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HOME   >  CORPORATE INFO >  NOTES TO ACCOUNT
Notes Of Account      
 
Year End: March 2015

Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory

Basis of accounting

 The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except as stated otherwise.

Disclosure of general information about company

Basis of accounting

 The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except as stated otherwise.

Disclosure of accounting policies explanatory

1. Basis of accounting

 The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except as stated otherwise.

2. Use of estimates

 The brparation of financial statements in conformity with Generally Accepted Accounting Principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known/ materialise.

3. Fixed Assets and debrciation

Fixed Assets are stated at their cost of acquisition or construction less accumulated debrciation and impairment losses. Cost comprises of all costs incurred tobring the assets to their location and working condition up to the date the assets are put to use. Expenditure incurred during construction period: Apart from costs related directly to the construction of an asset, indirect expenses incurred up to the date of commencement of commercial production which are incidental and related to construction are capitalised as part of the construction cost. Income, if any, earned during the construction period is deducted from the indirect costs.

Debrciation on assets is provided, pro-rata for the period of use, by the Straight Line Method (SLM) as brscribed in Part C of Schedule II to the Companies Act, 2013. Debrciation of assets purchased / sold during a period is proportionately charged. The Company capitalizes software where it is reasonably estimated that the software has an enduring useful life. Software is amortised over an estimated useful life of 3

years. Debrciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end.

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets, when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds it recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognised as an impairment loss in the profit and loss account.

4. Investments

 Investments are classified as current or long-term in accordance with Accounting Standard 13 on Accounting for Investments.

Current investments are stated at lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductions are charged or credited to the profit and loss account. Long-term investments are stated at cost. Provision is made to recognize a decline, other than temporary, in the value of such investments.

5. Revenue Recognition

 Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection. Revenue from service rendered is recognised at the time of completion of the services rendered, when all significant contractual obligations have been satisfied and the service is duly completed. Revenue excludes service tax, wherever recovered.

6. Inventories

Consumables, construction materials and stores andspares are valued at lower of cost and net realisable value.Obsolete, defective, unserviceable and slow/non-movin stocks are duly provided for.

7. Borrowing Costs

 Borrowing costs attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 – “Borrowing Costs” are capitalised as part of the cost of such asset up to the date when the asset is ready for its intended use. Other borrowing costs are expensed as incurred.

8. Employee Benefits

 Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations. Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions. The costs of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligations recognised in the balance sheet rebrsents the brsent value of the obligations as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the profit and loss account

9. Foreign Currency Transactions

 Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction.  Monetary foreign currency assets and liabilities are  translated into Rupees at the exchange rate brvailing at  the balance sheet date. Exchange differences relating to  long term monetary items, arising during the year, is so  far they relate to the acquisition of a debrciable capital asset are added to/deducted from the cost of the asset and debrciated over the remaining life of the asset. All exchange differences, are dealt with in the profit and loss account, except to the extent that they are regarded as an adjustment to interest costs and capitalized to fixed assets.

10. Income Tax

Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.Current tax is measured at the amount expected to be paid/recovered from the revenue authorities, using the applicable tax rates and laws. The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognised for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realised. Tax on distributed profits payable in accordance with the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as a tax on distribution of profits and is not considered in determination of profits for the year.

11. Earnings Per Share

 The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard 20 on Earnings per Share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year.Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

12. Operating leases

 Operating lease receipts and payments are recognized as income or expense in the profit and loss account on a straight-line basis, which is rebrsentative of the time pattern of the user’s benefit.

13. Cash Flow Statement

 The Cash Flow Statement is brpared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and brsents the cash flows by operating, investing and financing activities of the Company. Cash and Cash equivalents brsented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

14. Stock Based Compensation

The compensation cost of the stock options granted to employees is calculated using the intrinsic value of the stock options. The compensation expense is amortised uniformly over the vesting period of the option.

15. Provisions and Contingent liabilities

Contingent liabilities as defined in Accounting Standard 29 on Provisions, Contingent Liabilities and Contingent Assets are disclosed by way of notes to the accounts.

Provision is made if it is probable that an outflow of future economic benefits will be required for an item brviously dealt with as a contingent liability.

Disclosure of employee benefits explanatory

6.

EMPLOYEE BENEFITS

a)

Group contribution to provident fund is Rs. 13.51  million (March 31,2014: Rs. 9.91 million).

b)

Defined Benefit Plan

 

 

Gratuity (Funded)

Year ended

 

2014-15

2013-14

2012-13

2011-12

2010-11

a)

Liability recognized in the Balance Sheet

 i)  Present value of obligation

Opening Balance

12.89

                            11.33

                            7.06

                          4.90

                            3.59

Addition Due to Amalgamation

0.60

Service Cost

2.59

                              2.54

                            1.52

                          1.41

                            0.81

Interest Cost

1.25

                              0.93

                            0.61

                          0.40

                            0.48

Actuarial loss on obligation

4.39

                            (0.82)

                            2.56

                          0.78

                            0.43

Benefits paid

                       (2.41)

                            (1.09)

                         (0.42)

                       (0.43)

                          (0.41)

Closing Balance

19.31

12.89

11.33

7.06

4.90

Less:

ii) Fair Value of  Plan Assets

Opening Balance

13.53

                              9.70

                            7.44

                          4.99

                            3.73

Expected  Return on Plan assets less loss on investments

1.09

                              0.75

                            0.64

                          0.40

                            0.30

Actuarial gain / (loss) on Plan Assets

0.19

                              1.24

                            0.04

                          0.09

                            0.03

Employers' Contribution

2.05

                              2.93

                            1.98

                          2.00

                            1.33

Benefits paid

                       (2.41)

                            (1.09)

                         (0.41)

                       (0.04)

                          (0.40)

Fair Value of  Plan Assets

14.45

13.53

9.70

7.44

4.99

Amount recognized in Balance Sheet

2.05

                            (0.56)

                            1.61

                       (0.40)

                          (0.08)

b)

Expenses during the year

Service cost

2.59

                              2.53

                            1.52

                   1.41

                            0.98

Interest cost

1.25

                              0.93

                            0.61

                          0.40

                            0.31

Expected Return on Plan assets

0.70

                            (0.85)

                         (0.64)

                       (0.24)

                          (0.30)

Actuarial (Gain)/Loss

4.54

                            (2.07)

                            2.49

                          0.24

                            0.41

TOTAL

9.08

0.54

3.98

1.81

1.40

c)

Actual Return on plan assets

(Percentage or Value)

Insurer Managed Funds

100%

100%

100%

100%

100%

For principal acturial assumptions refer standalone financials of the Company and its subisdiaries

The Group expects to contribute Rs. 5.90 million to its gratuity plan for the next year.

In assessing the Company's post retirement liabilities the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC 2006-08 ultimate tables.

In the absence of detailed information regarding plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage or amount for each category to the total fair value of plan assets has not been disclosed.

The details of experience adjustment arising on account of plan assets and plan liabilities as required by paragraph 120(n)(ii) of AS 15 revised on "Employee Benefits" are not readily available in the valuation statement received from LIC and hence are not furnished.

 

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