Mandatory Accounting Standards

IndexSR.NOTopicPAGE

1Acknowledgements2

2Preface/Executive Summary3

3Indian Accounting Standards4

4Introduction to Marico9

5Maricos Products10

6Accounting Standards used by Marico11

7Introduction to Cipla 18

8Accounting Standards used by Cipla19

9Introduction to TATA Consultancy Services24

10Accounting Standards used by TCS25

11Bibliography & Credits26

Acknowledgements

I would sincerely like to thank my Project Guide & Teacher Mr.L.N Chopde for his guidance on the project & his tireless efforts on helping us with the project.Thank your sir for valuable time and effort spent with us for making our project what it is today.

Preface/ Executive SummaryThe objective of this project was to find out and ascertain the different mandatory accounting standards that are used by companies and show their application in real life.We have here on enlisted a few of the mandatory accounting standards and explained them in short.We have then chosen 3 accounting standards they are as follows:1. AS-1: Disclosure of Accounting policies.2. AS-2: Valuation of Inventories.3. AS-6: Depreciation Accounting.And shown their application in 3 companies namely 1. Marico ltd2. Tata consultancy services3. Cipla The information was collected from their respective balance sheets and notes to the balance sheet where the application of these standards has been enlisted.We have then presented and tabulated the data in the project as required.

Indian Accounting StandardsIndian Accounting Standards, (abbreviated asInd AS) are a set of accounting standards notified by theMinistry of Corporate Affairswhich are converged withInternational Financial Reporting Standards(IFRS). These accounting standards are formulated by Accounting Standards Board of Institute of Chartered Accountants of India. Now India will have two sets of accounting standards viz. existing accounting standards under Companies (Accounting Standard) Rules, 2006 andIFRSconverged Indian Accounting Standards (Ind AS). The Ind AS are named and numbered in the same way as the corresponding IFRS.NACASrecommend these standards to theMinistry of Corporate Affairs. The Ministry of Corporate Affairs has to spell out the accounting standards applicable for companies in India. As on date theMinistry of Corporate Affairsnotified 35 Indian Accounting Standards (Ind AS). But it has not notified the date of implementation of the same.The Accounting Standards are listed below:AS 1: Disclosure of Accounting PoliciesAS 2: Valuation of InventoriesAS 3: Cash Flow StatementsAS 4: Contingencies and Events Occurring after the Balance Sheet Date AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting PoliciesAS 6: Depreciation AccountingAS 7: Construction ContractsAS 8: Accounting for Research and Development (Withdrawn pursuant to AS 26 becoming mandatory)AS 9: Revenue RecognitionAS 10: Accounting for Fixed AssetsAS 11: The effects of Changes in Foreign Exchange RatesAS 12: Accounting for Government GrantsAS 13: Accounting for InvestmentsAS 14: Accounting for AmalgamationsAS 15: Employee BenefitsAS 16: Borrowing CostsAS 17: Segment ReportingAS 18: Related Party DisclosuresAS 19: LeasesAS 20: Earnings Per ShareAS 21: Consolidated Financial StatementsAS 22: Accounting for Taxes on IncomeAS 23: Accounting for Investments in Associates in Consolidated Financial StatementsAS 24: Discontinuing OperationsAS 25: Interim Financial ReportingAS 26: Intangible AssetsAS 27: Financial Reporting of Interests in Joint VenturesAS 28: Impairment of AssetsAS 29: Provisions, Contingent Liabilities and Contingent AssetsAS 30: Financial Instruments: Recognition and MeasurementAS 31: Financial Instruments: Presentation

Accounting Standard 1: Disclosure of Accounting PoliciesThe objective of financial statements is to provide information about the financial position, performance and cash flows of an enterprise that is useful to a wide range of users, in making economic decisions. Financial statements portray the effect of past events and transactions. Accounting policies and methods adopted by an enterprise, in turn, influence the effect of past events and transactions. Users must be able to compare the: Financial statements of any one enterprise through time so that trends and movements in performance and position can be identified, and

Status of different enterprises for an evaluation of relative financial position and performance. The disclosure by an entity of its accounting policies, enable users to- understand the past extrapolate to the future A critical qualitative characteristic of comparability is that users be informed of not merely the accounting principles and methods adopted by the enterprises, but the changes in such policies introduced and the monetary effect of such changes, as well. This standard deals with the disclosure of significant accounting policies followed in preparation and presentation of financial statements. The purpose is to promote a better understanding of financial statements by establishing through an Accounting Standard (AS), a mandatory requirement that all significant accounting policies ought to be disclosed as also the manner in which such accounting policies are to be disclosed in the financial statements.

Accounting Standard 2: Valuation of Inventories This standard should be applied in accounting for inventories other than WIP arising under construction contracts, WIP of service providers, shares, debentures and financial instruments held as stock in trade, producers inventories of livestock, agricultural and forest products and mineral oils, ores and gases to the extent measured at net realisable value in accordance with well-established practices in those industries. Inventories are assets held for sale in ordinary course of business, in the process of production of such sale, or in form of materials to be consumed in production process or rendering of services. Inventories do not include machinery spares which can be used with an item of fixed asset and whose use is irregular. Net realisable value is the estimated selling price less the estimated costs of completion and estimated costs necessary to make the sale. Cost of inventories should comprise all costs incurred for bringing the inventories to their present location and condition. Inventories should be valued at lower of cost and net realisable value. Generally, weighted average cost or FIFO method is used in cases where goods are ordinarily interchangeable. Specific Identification Method to be used when goods are not ordinarily interchangeable or have been segregated for specific projects. Disclose the accounting policies adopted including the cost formula used, total carrying amount of inventories and its classification.

Accounting Standard 6: Depreciation Accounting

Depreciationis a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, passage of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortisation of assets whose useful life is predetermined.The depreciable amount of a depreciable asset should be allocated on a systematic basis to each accounting period during the useful life of the asset.Depreciable assets are assets which:[1] Are expected to be used during more than one accounting period; and[2] Have a limited useful life; and[3] Are held by an enterprise for use in the production or supply or for administrative purposes.

Introduction to MaricoThe Company was incorporated on 13th October 1988, under the name of Marico Foods LtdMarico is one of India's leading Consumer Products & Services companies in the global beauty and wellness space. From its foundations, Marico has worked outside the box, to bring innovation to its customers through the careful creation of continuous and sustainable change.Today, 1 out of 4 Indians uses a Marico product. From cooking oil with 'LoSorb Technology', to rice that keeps you active, personalised skins cription services and hair oil that comes with a battery-powered head massager, Marico believes that it pays to think differently. At thier offices, everyone is a member, not an employee. They have a flat organisational structure, with just five levels between the Managing Director and the shop floor operator. We believe in transforming the lives of all stakeholders be it our suppliers, farmers, distributors or shareholders by helping them maximise their true potential and it truly articulates the true Mariconian spirit to be more. Every day.Marico is present in more than 25 countries across Asia and the African continent. The company recorded a turnover of Rs. 31.3 billion (~USD 695 Million) in 2010-11.Thier vast portfolio of enduring brands such as Parachute Advansed, Saffola, Hair & Care, Nihar, Mediker, Revive and Manjal are leading household names today. In addition , the company has recently acquired the erstwhile personal care business from Reckitt Benckiser. Marico now owns popular brands like Set Wet, Livon, Zatak , and other personal care brands thereby strengthening its portfolio for the youth and creating a significant presence in the male grooming and post hair wash segments. Marico's international portfolio includes brands like Fiance, Haircode, Camelia, Aromatic, Caivil, Hercules, Black Chic, Code 10 and Ingwe. We are also present in the Skin Care Solutions segment through Kaya Skin Clinics in India, Middle East and Bangladesh and Derma Rx in Singapore. Their consumers transcend countries and customs. They are a company that believes in challenging the status quo, to create growth and continuity in change. ACHIEVEMENTS1.One out of 10 best retailers2.Brand leadership award at brand summit 20063.Kaya- best retailer in beauty and fitness category4.Maricos Saffola heart day campaign won bronze at Asia pacific effie Singapore 2008

Maricos ProductsOver the past 20 years, Marico has been continually improvising and building new brands. Marico's Consumer Products Business houses well-known brands such as Parachute, Saffola, Hair & Care, Nihar, Mediker, Revive, among others, which occupy leadership positions in most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible Oils, niche Fabric Care etc. With the acquisition of the erstwhile personal care business from Reckitt Benckiser Marico now owns popular brands like Set Wet, Livon, Zatak , and other personal care brands thereby strengthening its portfolio for the youth and creating a significant presence in the male grooming and post hair wash segments. Every month, over 70 Million consumer packs from Marico reach approximately 130 Million consumers in about 23 Million households, through a widespread distribution network of more than 2.5 Million outlets in India and overseas.Marico's branded products are present in Bangladesh, other SAARC countries, the Middle East, Egypt, Malaysia and South Africa. The Overseas Sales franchise of Marico's Consumer Products (whether as exports from India or as local operations in a foreign country) is one of the largest amongst Indian Companies and is entirely in branded products and services.

Accounting Standards Used By MaricoFrom the various accounting standards listed previously, we have chosen 3 standards. They are as follows:4. AS-1: Disclosure of Accounting policies.5. AS-2: Valuation of Inventories.6. AS-6: Depreciation Accounting.

1. AS-1: Disclosure of Accounting Policies:

Few provisions of the mandatory accounting policies are:(a) Basis of preparation of financial statementsThe financial statements are prepared in accordance with the Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention on an accrual basis, except for certain financial instruments which are measured at fair values and are in conformity with mandatory accounting standards, as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI).All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956.(b) Use of estimatesThe preparation of the financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, the useful lives and provision for impairment of fixed assets and intangible assets.Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results could differ from these estimates.(c) Investments(i) Long term investments are valued at cost. Provision for diminution, if any, in the value of investments is made to recognise a decline in value, other than temporary.(ii) Current investments are valued at lower of cost and fair value, computed individually for each investment. In case of investments in mutual funds which are unquoted, net asset value is taken as fair value. (d) Revenue recognition(i) Domestic sales are recognised at the point of dispatch of goods to the customers, which is when substantial risks and rewards of ownership passed to the customers, and are stated net of trade discounts, rebates, sales tax, value added tax and excise duty,(ii) Export sales are recognised based on the date of bill of lading except, sales to Nepal which are recognised when the goods cross the Indian territory, which is when substantial risks and rewards of ownership passed to the customers.(iii) Revenue from services is recognised on rendering of services.(iv) Interest and other income are recognised on accrual basis.(v) Income from export incentives such as premium on sale of import licences, duty drawback etc. are recognised on accrual basis to the extent the ultimate realisation is reasonably certain.(vi) Dividend income is recongnised when right to receive dividend is established.(vii) Revenue from royalty income is recognised on accrual basis. (e) Foreign currency transactions(i) Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realized gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.(ii) Foreign currency monetary assets and liabilities at the year end are translated at the year end exchange rates and the resultant exchange differences except those qualifying for hedge accounting are recognised in the Statement of Profit and Loss.(iii) In case of forward contracts with underlying assets or liabilities, the difference between the forward rate and the exchange rate on the date of inception of a forward contract is recognised as income or expense and is amortised 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 they arise. Any profit or loss arising on cancellation or renewal of forward exchange contracts are recognised as income or expense for the period.(iv) The Company uses forward and options contracts to hedge its risks associated with foreign currency transactions relating to certain firm commitments and forecasted transactions. The Company also uses Interest rates swap contracts to hedge its interest rate risk exposure. The Company designates these as cash flow hedges. These contracts are marked to market as at the year end and resultant exchange differences, to the extent they represent effective portion of the hedge, are recognised directly in 'Hedge Reserve'. The ineffective portion of the same is recognised immediately in the Statement of Profit and Loss.(v) Exchange differences taken to Hedge Reserve account are recognised in the Statement of Profit and Loss upon crystallization of firm commitments or occurrence of forecasted transactions or upon discontinuation of hedge accounting resulting from expiry / sale / termination of hedge instrument or upon hedge becoming ineffective.(vi) Non-monetary foreign currency items are carried at cost / fair value and accordingly the investments in shares of foreign subsidiaries are expressed in Indian currency at the rate of exchange prevailing at the time when the original investments are made or fair values determined.(vii) Exchange differences arising on monetary items that in substance form part of Company's net investment in a non-integral foreign operation are accumulated in a 'Foreign Currency Translation Reserve' until the disposal of the net investment. The same is recognised in the Statement of Profit and Loss upon disposal of the net investment.(f) Accounting for taxes on income(i) Provision for current tax is made, based on the tax payable under the Income Tax Act, 1961. Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income tax Act, 1961) over normal income-tax is recognised as an asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of ten succeeding assessment years.(ii) Deferred tax on timing differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets on unabsorbed tax losses and unabsorbed tax depreciation are recognised only when there is a virtual certainty of their realisation. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation. (g) Employee Stock Option PlanIn respect of stock options granted pursuant to the Company's Employee Stock Option Scheme, the intrinsic value of the options (excess of market value of shares over the exercise price of the option at the date of grant) is recognised as Employee compensation cost over the vesting period.

(h) Provisions and Contingent LiabilitiesContingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision is not discounted and is determined based on best estimate required to settle the obligation at the year-end date. Contingent Assets are not recognised or disclosed in the financial statements.(i) Share issue ExpensesExpenses incurred on issues of shares are adjusted against Securities Premium Reserve.(j) Cash and Cash EquivalentsIn the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.2. AS-2: Valuation of Inventories.

(a)Inventories(i) Raw materials, packing materials, stores and spares are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products in which they will be used are expected to be sold at or above cost.(ii) Work-in-process, finished goods and stock-in-trade (traded goods)are valued at lower of cost and net realizable value.(iii) By-products and unserviceable / damaged finished goods are valued at estimated net realizable value.(iv) Cost is ascertained on weighted average method and in case of work-in-process includes appropriate production overheads and in case of finished goods includes appropriate production overheads and excise duty, wherever applicable.

3. AS-6: Depreciation Accounting.

Tangible assets, intangible assets and capital work-in-progressTangible assets and intangible assets are stated at cost of acquisition, less accumulated depreciation/amortisation and impairments, if any. Cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation. Borrowing costs attributable to acquisition, construction of qualifying asset are capitalised until such time as the assets are substantially ready for their intended use. Other pre-operative expenses for major projects are also capitalised, where appropriate.Capital work-in-progress comprises cost of fixed assets that are not yet ready for their intended use at the year end.(a) Depreciation and amortisationI. Tangible assets(i) Depreciation is provided at higher of the rates based on useful lives of the assets as estimated by the management or those stipulated in Schedule XIV to the Companies Act, 1956. The depreciation rates considered for the following items are higher than the rates stipulated in Schedule XIV to the Companies Act, 1956:(ii) Depreciation on factory building and plant and equipment (other than items specified in (i) above) is provided on written down value basis. Depreciation on all other assets is provided on straight line basis.(iii) Extra shift depreciation is provided on "Plant" basis.(iv) Assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition.(v) Leasehold land is amortised over the primary period of the lease.(vi) Fixtures in leasehold premises are amortised over the primary period of the lease.(vii) Depreciation on additions / deletions during the year is provided from the month in which the asset is capitalised / up to the month in which the asset is disposed off.A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management.II. Intangible assetsIntangible assets are amortised on a straight line basis at the rates based on estimated useful lives of respective assets, but not exceeding the rates given here under:

A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management.

Introduction to Cipla

Cipla was established in 1935 with the vision of making India self-reliant and self-sufficient in healthcare. Today, we are one of the worlds largest generic pharmaceutical companies with a presence in over 170 countries. We are renowned for making affordable, world-class medicines that meet the needs of patients across therapies. We also offer services like consulting, commissioning, plant engineering, technical know-how transfer and support.Founder, Dr. K. A. Hamid, set up an enterprise with the vision to make India self-sufficient in healthcare. Over the past 77 years, we have emerged as one of the worlds most respected pharmaceutical names, not just in India but worldwide.

We have 34 state-of-the-art manufacturing facilities that make Active Pharmaceutical Ingredients (APIs) and formulations, which have been approved by major international Regulatory Agencies. We have over 2000 products in 65 therapeutic categories; with over 40 dosage forms, covering a wide spectrum of diseases ranging from communicable, non-communicable, common and emerging diseases to even rare diseases.

Our Research and Development (R&D) center is focused on developing innovative products and drug delivery systems, giving the country and the world many Firsts'.

Today, we are one of the worlds largest generic pharmaceutical companies with a strong presence in over 170 countries. We maintain world-class quality across all our products and services.

Whether its for millions or for just a few hundreds, our journey to care for all humanity continues.

Accounting Standards Used By CiplaFrom the various accounting standards listed previously, we have chosen 3 standards. They are as follows:1. AS-1: Disclosure of accounting policies.2. AS-2: Valuation of Inventories.3. AS-6: Depreciation Accounting.

1. AS-1: Disclosure of Accounting Policies:

Few provisions of the mandatory accounting policies are:

(a)Basis of PreparationThe financial statements are prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 issued under section 211(3C) of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in preparation of the financial statements are consistent with those of the previous year. During the financial year ended 31st March 2012 the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company, for preparation and presentation of its financial statements. The Company has also re-classified the previous year figures in accordance with the requirements applicable in the current year.

(b) Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods.

(c) InvestmentsLong term investments are stated at cost, less provision for diminution (other than temporary) in value.Current investments are stated at lower of cost or fair value.

(d) Revenue Recognition

(i). Revenue is recognized to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(ii). Revenue from sale of goods is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, which ordinarily coincides with dispatch of goods to customers. Revenues are recorded at invoice value, net of sales tax, returns and trade discounts.(iii). Revenue from rendering of services are recognized on completion of services.(iv). Benefits on account of entitlement of export incentives are recognized as and when the right to receive is established.

(v). Technical Know-how/Fees are recognized as and when the right to receive such income is established as per terms and conditions of relevant agreement.

(vi). Interest income is recognized on time proportion basis.

(vii). Dividend income is recognized when the right to receive is established.

(e) Foreign Exchange Transactions

(i). Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets & liabilities and forward contracts are restated at year end exchange rates. Exchange differences arising on the settlement of foreign currency monetary items or on reporting Companys foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements, are recognised as income or expense in the year in which they arise.

(ii). Non-monetary foreign currency items are carried at the rates prevailing on the date of the transaction. In respect of forward contracts, the premium or discount on these contracts is recognised as income or Expenditure over the period of the contract. Any profit or loss arising on cancellation or renewal of such Contracts is recognised as income or expense of the year.

(iii). Foreign branches are identified as integral foreign operations. All transactions are transferred at rates prevailing on the date of transaction. Monetary assets and liabilities of the branch are restated at the year-end rates.

(f)Provisions, Contingent Liabilities and Contingent Assets

(i). A provision is recognised when the Company has a present obligation as a result of a past event, 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.

(ii). A disclosure of contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

(iii). Contingent assets are neither recognised nor disclosed in the financial statements.

(g)Income Tax(i). Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of local Income Tax Laws as applicable to the financial year.

(ii). Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income of 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.

(iii). The Company offsets, on a year-on-year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.2. AS-2: Valuation of Inventories.

(a)Inventories: Valuation of Inventories

(i). Raw materials and Packing materials are valued at lower of cost or net realizable value after providing for obsolescence, if any. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.(ii). Work-in-process and finished goods are valued at lower of cost or net realizable value. Finished goods and work-in-process include costs of raw material, labour, conversion costs and other costs incurred in bringing the inventories to their present location and condition.(iii). Cost of finished goods includes excise duty, wherever applicable.

(iv). Cost of inventories is computed on weighted average basis.3. AS-6: Depreciation Accounting.

(a)Fixed Assets(i). Fixed Assets are stated at cost of acquisition (net of recoverable taxes and Government grants and other subsidies, wherever availed) or construction or other amounts substituted for historical costs on revaluation less accumulated depreciation. Where several fixed assets are acquired for consolidated price, the consideration is apportioned to fixed assets on fair value basis.

(b) Depreciation(i). Depreciation on fixed assets is provided on the Straight Line Method at the rates and in the manner(ii). Prescribed under Schedule XIV of the Companies Act, 1956.

(iii). All individual items of fixed assets, where the actual cost does not exceed `5000 have been written off entirely in the year of acquisition.

(iv). Cost of leasehold land including premium is amortized over the primary period of lease.

TATA Consultancy ServicesTata Consultancy Services started in 1968. Mr.F.C Kohli who is presently the Deputy Chairman was entrusted with the job of steering TCS. The early days marked TCS responsibility in managing the punch card operations of TISCO.The company, which was into management consultancy from day one, soon felt the need to provide solutions to its clients as well. TCS was the first Indian company to make forays into the US market with clients ranging fromIBM,American Express, Segaetc. TCS is presently the top software services firm inAsia.During theY2Kbuild up, TCS had setup an Y2Kfactory in Chennai as a short-term strategy. Now, withE-businessbeing the buzzword, the factory is developing solutions for the dotcom industries. TCS has great training facilities. It benchmarked its quality standing, invested heavily in software engineering practices and built intellectual property-in terms ofpatents, codeandbranded products.At the same time, it expanded its relationships with technology partners and organisations, increasedlinkages with academic institutionsand incubated technologies and ideas of people within TCS and outside.

Accounting Standards at TCSFrom the various accounting standards listed previously, we have chosen 3 standards. They are as follows:1. AS-1: Disclosure of accounting policies.2. AS-2: Valuation of Inventories.3. AS-6: Depreciation Accounting.1. AS-1: Disclosure of Accounting Policies:

Few provisions of the mandatory accounting policies are:(a) Basis of preparation These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956. (b) Use of estimates The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provision for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred, the useful lives of depreciable fixed assets and provisions for impairment.(c) Investments(i). Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long term investments, comprising investment in mutual funds are stated at the lower of cost and fair value. (d) Revenue recognition(i). Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable. (ii). Revenues from the sale of equipment are recognised upon delivery, which is when title passes to the customer.

(iii). Revenues from sale of software licences are recognised upon delivery where there is no customisation required. In case of customisation the same is recognised over the life of the contract using the proportionate completion method.

(iv). Revenues from maintenance contracts are recognised pro-rata over the period of the contract. (v). Revenues from Business Process Outsourcing (BPO) services are recognised on time and material, fixed price and unit priced contracts. Revenue on time and material and unit priced contracts is recognised as the related services are rendered. Revenue from fixed price contracts is recognised as per the proportionate completion method with contract cost determining the degree of completion.

(vi). Revenues are reported net of discounts. Dividends are recorded when the right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable. (e) Taxation (i). Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

(ii). Minimum alternative tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. (iii). Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. (iv). In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets.

(v). Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis.

(vi). The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws. (f) Foreign currency transactions(i). Income and expenses in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gain and loss are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprises net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.

(ii). Premium or discount on foreign exchange forward and currency option contracts are amortised and recognised in the statement of profit and loss over the period of the contract. Foreign exchange forward and currency option contracts outstanding at the balance sheet date, other than designated cash flow hedges, are stated at fair values and any gains or losses are recognised in the statement of profit and loss. (g) Provisions, Contingent Liabilities and Contingent Assets(i). A provision is recognised when the Company 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 reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date.(ii). These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements. (h) Cash and cash equivalents(i). The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.2. AS-2: Valuation of Inventories.

(a)Inventories(i). Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value.

(ii). Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value.

(iii). Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value.

(iv). Cost includes direct material and labour cost and a proportion of manufacturing overheads.

3. AS-6: Depreciation Accounting.

(a)Fixed Assets Fixed assets are stated at cost, less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the asset to its present location and condition. Fixed assets exclude computers and other assets individually costing Rs 50,000 or less which are not capitalised except when they are part of a larger capital investment programme. (b) Depreciation / Amortisation Depreciation / amortisation on fixed assets, other than freehold land and capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:

BibliographyThe data used in this project was collected and referred from the following sources:1. http://www.marico.com/2. http://www.marico.com/html/investor/overview.php3. http://www.marico.com/html/investor/annual-reports.php4. http://www.marico.com/html/investor/pdf/annual_reports/ann_report_view_2011_12/Marico%20Annual%20Report%202011-12.pdf5. http://www.tcs.com/Pages/default.aspx6. http://www.tcs.com/investors/Pages/default.aspx7. http://www.tcs.com/investors/Documents/Annual%20Reports/TCS_Annual_Report_2011-2012.pdf8. http://www.cipla.com/9. http://www.cipla.com/Home/Global/Financial/Financial-Results.aspx?gid=1296&id=4

Credits

Sr.noNameRoll No.

1Divyesh KapraniPG12070

2Atul Khatau

PG12075

3Rohan PatelPG12097

4Sargam MehtaPG12099

5Vaidehi ParikhPG12104

6Aarti MultaniPG12115

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