Annual Report 2012-2013 - UB Group

vii. Depreciation:
Notes to the Financial Statements (contd.)
Depreciation is provided under written down value method at the rates prescribed under Schedule XIV to the
Companies Act, 1956.
viii. Effects of changes in Foreign Exchange rates :
a. Transactions in foreign currencies are translated applying the following exchange rates:
In respect of export transactions, at the average exchange rate prevailing in the month preceding month in
which the transaction takes place.
In respect of all other transactions at the rate of exchange prevailing on the date of transaction.
b. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange
at the Balance Sheet date and the resultant gain or loss is recognized in Statement of Profit and Loss
except exchange differences arising on reporting of long term foreign currency monetary items which are
accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the
balance period of such long term asset/liability but not beyond March 31, 2020.
c. Non monetary items are carried at historical cost denominated in foreign currency and these are translated
using the exchange rate prevailing on the date of transaction.
ix. Accounting for Export benefits :
Export benefits available to the company are considered for inclusion in the accounts where there is reasonable
assurance that the Company will comply with the conditions attached to them and where such benefits have
been earned by the Company and it is reasonably certain that the ultimate collection will be made. Export
benefits of revenue nature are recognised in the Statement of Profit and Loss.
x. Investments :
i) Current investments refer to the investments that are readily realizable and intended to be held for not
more than a year.
ii) Trade investments refer to the investments made with the aim of enhancing the group’s business interest.
iii) Long term investments are stated at cost. All expenses relating to acquisition of investments are capitalized.
Diminution in the value of investments, if considered permanent, is provided for.
iv) Current investments are stated at lower of cost and fair value on the Balance Sheet date.
xi. Employee Benefits:
a) Defined-contribution plans :
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any
legal or informal obligation to pay additional sums. These comprise of contributions to the Employees’
Provident Fund, Superannuation Fund, Employees’ Pension Scheme and certain state plans like Employees’
State Insurance. The Company’s payments to the defined contribution plans are recognized as expenses
during the period in which the employees perform the services that the payment covers.
b) Defined-benefit plans:
Gratuity: The Company provides for gratuity, a defined benefit plan (Gratuity Plan), to certain categories of
employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on Projected
Unit Credit Method, and carried out by an independent actuary, at the Balance Sheet date. Actuarial Gains
and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are
recognized immediately in the Statement of Profit and Loss as income or expense.
c) 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 services are recognized as a liability at the present value of
the defined benefit obligation at the Balance Sheet date based on actuarial valuation carried out at each
Balance Sheet date.
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