Mar 31, 2018
1 Significant Accounting Policies
a Statement of compliance
The financial statements have been prepared in accordance with Ind ASâs notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
Upto the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer Note-2(q) for the details of first-time adoption exemptions availed by the Company.
The Company has not early applied the following Ind AS that has been issued but is not yet effective:
Ind AS 115 - Revenue from Contracts with Customers Effective for annual periods beginning on or after April 1, 2018.
Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related Interpretations when it becomes effective.
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer.
The amendments apply prospectively for annual periods beginning on or after April 1, 2018. The Company is still in the process of evaluating the impact of the above standard on the financial statements.
b Basis of preparation of financial statements
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given at the date of the transaction, in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability, c Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures directly attributable to the acquisition of the asset.
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
Depreciation has been provided on straight-line method. The estimated useful life which is in line with Schedule II to the Companies Act, 2013 (âthe Actâ) is set out herein below.
Plant & Machinery - 15 years Office Premises - 60 years
Office Equipments - 3 to 6 years Furniture and fixtures - 10 years Electrical Installations - 10 years Vehicles - 8 years
Assets costing less than â5000 are fully depreciated in the year of acquisition.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
d Intangible assets
Intangible assets are stated at their cost of acquisition, less accumulated amortisation and impairment losses. An intangible asset is recognised, where it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. The amortisable amount of intangible assets is allocated over the best estimate of its useful life on a straight-line basis. The estimated useful life and amortisation method are reviewed at the end of each reporting period.
The Company capitalises software costs where it is reasonably estimated that the software has an enduring useful life. Software is amortised over the managementâs estimate of its useful life of five years.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in the statement of profit and loss when the asset is derecognised.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of 1 April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
e Impairment of tangible and intangible assets
An asset is considered as impaired in accordance with Ind AS 36 on Impairment of Assets when at the 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 its recoverable amount (i.e. the higher of the assetâs 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 statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and loss. f Revenue recognition
Revenue is measured at fair value of the consideration received or receivable.
Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer. Revenue from services is recognized when the services are rendered.
Revenue is recognized when it is earned and there is no significant uncertainty as to determination/realization.
Interest income is accounted on accrual basis.
Dividend income is accounted for when the right to receive the same is established.
Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
g Inventories
Stock-in-trade are valued at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated cost of completion and cost necessary to make the sale.
Cost of inventories is determined by the weighted average cost method. Cost of inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to their present location and condition.
h Employee Benefits
Compensation to employees for services rendered is measured and accounted for in accordance with Ind AS 19 on Employee Benefits.
i. Short-term employee benefits
Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to statement of profit and loss in the period in which the service is rendered.
ii. Defined contribution plans
The Companyâs contribution to Provident Fund and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
iii. Defined benefit plans
Employee Benefits under defined benefit plans such as gratuity which fall due for payment after completion of employment are measured by the projected unit credit method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The Companyâs obligation recognised in the balance sheet represents the present value of obligations as reduced by the fair value of plan assets. Actuarial Gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest) are recognised immediately in other comprehensive income. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to statement of profit and loss. Past service cost is recognised in statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus on the Companyâs defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
iv. Other long-term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability on the basis of an independent actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
i Foreign currency transactions
Transactions in foreign currencies are recognised at the rates of exchange prevailing at the date of the transaction.
At the end of each reporting period, monetary items denominated in foreign currencies are restated at the rates prevailing at that date. Exchange differences on monetary items are recognised in statement of profit and loss in the period in which they arise.
j Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
k Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted at the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Corporate Dividend Tax
Tax on distributed profits payable in accordance with the provisions of Section 115-O 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 on profits and is not considered in determination of the profits of the Company.
l Earnings Per Share
The Company reports basic and diluted Earnings per Share (EPS) in accordance with Ind AS 33 on Earnings Per Share. Basic EPS is computed 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. Diluted EPS is computed 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 as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.
m Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease
Rental expense from operating leases is generally recognised on a straight line basis over the term of the relevant lease, Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognised in the year in which such expenses accrue.
n Cash Flow Statement
The Cash Flow Statement is prepared by the indirect method set out in Ind AS 7 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company.
Cash and Cash equivalents presented in the Cash Flow Statement consist of cash on hand and unencumbered bank balances.
o Provisions and contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). A contingent asset is neither recognised nor disclosed in the financial statements.
p Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through statement of profit and loss are recognised immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated at fair value through profit or loss on initial recognition):
- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
Fffective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in statement of profit and loss and is included in the âOther incomeâ line item.
Financial assets at FVTPI
Debt instruments that do not meet the amortised cost criteria or Fair value through other comprehensive income (FVTOCI) criteria are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in statement of profit and loss. The net gain or loss recognised in statement of profit and loss incorporates any dividend or interest earned on the financial asset and is included in the âOther incomeâ line item. Dividend on financial assets at FVTPL is recognised when the Companyâs right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Investment in Subsidiary
Investment in Subsidiary is carried at cost in the financial statements.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables and other contractual rights to receive cash or other financial asset.
For trade receivables and any contractual right to receive cash or another financial asset that result from transactions that are within the scope of IND AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under IND AS 109.
Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in statement of profit and loss except for those which are designated as hedging instruments in a hedging relationship.
Financial liabilities and equity instruments Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the statement of profit and loss. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Derivative financial instruments
The Company enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risks.
These contracts are initially recognised at fair value at the date the same are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit and loss immediately, unless the contract is designated and effective as a hedging instrument, in which event the timing of the recognition in statement of profit and loss depends on the nature of hedging relationship and the nature of the hedged item.
q First-time adoption :
i. Overall principle
The Company has prepared the opening balance sheet as at April 1, 2016 (the transition date) as per Ind AS by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the exemptions availed by the Company as per Ind AS 101 as detailed below.
ii. Past business combinations
The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of April 1, 2016.
iii. Deemed cost for property, plant and equipment and intangible assets
The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
r Critical accounting judgments and key sources of estimation uncertainty
In application of the Companyâs accounting policies, which are described in note 2, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Useful lives of property, plant and equipment
The Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. During financial years ended March 31, 2018, 2017 and 2016, there were no changes in useful lives of property plant and equipment and intangible assets. The company at the end of each reporting period, based on external and internal sources of information, assesses indicators and mitigating factors of whether a cash generating unit may have suffered an impairment loss. If it is determined that an impairment loss has been suffered, it is recognised in the Statement of Profit and Loss.
Impairment of trade receivables
The Company estimates the probability of collection of accounts receivable by analysing historical payment patterns, customer status, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
The mode of valuation of inventories has been stated in Note-2(g).
The cost of inventories recognised as an expenses includes Rs.550.81 Lakhs in respect of write-downs (net) of inventory to net realisable value, and has been reduced by Rs.93.80 Lakhs in 2016-17 in respect of reversal of such write-downs (net).
The average credit period on sales is 30 to 60 days. No interest is charged on overdue trade receivables.
A formal credit policy has been framed and credit facilities are given to customers within the framework of credit policy. As credit risk management mechanism, a policy for doubtful debts has been formulated and the risk exposure related to receivables is identified based on criterias mentioned in policy and provided in credit loss allowance. Of the trade receivable balances, customers who represents more than 5% of the total balance of trade receivables are set out as under:
Mar 31, 2016
Note: 1 Background of the Company
D-Link (India) Limited (the Company) is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company is primarily engaged in marketing and distribution of D-Link branded Networking products and has in the current year started to manufacture set top boxes and allied products. The Company operates through a distribution network with a wide range of product portfolio and solutions with a nationwide reach across India.
Note: 2 Significant Accounting Policies
a Basis of preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards prescribed under section 133 the Companies Act, 2013 (âthe Act") and the relevant provisions of the Act.
b Use of estimates
The preparation of the financial statements, in conformity with the generally accepted accounting principles, 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 revenues and expenses during the reporting year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialize.
c Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortization. d Depreciation and amortization i) Tangible assets
Depreciation is provided on the straight-line method as per the estimated useful life as prescribed in Schedule II to the Companies Act, 2013. Assets costing less than Rs. 5,000 each are fully depreciated in the year of acquisition.
Depreciation on additions and deletions during the year are charged on pro- rata basis.
ii) Intangible assets
Computer software is amortized over a period of five years.
e Impairment of assets
At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on ''Impairment of Assetsâ. An impairment loss is charged to the Statement of Profit and Loss in the period in which an asset is identified as impaired. The impairment loss recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
f Investments
Long-term (non-current) investments are carried at cost. Provision for diminution, if any, is made to recognize a decline, other than temporary, in the value of investments. Current investments are carried at lower of cost and fair value.
g Inventories
Items of inventory are valued at lower of cost and net realizable value; on the following basis.
i) Raw material - on weighted average basis.
ii) Finished goods - on the basis of absorption costing comprising of direct costs and overheads.
iii) Traded goods - on weighted average basis. h Revenue recognition
Revenue from sale of products is recognized net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods.
Revenue from services is recognized when the services are rendered.
Revenue is recognized when no significant uncertainty as to determination / realization exists.
Interest income is accounted on accrual basis.
Dividend income is accounted for when the right to receive the same is established. i Employee Benefits
Post-employment and other long-term benefits
i) Defined contribution plan
Contribution under Defined Contribution Plan in the form of Provident Fund is recognized in the Statement of Profit and Loss in the period in which the employee has rendered the service.
ii) Defined benefit and other long-term benefit plans
Companyâs liabilities towards defined benefit plans and other long term benefits viz. gratuity and compensated absences are determined on the basis of actuarial valuation being carried out at each balance sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period of occurrence of such gains and losses.
iii) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized undiscounted during the period the employee renders services.
j Foreign currency transactions
Transactions in foreign currencies are recorded at the rates of exchange in force at the time the transactions are affected. In case of forward exchange contracts, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortized as expense or income over the life of contract.
Gains / losses on settlement of transactions are recognized as income or expense.
At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange. Exchange difference arising thereon are accounted as income or expenses in the relevant year.
k Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.
l Taxes on income
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 to / recovered from the taxation authorities, using the applicable tax rates and tax 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. 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 realized.
Tax on distributed profits payable in accordance with the provisions of Section 115-O 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 on profits and is not considered in determination of the profits of the Company.
m Provisions and contingencies
Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.
During the previous year, the Company allotted 5,500,000/- Equity shares of Rs. 2/- each fully paid-up to the shareholders and promoters of TeamF1 Networks Private Limited (TeamF1) on preferential allotment basis for consideration other than cash (swap of 10,499 Equity shares held by the shareholders in TeamF1). Consequent to the said allotment, TeamF1 became a wholly owned subsidiary of the Company with effect from 29th May, 2014. The shares were issued at Rs. 30/- per Equity Share (including a premium of Rs. 28/- per Equity share).
Mar 31, 2015
A Basis of preparation of financial statements
The financial statements of the Company have been prepared 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 Accounting Rules, 2014 and the relevant provisions of the
Companies Act, 2013 (the Act).
b Use of estimates
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reporting year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/ materialise.
c Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
d Depreciation and amortisation
i) Tangible assets
Depreciation is provided on the straight-line method as per the useful
life prescribed in Schedule II to the Companies Act, 2013. Assets
costing less than Rs. 5,000 each are fully depreciated in the year of
acquisition.
Depreciation on additions and deletions during the year are charged on
pro-rata basis.
ii) Intangible assets
Computer software is amortised over a period of five years.
e Impairment of assets
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on 'Impairment of Assets'. An
impairment loss is charged to the Statement of Profit and Loss in the
period in which, an asset is identified as impaired, when the carrying
value of the asset exceeds its recoverable value. The impairment loss
recognised in the prior accounting periods is reversed if there has
been a change in the estimate of recoverable amount.
f Investments
Long-term (non-current) investments are carried at cost. Provision for
diminution, if any, is made to recognize a decline, other than
temporary, in the value of investments. Current investments are carried
at lower of cost and fair value.
g Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
h Revenue recognition
Revenue from sale of products is recognised net of returns and trade
discounts, on transfer of significant risks and rewards of ownership to
the buyer, which generally coincides with the delivery of goods.
Revenue from services is recognized when the services are rendered.
Interest income is accounted on accrual basis.
Dividend income is accounted for when the right to receive the same is
established.
Revenue (income) is recognized when no significant uncertainty as to
determination/realization exists.
i Employee Benefits
Post-employment and other long-term benefits
i) Defined contribution plan
Contribution under Defined Contribution Plan in the form of Provident
Fund is recognised in the Statement of Profit and Loss in the period in
which the employee has rendered the service.
ii) Defined benefit and other long-term benefit plans
Company's liabilities towards defined benefit plans and other long term
benefits viz. gratuity and compensated absences are determined using
the Projected Unit Credit Method. The liability is determined as a
differential amount on the basis of actuarial valuation being carried
out at each balance sheet date using Projected Unit Credit Method and
fund balance. Actuarial gains and losses are recognised in the
Statement of Profit and Loss in the period of occurrence of such gains
and losses. Past service cost is recognised as an expense on a straight
line basis over the average period until the benefits become vested. To
the extent the benefits are already vested immediately following the
introduction of, or changes to, a defined benefit plan, past service
cost is recognised immediately.
iii) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised undiscounted during the
period employee renders services. These benefits include performance
incentives.
j Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected. In case
of forward exchange contracts or other financial instruments that is in
substance a forward exchange contract, other than for trading or
speculation purposes, the premium or discount arising at the inception
of the contract is amortised as expense or income over the life of
contract. Gains / losses on settlement of transactions arising on
cancellation / renewal of forward exchange contracts are recognised as
income or expense. At the year-end, monetary items denominated in
foreign currency and the relevant foreign exchange contracts are
reported using the closing rate of exchange. Exchange difference
arising thereon and on realization / payments of foreign exchange are
accounted as income or expenses in the relevant year.
k Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
l Taxes on income
Current income-tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income-tax Act,1961. Deferred
income-tax reflect the current period timing differences between
taxable income and accounting income for the period and reversal of
timing differences of earlier years/period. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future income will be available except that deferred tax
assets in case there are unabsorbed depreciation and losses, are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same.
m Provisions and contingencies
Provision is recognised in the accounts when there is a present
obligation as a result of past event/s and it is probable that an
outflow of resources will be required to settle the obligation.
Contingent liabilities, if any are disclosed in the notes to the
financial statements.
Mar 31, 2014
Background of the Company
D-Link (India) Limited (the Company) is a subsidiary of D-Link Holding
Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company
is engaged in Marketing and Distribution of D-Link branded Networking
products in India and SAARC Countries. The Company operates through a
distribution network with a wide range of product portfolio and
solutions with a nationwide reach across India.
a Basis of preparation of financial statements
The financial statements have been prepared to comply with generally
accepted accounting principles in India, the Accounting Standards
notified in the Companies (Accounting Standard) Rules 2006 and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared in the format prescribed by the Revised
Schedule VI to the Companies Act, 1956.
b Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/ materialise.
c Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
ii) Intangible assets
Computer software is amortised over a period of five years.
e Impairment of assets
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets". An
impairment loss is charged to the Statement of Profit and Loss in the
period in which, an asset is identified as impaired, when the carrying
value of the asset exceeds its recoverable value. The impairment loss
recognised in the prior accounting periods is reversed if there has
been a change in the estimate of recoverable amount.
f Investments
Long-term (non-current) investments are carried at cost. However, when
there is a decline, other than temporary, the carrying amount is
reduced to recognize the decline. Current investments are carried at
lower of cost and fair value.
g Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
h Revenue recognition
Revenue from sale of products is recognised net of returns and trade
discounts, on transfer of significant risks and rewards of ownership to
the buyer, which generally coincides with the delivery of goods.
Revenue from services is recognized when the services are rendered.
Interest income is accounted on accrual basis.
Dividend income is accounted for when the right to receive the same is
established.
Revenue (income) is recognized when no significant uncertainty as to
determination/ realization exists.
i Employee Benefits
Post-employment and other long term benefits i) Defined contribution
Plan Contribution under Defined Contribution Plan in the form of Provident
Fund is recognised in Statement of Profit and Loss in the period in which
the employee has rendered the service.
ii) Defined benefit and other long term benefit plans
Company''s liabilities towards defined benefit plans and other long term
benefits viz. gratuity and compensated absences are determined using
the Projected Unit Credit Method. The liability is determined as a
differential amount on the basis of actuarial valuation being carried
out at each balance sheet date using Projected Unit Credit Method and
fund balance. Actuarial gains and losses are recognised in the
Statement of Profit and Loss in the period of occurrence of such gains
and losses. Past service cost is recognised as an expense on a straight
line basis over the average period until the benefits become vested. To
the extent the benefits are already vested immediately following the
introduction of, or changes to, a defined benefit plan, past service
cost is recognised immediately.
iii) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised undiscounted during the
period employee renders services. These benefits include performance
incentives.
j Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected. In case
of forward exchange contracts or other financial instruments that is in
substance a forward exchange contract, other than for trading or
speculation purposes, the premium or discount arising at the inception
of the contract is amortised as expense or income over the life of
contract. Gains/losses on settlement of transactions arising on
cancellation/renewal of forward exchange contracts are recognised as
income or expense. At the year-end, monetary items denominated in
foreign currency and the relevant foreign exchange contracts are
reported using the closing rate of exchange. Exchange difference
arising thereon and on realization/payments of foreign exchange are
accounted as income or expenses in the relevant year.
k Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
l Taxes on income
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income-tax Act,1961. Deferred
income tax reflect the current period timing differences between
taxable income and accounting income for the period and reversal of
timing differences of earlier years/period. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future income will be available except that deferred tax
assets in case there are unabsorbed depreciation and losses, are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same.
m Provisions and contingencies
Provision is recognised in the accounts when there is a present
obligation as a result of past event/s and it is probable that an
outflow of resources will be required to settle the obligation.
Contingent liabilities, if any are disclosed in the notes to the
financial statements.
Mar 31, 2013
A Basis of preparation of financial statements
The financial statements have been prepared to comply with generally
accepted accounting principles in India, the Accounting Standards
notified in the Companies (Accounting Standard) Rules 2006 and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared in the format prescribed by the Revised
Schedule VI to the Companies Act, 1956.
b Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/materialised.
c Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets Intangible assets are stated at cost less
accumulated amortisation. Computer software is amortised over a period
of five years.
d Depreciation
Depreciation is provided on the straight line basis at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956, except
for following assets
Asset Description Depreciated over
Office Premises 20 years
Plant and Machinery 5 years
Motor vehicles 5 years
Computers 4 years
Asset costing less than Rs. 5,000/- are depreciated @ 100%.
e Impairment of assets
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets".
An impairment loss is charged to the Statement of Profit and Loss in
the period in which, an asset is identified as impaired, when the
carrying value of the asset exceeds its recoverable value. The
impairment loss recognised in the prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
f Investments
Long-term (non-current) investments are carried at cost. However, when
there is a decline, other than temporary, the carrying amount is
reduced to recognize the decline. Current investments are carried at
lower of cost and fair value.
g Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
h Revenue recognition
Revenue (income) is recognized when no significant uncertainty as to
determination/ realization exists.
Revenue from sale of products is recognised net of returns and trade
discounts, on transfer of significant risks and rewards of ownership to
the buyer, which generally coincides with the delivery of goods.
Revenue from services is recognized when the services are rendered.
Interest income is accounted on accrual basis.
Dividend income is accounted for when the right to receive the same is
established.
i Employee Benefits
i. Provident fund liability is determined on the basis of contribution
as required under the statute/ rules.
ii. Provision for Gratuity is made on actuarial valuation done as at
the year end.
iii. Provision for Leave Encashment is made on actuarial valuation
done as at the year-end.
j Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected.
In case of forward exchange contracts or other financial instruments
that is in substance a forward exchange contract, other than for
trading or speculation purposes, the premium or discount arising at the
inception of the contract is amortised as expense or income over the
life of contract.
Gains / losses on settlement of transactions arising on cancellation /
renewal of forward exchange contracts are recognised as income or
expense.
At the year-end, monetary items denominated in foreign currency and the
relevant foreign exchange contracts are reported using the closing rate
of exchange. Exchange difference arising thereon and on realization /
payments of foreign exchange are accounted as income or expenses in the
relevant year.
k Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
l Taxes on income
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income-tax Act,1961. Deferred
income tax reflect the current period timing differences between
taxable income and accounting income for the period and reversal of
timing differences of earlier years/period. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future income will be available except that deferred tax
assets in case there are unabsorbed depreciation and losses, are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same.
m Provisions & Contingencies
Provision is recognised in the accounts when there is a present
obligation as a result of past event/s and it is probable that an
outflow of resources will be required to settle the obligation.
Contingent liabilities, if any are disclosed in the notes to the
financial statements.
Mar 31, 2012
A. Basis of preparation of financial statements
The financial statements have been prepared to comply in all material
aspect with applicable principles in India, the Accounting Standards
notified in the Companies (Accounting Standard) Rules 2006 and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared in the format prescribed by the Revised
Schedule VI to the Companies Act, 1956.
b. Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/materialised.
c. Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
Computer software is amortised over a period of five years.
d. Depreciation
Depreciation is provided on the straight line basis at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956, except
for following assets
Asset Description Depreciated over
Office Premises 20 years
Plant and Machinery 5 years
Motor vehicles 5 years
Computers 4 years
Asset costing less than Rs. 5,000/- are depreciated @ 100%.
e. Impairment of assets
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets". An
impairment loss is charged to the Statement of Profit and Loss in the
period in which, an asset is identified as impaired, when the carrying
value of the asset exceeds its recoverable value. The impairment loss
recognised in the prior accounting periods is reversed if there has
been a change in the estimate of recoverable amount.
f. Investments
Long-term (non-current) investments are carried at cost. However, when
there is a decline, other than temporary, the carrying amount is
reduced to recognize the decline. Current investments are carried at
lower of cost and fair value.
g. Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
h. Revenue recognition
Revenue (income) is recognized when no significant uncertainty as to
determination/realization exists.
i. Employee Benefits
i. Provident fund liability is determined on the basis of contribution
as required under the statute/rules.
ii. Provision for Gratuity is made on actuarial valuation done as at
the year end.
iii. Provision for Leave Encashment is made on actuarial valuation done
as at the year-end.
j. Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected. In
case of forward exchange contracts or other financial instruments that
is in substance a forward exchange contract, other than for trading or
speculation purposes, the premium or discount arising at the inception
of the contract is amortised as expense or income over the life of
contract.
Gains/losses on settlement of transactions arising on
cancellation/renewal of forward exchange contracts are recognised as
income or expense.
At the year-end, monetary items denominated in foreign currency and the
relevant foreign exchange contracts are reported using the closing rate
of exchange. Exchange difference arising thereon and on
realization/payments of foreign exchange are accounted as income or
expenses in the relevant year.
k. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
l. Taxes on income
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income-tax Act,1961. Deferred
income tax reflect the current period timing differences between
taxable income and accounting income for the period and reversal of
timing differences of earlier years/period. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future income will be available except that deferred tax
assets in case there are unabsorbed depreciation and losses, are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same. m. Contingent Liability
These, if any, are disclosed in the notes on financial statements.
Provision is made in the accounts if it becomes probable that an out
flow of resources embodying economic benefits will be required to
settle the obligation.
Mar 31, 2011
Basis of preparation of financial statements
The accounts have been prepared to comply in all material aspect with
applicable principles in India, the Accounting Standards notified in
the Companies (Accounting Standard) Rules 2006 and the relevant
provisions of the Companies Act, 1956.
Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/materialised.
Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
Computer software is amortised over a period of five years.
Depreciation
Depreciation is provided on the straight line basis at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956, except
for following assets
Asset Description Depreciated over
Office Premises 20 years
Plant and Machinery 5 years
Motor vehicles 5 years
Computers 4 years
Asset costing less than Rs. 5,000/- are depreciated @ 100%.
Impairment loss
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets". An
impairment loss is charged to the Profit and Loss account in the period
in which, an asset is identified as impaired, when the carrying value
of the asset exceeds its recoverable value. The impairment loss
recognised in the prior accounting periods is reversed if there has
been a change in the estimate of recoverable amount.
Investments
Current investments are carried at lower of cost and fair value. Long
term investments are carried at cost. However, when there is a decline,
other than temporary, the carrying amount is reduced to recognize the
decline.
Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
Revenue recognition
Revenue (income) is recognized when no significant uncertainty as to
determination/realization exists.
Employee Benefits
i. Provident fund liability is determined on the basis of contribution
as required under the statute/rules.
ii. Provision for Gratuity is made on actuarial valuation done as at
the year end.
iii. Provision for Leave Encashment is made on actuarial valuation
done as at the year-end.
Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected.
In case of forward exchange contracts or other financial instruments
that is in substance a forward exchange contract, other than for
trading or speculation purposes, the premium or discount arising at the
inception of the contract is amortised as expense or income over the
life of contract.
Gains/losses on settlement of transactions arising on
cancellation/renewal of forward exchange contracts are recognised as
income or expense.
At the year-end, monetary items denominated in foreign currency and the
relevant foreign exchange contracts are reported using the closing rate
of exchange. Exchange difference arising thereon and on
realization/payments of foreign exchange are accounted as income or
expenses in the relevant year.
Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
Taxes on income
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with Indian Income-tax Act,1961.
Deferred income tax reflect the current period timing differences
between taxable income and accounting income for the period and
reversal of timing differences of earlier years/period. Deferred tax
assets are recognised only to the extent that there is reasonable
certainty that sufficient future income will be available except that
deferred tax assets in case there are unabsorbed depreciation and
losses, are recognised if there is virtual certainty that sufficient
future taxable income will be available to realise the same. (refer
note 8 below).
Contingent Liability
These, if any, are disclosed in the notes on accounts. Provision is
made in the accounts if it becomes probable that an out flow of
resources embodying economic benefits will be required to settle the
obligation.
Mar 31, 2010
Basis of preparation of financial statements
The accounts have been prepared to comply in all material aspect with
applicable principles in India, the Accounting Standards notified in
the Companies (Accounting Standard) Rules 2006 and the relevant
provisions of the Companies Act, 1956.
Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in the year in
which the results are known/materialised.
Fixed assets
I) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
Computer software is amortised over a period of five years.
Depreciation
Depreciation is provided on the straight line basis at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956, except
Motor vehicles and Computers which are depreciated over a period of
five and four years respectively. Asset costing less than Rs.5,000/-
are depreciated @ 100%.
Impairment loss
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets". An
impairment loss is charged to the Profit and Loss account in the period
in which, an asset is identified as impaired, when the carrying value
of
the asset exceeds its recoverablevalue. The impairment loss recognised
in the prior accounting periods is reversed if there has been a change
in the estimate of recoverable amount.
Investments
Current investments are carried at lower of cost and fair value. Long
term investments are carried at cost. However, when there is a
decline, other than temporary, the carrying amount is reduced to
recognize the decline.
Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
Revenue recognition
Revenue (income) is recognized when no significant uncertainty as to
determination/realization exists.
Employee Benefits
i. Provident fund liability is determined on the basis of contribution
as required underthe statute/rules.
ii. Provision for Gratuity is made on actuarial valuation done as at
the period/year end.
iii. Provision for Leave Encashment is made on actuarial valuation
done as at the period/year-end.
Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected.
In case of forward exchange contracts or other financial instruments
that is in substance a forward exchange contract, other than for
trading or speculation purposes, the premium or discount arising at the
inception of the contract is amortised as expense or income over the
life of contract.
Gains / losses on settlement of transactions arising on cancellation /
renewal of forward exchange contracts are recognised as income or
expense. At the year-end, monetary items denominated in foreign
currency and the relevant foreign exchange contracts are reported using
the closing rate of exchange.
Exchange difference arising thereon and on realization / payments of
foreign exchange are accounted as income or expenses in the relevant
year.
Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
Taxes on income
Tax expense comprises of current tax, deferred tax and fringe benefits
tax. Current tax is measured at the amount expected to be paid to/
recovered from the tax authorities, using the applicable tax rates.
Deferred tax assets and liabilities are recognised for future tax
consequences attributable to timing differences between taxable income
and accounting income that are capable of reversal in one or more
subsequent years and are measured using relevant enacted tax rates.
The carrying amount of deferred tax assets at each Balance Sheet date
is reduced to the enacted tax rates. The carrying amount of deferred
tax assets at each Balance Sheet date is reduced to the extent that it
is no longer virtually certain that sufficient future taxable income
will be available against which the deferred tax asset can be realized.
Fringe benefits tax is recognized in accordance with the relevant
provisions of the Income-tax Act, 1961 and the Guidance Note on Fringe
Benefits Tax issued by the Institute of Chartered Accountants of India.
Tax on distributed profits is accounted in accordance with the
provisions of the Income Tax Act, 1961 and is disclosed in accordance
with the Guidance Note on Accounting for Corporate Dividend Tax issued
by the Institute of Chartered Accountants of India.
Mar 31, 2009
Basis of preparation of financial statements
The accounts have been prepared to comply in all material aspect with
applicable principles in India, the Accounting Standards notified in
the Companies (Accounting Standard) Rules 2006 and the relevant
provisions of the Companies Act, 1956.
Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, 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 revenues and expenses during the reported year. Differences
between the actual results and estimates are recognised in theyear in
which the results are known/materialised.
Fixed assets
i) Tangible assets
Tangible fixed assets are carried at cost of acquisition or
construction less accumulated depreciation and impairment loss, if any.
ii) Intangible assets
Intangible assets are stated at cost less accumulated amortisation.
Computer software is amortised over a period of ten years.
Depreciation
Depreciation is provided on the straight line basis at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956, except
Motor vehicles and Computers which are depreciated over a period of
five and four years respectively.
Impairment loss
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets". An
impairment loss is charged to the Profit and Loss account in the period
in which, an asset is identified as impaired, when the carrying value
of the asset exceeds its recoverable value. The impairment loss
recognised in the prior accounting periods is reversed if there has
been a change in the estimate of recoverable amount.
Investments
Current investments are carried at lower of cost and fair value. Long
term investments are carried at cost. However, when there is a decline,
other than temporary, the carrying amount is reduced to recognize the
decline.
Inventories
Traded goods are valued at lower of cost and net realisable value, on
weighted average basis.
Revenue recognition
Revenue (income) is recognized when no significant uncertainty as to
determination/ realization exists.
Employee Benefits
i. Provident fund liability is determined on the basis of contribution
as required under the statute/ rules.
ii. Provision for Gratuity is made on actuarial valuation done as at
the year end.
iii. Provision for Leave Encashment is made on actuarial valuation
done as at theyear-end.
Foreign currency transactions
Transactions in foreign currencies are recorded at the original rates
of exchange in force at the time the transactions are effected.
In case of forward exchange contracts or other financial instruments
that is in substance a forward exchange contract, other than for
trading or speculation purposes, the premium or discount arising at the
inception of the contract is amortised as expense or income overthe
life of contract.
Gains / losses on settlement of transactions arising on cancellation /
renewal of forward exchange contracts are recognised as income
orexpense.
At the year-end, monetary items denominated in foreign currency and the
relevant foreign exchange contracts are reported using the closing rate
of exchange. Exchange difference arising thereon and on realization /
payments of foreign exchange are accounted as income or expenses in the
relevant year.
Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part ofthe cost
ofsuch assets. A qualifying asset is one that necessarilytakes a
substantial period of time to get readyfor its intended use. All other
borrowing costs are charged to revenue.
Taxes on income
Tax expense comprises of current tax, deferred tax and fringe benefits
tax. Current tax is measured at the amount expected to be paid to/
recovered from the tax authorities, using the applicable tax rates.
Deferred tax assets and liabilities are recognised for future tax
consequences attributable to timing differences between taxable income
and accounting income that are capable of reversal in one or more
subsequent years and are measured using relevant enacted tax rates.
The carrying amount of deferred tax assets at each Balance sheet date
is reduced to the extent that it is no longer virtually certain that
sufficient future taxable income will be available against which the
deferred tax asset can be realized. Fringe benefits tax is recognized
in accordance with the relevant provisions of the Income-tax Act, 1961
and the Guidance Note on Fringe Benefits Tax issued by the Institute of
Chartered Accountants of India.
Contingent Liability
These, if any, are disclosed in the notes on accounts. Provision is
made in the accounts if it becomes probable that an out flow of
resources embodying economic benefits will be required to settle the
obligation.