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विकर्स सिस्टम्स इंटरनैशनल

बीएसई: 505875  |  NSE: VICKERSYS  |  ISIN: INE762B01015  |  Pumps

खोजें विकर्स सिस्टम्स इंटरनैशनल कनेक्शन मार्च 09
लेखांकन नीति साल : मार्च '10
a) Basis of preparation
 
 The financial statements have been prepared to comply in all material
 respects with the Accounting Standards notified by Companies
 (Accounting Standards) Rules, 2006, (as amended) 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 are consistent with those used in the previous year.
 
 b) Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 period end. Although these estimates are based upon managements best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 c) Fixed Assets and Capital Work in Progress
 
 Fixed assets are stated at cost less accumulated depreciation and
 impairment losses if any. Cost comprises the purchase price and any
 attributable cost of bringing the asset to its working condition for
 its intended use. Capital work-in-progress comprises outstanding
 advances paid to acquire fixed assets, and the cost of fixed assets
 that are not yet ready for their intended use at the balance sheet
 date.
 
 ii) Assets costing up to Rs.5,000 are depreciated at the rate of 100 %
 in the year of acquisition
 
 iii) Leasehold improvements are amortised over the unexpired period of
 lease.
 
 e) Impairment
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal/external
 factors. An impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount. The recoverable amount is
 the greater of the assets net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value at the weighted average cost of capital.
 
 f) Intangible Assets
 
 Software Expenses
 
 Amounts paid towards acquisition of software are carried forward based
 on assessment of benefits arising from such expenditure. Such
 expenditure is amortized over the period of expected useful life
 ranging up to 36 months commencing from the date of acquisition of
 software.
 
 The period of amortisation is reassessed annually to ascertain
 reasonableness and appropriateness.
 
 g) Leases
 
 Where the Company is the lessee
 
 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 income. Lease
 management fees, legal charges and other initial direct costs are
 capitalised.
 
 If there is no reasonable certainty that the Company will obtain the
 ownership by the end of the lease term, capitalized leased assets are
 depreciated 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 Profit and Loss account on a straight-line basis over the lease
 term.
 
 Where the Company is the lessor
 
 Assets subject to operating leases are included in fixed assets. Lease
 income is recognized in the Profit and Loss Account on a straight-line
 basis over the lease term. Costs including depreciation are recognized
 as an expense in the Profit and Loss Account. Initial direct costs such
 as legal costs, brokerage costs etc. are recognized immediately in the
 Profit and Loss Account.
 
 h) Investments -Long Term
 
 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.
 
 I) Inventory
 
 Raw materials, components, 
 stores and spares              Lower of cost and net realizable value.
                                Cost being determined on First in first
                                out basis
                                (FIFO). 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.
 
 Work-in-progress and 
 finished goods                 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 being
                                determined on weighted average. Cost of
                                finished goods includes excise duty.
 
 Traded goods                   Lower of cost and net realizable value.
                                Cost being determined on First in first
                                out basis (FIFO).
 
 
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and to make the
 sale. Provision for obsolescence is determined based on management
 assessment and is charged to the Profit and Loss account.
 
 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 Manufactured & Traded Goods
 
 Revenue is recognized when the significant risks and rewards of
 ownership of the goods have been passed to the buyer. Excise Duty
 deducted from turnover (gross) are the amounts that are included in the
 amount of turnover (gross) and not the entire amount of liability
 arisen during the year.
 
 Income from sale of services
 
 Revenues from contracts are recognised pro-rata over the period of the
 contract as and when services are rendered.
 
 Interest
 
 Interest income is recognised on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 k) Borrowing Costs
 
 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. Borrowing costs consist of interest
 and other costs that an entity incurs in connection with the borrowing
 of funds.
 
 I) Foreign Currency Transaction
 
 i.  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.
 
 ii.  Conversion
 
 Foreign currency monetary items are reported using the closing rate.
 Non-monetary items which are carried in terms of historical cost
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transaction.
 
 iii.  Exchange Differences
 
 Exchange differences arising on the settlement of monetary items or on
 reporting companys monetary items at rates different from those at
 which they were initially recorded during the year, or reported in
 previous financial statements, are recognised as income or as expenses
 in the year in which they arise.
 
 iv.  Forward Exchange Contracts not intended fortrading or speculation
 purpose
 
 The premium or discount arising at the inception of forward exchange
 contracts is amortised as expense or income over the life of the
 contract. Exchange differences on such contracts are recognised in the
 statement of profit and loss in the year in which the exchange rates
 change. Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognised as income or as expense for the
 year.
 
 m) Retirement Benefits
 
 i. A retirement benefit in the form of Provident Fund is a defined
 contribution scheme and the contribution is charged to the Profit and
 Loss Account of the year when the contribution to the respective fund
 is due. There are no other obligations other than the contribution
 payable to the respective fund.
 
 ii. Gratuity liability and are defined benefit obligations and are
 provided for on the basis of an actuarial valuation on projected unit
 credit method made at the end of each financial year
 
 iii.  Short term compensated absences are provided for based on
 estimates. Long term compensated absences are provided for based on
 actuarial valuation. The actuarial valuation is done as per projected
 unit credit method iv.  Actuarial gains/losses are immediately taken to
 profit and loss account and are not deferred.
 
 n) Income Tax
 
 Tax expense comprises of current, deferred and fringe benefit tax.
 Current income tax and fringe benefit tax is measured at the amount
 expected to be paid to the tax authorities in accordance with the
 Income Tax Act, 1961, enacted in India. Deferred income taxes reflects
 the impact of current year timing differences between taxable income
 and accounting income for the year and reversal of timing differences
 of earlier years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets are recognised 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 realised. In situations
 where the company has unabsorbed depreciation or carry forward tax
 losses, all deferred tax assets are recognised only if there is virtual
 certainty supported by convincing evidence that they can be realised
 against future taxable profits.
 
 At each balance sheet date the Company re-assesses unrecognised
 deferred tax assets. It recognises unrecognised deferred tax assets to
 the extent that it has become reasonably certain or virtually certain,
 as the case may be that sufficient future taxable income will be
 available against which such deferred tax assets can be realized.
 
 The carrying amount of deferred tax assets are reviewed at each balance
 sheet date. The company writes-down the carrying amount of a 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
 
 MAT credit is recognized as an asset only when and to the extent there
 is convincing evidence that the company will pay normal income tax
 during the specified period. In the year in which the Minimum
 Alternative tax (MAT) credit becomes eligible to be recognized as an
 asset in accordance with the recommendations contained in guidance Note
 issued by the Institute of Chartered Accountants of India, the said
 asset is created by way of a credit to the profit and loss account and
 shown as MAT Credit Entitlement. The Company reviews the same at each
 balance sheet date and writes down the carrying amount of MAT Credit
 Entitlement to the extent there is no longer convincing evidence to the
 effect that Company will pay normal Income Tax during the specified
 period.
 
 o) Earnings Per Share
 
 Basic and diluted earnings per share are calculated by dividing the net
 profit or loss for the year attributable to equity shareholders by the
 weighted average number of equity shares outstanding during the year.
 
 p) Provisions, Contingent Liability and Contingent Assets
 
 A provision is recognized when an enterprise has a present obligation
 as a result of past event and; it is probable that an outflow of
 resources will be required to settle the obligation, in respect of
 which a reliable estimate can be made.  Provisions are not discounted
 to its present value and are determined based on best estimate required
 to settle the obligation at the balance sheet date. These are reviewed
 at each balance sheet date and adjusted to reflect the current best
 estimates.
 
 A contingent liability is disclosed, unless the possibility of an
 outflow of resources embodying economic benefits is remote. Contingent
 assets are not recognized in the financial statements.
 
 q) Cash & Cash Equivalents
 
 Cash and cash equivalents in the balance sheet comprise cash in hand,
 cash at bank and cheques in hand.
 
 r) Derivative Instruments
 
 As per the ICAI Announcement, accounting for derivative contracts,
 other than those covered under AS-11, are marked to market on a
 portfolio basis, and the net loss after considering the offsetting
 effect on the underlying hedge item is charged to the income statement.
 Net gains are ignored.
 
 s) Segment Reporting Policies
 
 Identification of segments:
 
 Business Segment :
 
 The entire operation is governed by the same set of risk and returns
 and hence considered as representing a single primary segment and not
 analyzed separately.
 
 Geographical Segment
 
 The analysis of geographical segments is based on the areas in which
 major operating divisions of the Company operate.
 
 t) Employee Stock Compensation Cost:
 
 Measurement and disclosure of the employee share-based payment plans is
 done in accordance with SEBI (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
 Accounting for Employee Share-based Payments, issued by the Institute
 of Chartered Accountants of India. The Company measures compensation
 cost relating to employee stock options using the intrinsic value
 method. Compensation expense is amortized over the vesting period of
 the option on a straight line basis.
स्रोत: रेलीगरे टेचनोवा

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