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HOME   >  CORPORATE INFO >  NOTES TO ACCOUNT
Notes Of Account      
 
Year End: March 2016

1 ACCOUNTING STANDARDS COMPLIANCE

The financial statements have been brpared in accordance with the norms and principles brscribed in the Accounting Standards issued by the Institute of Chartered Accountants of India which are itemized below.

AS - 1 Disclosure of accounting policies

The Company is following accrual basis of accounting on a going concern concept and the policies applied are consistent with those applied in the brvious year.

AS - 2 Valuation of inventories

a Raw materials, components, stores and spares and other trading products are valued at cost determined on weighted average basis. Finished goods and traded goods are valued at the aggregate of material cost, applicable duties and overheads or net realizable value whichever is lower.

b Excise Duty in respect of finished goods lying within the factory are included in the valuation of inventories.

c Goods-In-Transit, both Raw materials and Traded items sent by supplier on FOB basis are recognized based on Confirmation received from the Vendor regarding the despatch of goods. Goods-in-Transit available at Bonded Warehouses are recognized based on Bond Statement / Confirmation from authorities.

d As per practice consistently followed, Customs Duty and Countervailing Duty payable on raw materials, components and finished goods lying in customs bonded warehouses is accounted for on deboning. Non-provision of this duty will not affect the profit for the year.

AS - 3 Cash Flow Statement

Cash Flow Statement has been brpared under "Indirect Method".

AS - 4 Contingencies and Events occurring after the Balance Sheet date

There are no contingencies and events after the Balance Sheet date that affect the financial position of the Company. Contested liabilities and outstanding bank guarantees are disclosed by way of a note.

AS - 6 Debrciation Accounting

This Standard is withdrawn from 30.03.2016 and is clubbed with Accounting Standard-10.

AS - 7 Construction Contracts

This Accounting Standard is not applicable.

AS - 8 Research and Development

This Accounting Standard is withdrawn.

AS - 9 Revenue Recognition

a Income and Expenditure are accounted on a going concern basis.

b The Company's income consists of income from;

i) sale of manufactured equipments,

ii) traded goods

iii) after sales service

iv) warranty management & repair services

v) information technology (IT) related consultancy services

vi) e-auction services

vii) distribution services

c Sale is accounted net of Excise Duty, Service Tax and Sales Tax / Value Added Tax.

i) Income from consultancy services and annual maintenance contracts are considered on accrual basis.

ii) Income from services is recognized after rendering services.

iii) Income from Information Technology solutions are recognised depending upon the stage of completion of the project. d Other income includes realised exchange fluctuation gain on Sale of products, Sale of services of Rs.117.99 lakhs (Previous

year Rs. 81.80 lakhs).

e Interest income is recognised on a time proportion basis taking into account the amount of outstanding and the rate applicable.

f Dividend Income will be recognised when the Company in which shares are held, declares the dividend and when the right to receive the same is established.

g In respect of domestic sale of manufactured and traded goods, income is recognised once the goods are delivered to the designated transporters of the customer or to transporters usually contracted by the Company. In respect of export sales income is recognized on the basis of "LET Export" certificate issued by Customs Authorities.

h As regards Income from distribution services, the income is recognized on delivery of goods to customers.

AS - 10 Property, Plant and Equipment

Fixed Assets are stated at cost of acquisition or construction cost net of CENVAT and includes expenditure incurred up to the date the asset is put to use, less accumulated debrciation.

Debrciation has been provided on Straight Line Method on the basis of useful life of the assets as brscribed by Schedule II to the Companies Act, 2013.

The useful life of the assets are arrived at by retaining 5% of the cost of asset as residual value except in the following where the residual value is arrived at on the basis of valuation:

On assets whose actual cost does not exceed Rs. 5,000 individually, debrciation has been provided at 100%. Useful life of Tools & Moulds and Office Equipments are estimated at 3 years based on technical valuation. In respect of Software, the useful life is estimated at 2 years.

Computers, Office Equipments, Furniture & Fixtures, Electrical Installations and Improvement to building taken on lease used in walk-in centres are debrciated over three years while the same category of assets in factory, branches, etc are debrciated as per Schedule II of the Companies Act, 2013.

Component Accounting

Useful life of the whole asset and part of the asset:

In respect of all debrciable assets, it was ascertained that useful life of part of the asset is not significantly different from the "whole of assets". Accordingly, measurement of debrciation is same for component asset and whole of the asset.

Lease hold land rebrsents Rs. 199.15 lakhs(Previous year Rs. 199.15 Lakhs) paid to State Industrial Promotion Corporation of Tamil Nadu Limited (SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special Economic Zone (SEZ), Tamil Nadu. The lease period is 99 years and accordingly the cost is amortised effective 1st April 2013.

During the year, cost of certain plant and equipment which were fully debrciated in earlier years and carried at NIL value in the books were removed with corresponding debit to accumulated debrciation reserve.

AS - 11 Effects of Changes in foreign exchange rates

a Purchase of imported raw materials, components, spare parts and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices / bills are yet to be received, the liability is accounted based on the market exchange rate brvailing on the date of the Balance Sheet.

b Year end foreign currency denominated liabilities and receivables are translated at exchange rates brvailing as at Balance Sheet date, the difference being charged/credited to respective revenue or capital account. Any difference between the forward rate and the exchange rate on the date of inception of forward contract is recognized as discount or brmium over the period of the contract .

c Other income includes realised exchange fluctuation gain on Sale of products, Sale of services of 7 117.99 lakhs (Previous year 7 81.80 lakhs).

AS - 12 Government Grants

The Company has not received any Government grants.

AS - 13 Accounting for Investments

All Investments are long term investments and are stated at cost.

Cost of investments held in TVS Shriram Growth Fund, Chennai as on 31st March 2016 - 7 36.34 lakhs (3634.345 units). The market value (NAV) of these units is 7 46.77 lakhs as on 31st December, 2015, as per the Account Statement provided by the Investee.

During the year, the company divested its entire shareholding of 7 90.73 Lakhs held in Modular InfoTech Private Ltd., Pune, for 7 280.16 Lakhs realising a gain of 7 189.43 Lakhs, which has been reported as an exceptional income.

AS - 14 Accounting for Amalgamation

This Standard is not applicable to the Company for the year under review

AS - 15 Employee benefits

As per Accounting Standard 15 on "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are furnished below :

(a) Short term Employee Benefits

Short term employee benefits payable within twelve months of rendering the service including accumulated leave encashment, at the Balance Sheet date, are recognised as an expense as per the Company's scheme based on expected obligations on undiscounted basis.

(b) Long term Employee Benefits

In case of long term compensated absences i.e. long term leave encashment, the same is provided for based on  actuarial valuation as at the Balance Sheet date, using the Projected Unit Credit Method.

Post retirement benefits comprising of employees Provident Fund and Gratuity Fund are accounted for as follows:

(a) Provident Fund : This is a defined contribution plan and contributions paid to the Regional Provident Fund Commissioner, Tambaram, Chennai-600045, are charged to revenue during the period. The Company has no further obligations for future provident fund benefits other than regular contributions.

(b) Gratuity : This is a defined benefit plan and the Company's Scheme is administered by Trustees and funds managed by the Life Insurance Corporation of India(LIC). The liability for Gratuity to employees as at the Balance Sheet date is determined based on the actuarial valuation and on the basis of demand from Life Insurance Corporation of India.The contribution paid thereof is charged in the books of accounts.

AS - 16 Borrowing costs

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalised. During the year under review there was no borrowing attributable to qualifying assets and hence no borrowing cost was capitalised.

AS - 17 Segment Reporting

The Company operates in two segments from 1st April, 2015 namely a) Information Technology related products and technical services and b) Distribution services. (Refer Note 26(20)).

AS - 18 Related Party disclosure

Disclosure is made as brscribed by the Institute of Chartered Accountants of India. AS - 19 Accounting for Leases

This Standard is not applicable as the Company does not have any lease transaction during the year.

AS - 20 - Earnings Per Share

Earnings per share (Basic and Diluted) has been calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period and disclosed on the face of statement of Profit and Loss in accordance with the Standard

AS - 26 Intangible Assets

The Company owns Intellectual Property Rights & Business Rights relating to its service business and the same is amortised over a period of ten years @ 9.5% per annum.

AS - 27 Financial Reporting of Interest in Joint Ventures

This Standard is not applicable to the Company for the year under review.

AS - 28 Impairment of Assets

As on the Balance Sheet date the carrying amounts of the assets net of accumulated debrciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the Company.

AS - 29 Provisions, Contingent Liabilities and Contingent Assets

Warranty cost on sale of products has been determined based on management estimates/ historical data and provided for - Rs. 354.84 Lakhs ( Previous Year - Rs. 280.08 Lakhs)

Contingent liabilities are disclosed in Note No. 4 and Contested liabilities are disclosed in Note No. 5 Contingent assets are neither recognised nor disclosed.

AS - 30 Financial Instruments : Recognition and Measurement

This Standard is not applicable.

AS - 31 Financial Instruments: Presentation

This Standard is not applicable.

AS - 32 Financial Instruments : Disclosures

This Standard is not applicable.

1. Previous year figures have been regrouped wherever necessary to confirm to current year's classification.

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