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Accounting Policies of Cera Sanitaryware Ltd. Company

Mar 31, 2015

Basis of Accounting

The Company prepares its financial statements under the historical cost convention, on an accrual basis of accounting, to comply in all material respects with the notified Accounting Standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. In Pursuant to transitional provision with respect to accounting standard u/s 133 of the Companies Act, 2013.

Sales

Sales include excise duty and net of discounts and Vat.

Employee Benefits

(i) Provident Fund is a defined contribution scheme and it is charged to revenue for the year when due.

(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial valuation. The Company has no further obligation except contribution to the fund.

(iii) Leave encashment is recognised on the basis of an actuarial valuation made at the end of each year.

Fixed Assets, Depreciation and Amortization

(a) Fixed Assets transferred on demerger scheme are stated at cost-less accumulated depreciation. Acquisitions and additions are stated at cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of MODVAT credits on the assets and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Capital work in progress :

Projects under commissioning and other capital work in progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

(c) Assets acquired under hire purchase instalment credit scheme, the cost of asset is capitalized while the annual financial charges at equated instalments are charged to revenue.

(d) Depreciation for the year has been provided on carrying cost at the rates and manner prescribed in Schedule II of the Companies Act, 2013 as under:

(1) On Plant & Machinery and Electric Plant & Installation on straight-line method ,but on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets and depreciation is provided as aforesaid over the residual life of the respective assets.

(2) On other assets on written down value method on the remaining life of the respective assets.

(e) Leasehold land is amortized over the period of lease.

(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value.

Inventories

(a) Raw-materials, Packing Materials, Stores and Chemicals are taken at lower of cost and net realizable value following FIFO method.

(b) Stock-in-Process is valued at lower of cost and net realizable value.

(c) Finished goods are valued at lower of cost and net realizable value.

(d) Excise duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.

Investments

Non-Current Investments are stated at cost. Current investments are carried at lower of cost and fair value. Provision for diminution in the value of non current investments is made only, if such a decline is other than temporary in the opinion of the management.

Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies as at the end of the year is recognised in the profit and loss account. Accounts Receivable in foreign currency are either represented by bills of exchange, which in many cases, are immediately discounted with bankers, or accounted at realized amounts. Exchange differences arising in respect of fixed assets acquired from outside India were capitalised as part of fixed assets. Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.

Taxation

Provision for tax for the year comprises current Income-tax and Wealth-tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).

Earning per Share

The earnings considered in ascertaining the company''s Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing Basic EPS is the Weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares.

Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the amount may not be recoverable. An impairment loss is recognized for the amount by which the assets'' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets'' net selling price and its value in use.

Contingent Liability

Contingent liabilities determined on the basis of available information; wherever material are provided for and Contingent liabilities not provided for in the accounts are disclosed by way of notes to the accounts.


Mar 31, 2014

- Basic of Accounting

The Company prepares its financial statements underline historical cost convention, on an accrual basis of accounting, to comply in all material respects with the notified Accounting Standards by tried Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Sales

Sales include excise duty and net of discounts and sales-tax / Vat.

- Employee Benefits

(i) Provident Fund is a defined contribution scheme and it is charged to revenue tor the year when due.

(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial valuation.

Tried Company has no further obligation except contribution to the fund. (iii) Leave Encashment is recognised on the basis of an actuarial valuation made at the end of each year.

- Fixed! Assets, Depreciation and Amortization

(a) Fixed Assets transferred on demerger scheme are stared at cost-less accumulated depreciation. Acquisitions and additions are staled a! cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of MODVAT credits on the assets and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Capital work in progress :

Projects under commissioning and other capital work in progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest. (c i Assets acquired under hire purchase installment credit scheme, the cost of asset is capitalized while the annual financial charges al equaled installments are charged to revenue.

(d) Depreciation for the year has been provided on net asset value at the rules and in the manner specified in Schedule-XlV of the Companies Act, 1956 as under:

(1) On Plant & Machinery and Electric Plant S Installation on straight-line method, but on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets and depreciation is provided as aforesaid over the residual lite of the respective assets.

(2) On other assets on written down value method.

(e) Leasehold land is amortized over the period of lease.

(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value. inventories

(a) Haw materials, Packing Materials, Stores and Chemicals are taken at lower of cost and net realizable value following FIFO method.

(b) Stock-in-Process is valued at lower of cost and net realizable value.

(c) Finished goods are valued at lower of cost and net realizable value.

(d) Excise duty on goods manufactured by tried Company and remaining in inventory is included as a part of valuation of finished goods.

- Investments

N on-Current Investments are stated at cost. Current investments are carried at lower of cost and lair value. Provision for diminution in the value of non current investments is made Only, if such a decline is Other than temporary in tried opinion of the management. Foreign Currency Transactions

Foreign currency transactions during the year are recorded al rates of exchange prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from tried translation of monetary assets and liabilities denominated in foreign currencies as at the end of the year is recognised in the profit and loss account. Accounts Receivable in foreign currency are either represented by bills of exchange, which in many cases, are immediately discounted with bankers, Or accounted at realized amounts. Exchange differences arising in respect of fixed assets acquired from outside India were capitalised as part of fixed assets (see note 37). Derivative transactions are considered as oft-balance sheet items and cash flows arising tried from are recognised in the books of account as and written the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

- Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.

- Taxation

Provision for lax for the year comprises current Income-tax and Wealth-tax determined to be payable in respect of taxable income and deferred lax being the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).

- Earning per Share

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing Basic EPS is the Weighted average number of shares outstanding during tried year.

Tried diluted EPS is calculated on the same basis as Basic EPS. after adjusting for the effects of potential dilutive equity shares.

- Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the amount may not be recoverable. An impairment loss is recognized for the amount by which the assets'' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of tried assets'' net selling price and its value in use.

- Contingent Liability

Contingent liabilities determined on the basis of available information, wherever material are provided for and Contingent liabilities not provided for in the accounts are disclosed by way of notes to the accounts.


Mar 31, 2013

* Basis of Accounting

The Company prepares its financial statements under the historical cost convention, on an accrual basis of accounting, to comply in all material respects with the notified Accounting Standards by the Companies Accounting Standards Rules,2006 and the relevant provisions of the Companies Act, 1956.

* Sales

Sales include excise duty and net of discounts and sales-tax / Vat.

* Employee Benefits

(i) Provident Fund is a defined contribution scheme and it is charged to revenue for the year when due.

(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial valuation. The Company has no further obligation except contribution to the fund.

(iii) Leave encashment is recognised on the basis of an actuarial valuation made at the end of each year.

* Fixed Assets, Depreciation and Amortization

(a) Fixed Assets transferred on demerger scheme are stated at cost-less accumulated depreciation. Acquisitions and additions are stated at cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of MODVAT credits on the assets and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Capital work in progress :

Projects under commissioning and other capital work in progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

(c) Assets acquired under hire purchase installment credit scheme, the cost of asset is capitalized while the annual financial charges at equated installments are charged to revenue.

(d) Depreciation for the year has been provided on net asset value at the rates and in the manner specified in Schedule-XIV of the Companies Act, 1956 as under:

(1) On Plant & Machinery and Electric Plant & Installation on straight-line method, but on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets and depreciation is provided as aforesaid over the residual life of the respective assets.

(2) On other assets on written down value method.

(e) Leasehold land is amortized over the period of lease.

(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value.

* Inventories

(a) Raw-materials, Packing Materials, Stores and Chemicals are taken at lower of cost and net realizable value following FIFO method.

(b) Stock-in-Process is valued at lower of cost and net realizable value.

(c) Finished goods are valued at lower of cost and net realizable value.

(d) Excise duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.

* Investments

Non-Current Investments are stated at cost. Current investments are carried at lower of cost and fair value. Provision for diminution in the value of non current investments is made only, if such a decline is other than temporary in the opinion of the management.

* Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies as at the end of the year is recognised in the profit and loss account. Accounts Receivable in foreign currency are either represented by bills of exchange, which in many cases, are immediately discounted with bankers, or accounted at realized amounts. Exchange differences arising in respect of fixed assets acquired from outside India were capitalised as part of fixed assets (see note 37). Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

* Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.

* Taxation

Provision for tax for the year comprises current Income-tax and Wealth-tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).

* Earning per Share

The earnings considered in ascertaining the company''s Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing Basic EPS is the Weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares.

* Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the amount may not be recoverable. An impairment loss is recognized for the amount by which the assets'' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets'' net selling price and its value in use.

* Contingent Liability

Contingent liabilities determined on the basis of available information, wherever material are provided for and Contingent liabilities not provided for in the accounts are disclosed by way of notes to the accounts.


Mar 31, 2012

- Basis of Accounting

The Company prepares its financial statements under the historical cost convention, on an accrual basis of accounting, to comply in all material respects with the notified Accounting Standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956.

- Sales

Sales include excise duty and net of discounts and sales-tax/Vat.

- Employee Benefits

(i) Provident Fund is a defined contribution scheme and it is charged to revenue for the year when due.

(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial valuation. The Company has no further obligation except contribution to the fund.

(iii) Leave encashment is recognised on the basis of an actuarial valuation made at the end of each year.

- Employees Stock Option Scheme

In accordance with the Securities and Exchange Board of India guidelines, the excess of the Market Price of the shares at the date of grant of options under the Employee Stock Option Scheme, over the exercise price is treated as Employee Compensation and amortised over the vesting period.

- Fixed Assets, Depreciation and Amortization

(a) Fixed Assets transferred on demerger scheme are stated at cost-less accumulated depreciation. Acquisitions and additions are stated at cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of CENVAT credits on the assets and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Capital work in progress :

Projects under commissioning and other capital work in progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest costs.

(c) Assets acquired under hire purchase instalment credit scheme, the cost of asset is capitalized while the annual financial charges at equated instalments are charged to revenue.

(d) Depreciation for the year has been provided on net asset value at the rates and in the manner specified in Schedule-XIV of the Companies Act, 1956 as under:

(1) On Plant & Machinery and Electric Plant & Installation on straight-line method, but on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets and depreciation is provided as aforesaid over the residual life of the respective assets.

(2) On other assets on written down value method.

(e) Leasehold land is amortized over the period of lease.

(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value.

- Inventories

(a) Raw-materials, Packing Materials, Stores and Chemicals are taken at lower of cost and net realizable value following FIFO method.

(b) Stock-in-Process is valued at lower of cost and net realizable value.

(c) Finished goods are valued at lower of cost and net realizable value.

(d) Excise duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.

- Investments

a) Non-Current Investments are stated at cost. Provision for diminution in the value of non current investments is made, if such a decline is other than temporary in the opinion of the management.

b) Current Investments are carried at lower of cost and fair value. Current Investments are carried individually at lower of cost and fair value and resultant decline, if any, is charged to revenue.

- Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies as at the end of the year is recognised in the profit and loss account. Account Receivables in foreign currencies are either represented by bills of exchange, which in many cases, are immediately discounted with bankers, or accounted at realized amounts.

Exchange differences arising in respect of fixed assets acquired from outside India were capitalised as part of fixed assets. Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

- Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.

- Taxation

Provision for tax for the year comprises current Income-tax and Wealth-tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).

- Earning per Share

The earnings considered in ascertaining the company's Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing Basic EPS is the Weighted average number of Equity shares outstanding during the year.

The diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares.

- Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the amount may not be recoverable. An impairment loss is recognized for the amount by which the assets' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets' net selling price and its value in use.

- Contingent Liability

Contingent liabilities determined on the basis of available information; wherever material are provided for and Contingent liabilities not provided for in the accounts are disclosed by way of notes to the accounts.


Mar 31, 2010

Basis of Accounting

The Company prepares its financial statements under the historical cost convention, on an accrual basis of accounting, to comply in all material respects with the notified Accounting Standards by the Companies Accounting Standards Rules,2006 and the relevant provisions of the Companies Act, 1956.

Sales

Sales include excise duty and net of discounts and sales-tax / Vat.

- Employee Benefits

(i) Provident Fund is a defined contribution scheme and it is charged to revenue for the year when due.

(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial valuation. The Company has no further obligation except contribution to the fund.

(iii) Leave encashment is recognised on the basis of an actuarial valuation made at the end of each year.

- Employees Stock Option Scheme

In accordance with the Securities and Exchange Board of India guidelines, the excess of the Market Price of the shares at the date of grant of options under the Employee Stock Option Scheme, over the exercise price is treated as Employee Compensation and amortised over the vesting period.

- Fixed Assets, Depreciation and Amortisation

(a) Fixed Assets transferred on demerger scheme are stated at cost-less accumulated depreciation.

Acquisitions and additions are stated at cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of MODVAT credits on the assets and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Capital work in progress : Projects under commissioning and other capital work in progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

(c) Assets acquired under hire purchase instalment credit scheme, the cost of asset is capitalized while the annual financial charges at equated instalments are charged to revenue.

(d) Depreciation for the year has been provided on net asset value at the rates and in the manner specified in Schedule-XIV of the Companies Act, 1956 as under:

(1) On Plant & Machinery and Electric Plant & Installation on straight-line method ,but on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets and depreciation is provided as aforesaid over the residual life of the respective assets.

(2) On other assets on written down value method.

(e) Leasehold land is amortized over the period of lease.

(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value.

-Inventories

(a) Raw-materials, Packing Materials, Stores and Chemicals are taken at lower of cost and net realizable value following FIFO method.

(b) Stock-in-Process is valued at lower of cost and net realizable value.

(c) Finished goods are valued at lower of cost and net realizable value.

(d) Excise duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.

- Investments

Investments are stated at cost.

- Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transaction.

Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies as at the end of the year is recognised in the profit and loss account. Accounts Receivable in foreign currency are either represented by bills of exchange, which in many cases, are immediately discounted with bankers, or accounted at realized amounts.

Exchange differences arising in respect of fixed assets acquired from outside India were capitalised as part of fixed assets (see note 13 below).

Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.

- Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.

- Taxation

Provision for tax for the year comprises current Income-tax and Wealth-tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).

- Earning per Share

The earnings considered in ascertaining the companys Earnings per Share (EPS) comprise the net profit after tax. The number of

shares used in computing Basic EPS is the Weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

- Contingent Liability

Contingent liabilities determined on the basis of available information; wherever material are provided for and Contingent liabilities not provided for in the accounts are disclosed by way of notes to the accounts.

 
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