion & disposal.

Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization. The effect on deferred tax asset & liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

n. Segment Reporting Policies

Identification of segments: The Companys 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.

Intersegment Transfers : The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

o. Earnings Per Share

The basic earning per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the period. Diluted earnings per share have not been computed, as the Company has not issued any Diluted Potential Equity Shares.

p. Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X