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Accounting Policies of Euro Ceramics Ltd. Company

Mar 31, 2015

A Basis of accounting and preparation of financial statements

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

B System of accounting and Use of estimates

(i) The Company follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except in case of significant uncertainties.

(ii) Financial statements are prepared under the historical cost convention. These costs are not adjusted to reflect the impact of changing value in the purchasing power of money.

(iii) Estimates and assumptions used in the preparation of the financial statements and disclosures are based upon Management's evaluation of the relevant facts and circumstances as of the date of the financial statements, which may differ from the actual results at a subsequent date.

C Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes cost of purchase, cost of conversion and all other costs incurred in bringing the goods to their respective present location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

D Cash and Bank Balances

Cash and Bank Balances also include fixed deposits, margin money deposits, earmarked balances with bank, other bank balances and cash on hand. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F Depreciation and amortisation

(i) From the current year, depreciation is provided on a pro rata basis on the straight line method (SLM method) over the useful lives of the respective assets as defined in Schedule II-Part 'C' of the Companies Act, 2013 as against the past practice of computing depreciation at rates with reference to the life of the assets subject to the minimum rates provided by Schedule XIV of the Companies Act,1956.

(ii) The Vitrified Ceramic Tile Plant and the allied Machineries have been classified as a continuous process plant on technical assessment & depreciation has been provided accordingly.

(iii) Depreciation on additions is being provided on a pro-rata basis from the date of such additions.

(iv) Depreciation on assets sold, discarded or demolished during the year is being provided at their rates upto the date on which such assets are sold, discarded or demolished.

G Revenue recognition

(i) "Sales are 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 to customers. Sales include excise duty but exclude sales tax and value added tax.

(ii) Export Incentives on Advance License are recognised on accrual basis.

(iii) Interest Income is recognized on accrual basis and dividend income is accounted for when the right to receive the same is established.

H Tangible fixed assets

(i) Fixed assets are stated at cost net of tax / duty credits availed if any less accumulated depreciation.

(ii) The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

(iii) Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets.

(iv) Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

(v) Tangible Assets which are not ready for their intended use comprising direct cost, related incidental expenses and attributable interest are disclosed under capital work-in-progress.

I Foreign currency transactions and translations

(i) Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction or the rate approximate to the actual rate at the date of transaction. Exchange Rate fluctuation between the transaction date and the settlement date in respect of revenue transactions are recognized in Statement of Profit and Loss and in respect of acquisition of the fixed assets are adjusted to the cost of the respective assets.

(ii) Non-monetary foreign currency items are carried at cost.

(iii) Monetary Items of Current Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined is recognized in the Profit & Loss account.

(iv) The profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognized as income/expenses in the Statement of Profit and Loss for the year.

J Investments

Non-Current investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

K Employee benefits

(i) Short-term employee benefits

All employee benefits falling due wholly within twelve months of rendering service are classified as short term employee benefits. The benefits like salary, wages, short term compensated absences etc. and the expected cost of bonus / performance incentives are recognised in the period in which the employee renders the related service.

(ii) Defined contribution plans

The Company's contribution to provident fund and employees state insurance scheme and other welfare funds are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

(iii) Defined benefit plans

The employees gratuity fund scheme managed by the trust is the Company'e defined benefit plan. The present value of the obligation under such plan is determined based on acturial valuation using the projected unit credit method. In case such of funded plan, the fair value of the plan assets is reduced from the gross obligation to recognise such obligation on a net basis.

L Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing Costs attributable to acquisition and construction of qualifying asset are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use or sale. A qualifying asset is the one that necessarily takes a substantial period to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

M Segment reporting

(i) The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

(ii) "The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

(iv) Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

N Earning Per Share

In determining the earnings per share, the Company considers the net profit/loss after tax and post tax effect of any extra- ordinary/exceptional item is shown separately. The number of shares considered in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares considered for computing diluted earnings per share comprises the weighted average number of shares used for deriving the basic earnings per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issues.

O Taxes on income

(i) "Provision for taxation comprises of Current tax and Deferred Tax. Current tax Provision has been made in accordance with the Income Tax Act, 1961.

(ii) "Deferred tax for timing differences between the book and tax profits for the period is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

(iii) "Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

(iv) Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such deferred tax asset can be realized against future taxable profit.

P Impairment of assets

An asset is treated as impaired when the carrying cost of such asset exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Q Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2014

A. Basis of accounting and 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless stated otherwise. The financial statements have been prepared on going concern basis.

B. Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known I materialise.

C. Inventories

Inventories are valued at the lower of cost (on FIFO I weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes cost of purchase, cost of conversion and all other costs incurred in bringing the goods to their respective present location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

D. Cash and Bank Balances

Cash and Bank Balances also include fixed deposits, margin money deposits, earmarked balances with bank, other bank balances and cash on hand. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant riskof changes in value.

E. Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. The Vitrified Ceramic Tile Plant and the allied Machineries have been classified as a continuous process plant on technical assessment & depreciation has been provided accordingly.

G. Revenue recognition

"Sales are 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 to customers. Sales include excise duty but exclude sales tax and value added tax."

Export Incentives on Advance Licenses are recognized on accrual basis. Interest Income is recognized on accrual basis and dividend income is accounted for when the right to receive the same is established.

H. Tangible fixed assets

Fixed assets are stated at cost net oftax/duty credits availed if any less accumulated depreciation and impairment losses, if any.

The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Exchange differences arising on restatement I settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets.

Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Tangible Assets which are not ready for their intended use comprising direct cost, related incidental expenses and attributable interest are disclosed under capital work-in-progress.

I. Foreign currency transactions and translations

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction or the rate approximate to the actual rate at the date of transaction. Exchange Rate fluctuation between the transaction date and the settlement date in respect of revenue transactions are recognized in Statement of Profit and Loss and in respect of acquisition of the fixed assets are adjusted to the cost of the respective assets.

Non-monetary foreign currency items are carried at cost.

All export proceeds I import payables not realized at the year end are restated at the rate prevailing at the year end. The exchange difference arising there on has been recognized as income I expenses in the current year''s Statement of Profit and Loss.

Monetary Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined is recognized in the Profit & Loss account.

The profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognized as income/expenses in the Statement of Profit and Loss for the year.

J. Investments

Long-term investments are carried individually at costless provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

K. Employee benefits

Short-term employee benefits

All employee benefits falling due wholly within twelve months of rendering service are classified as short term employee benefits. The benefits like salary, wages, short term compensated absences etc. and the expected cost of bonus / performance incentives are recognised in the period in which the employee renders the related service.

Defined contribution plans

The Company''s contribution to provident fund and employees state insurance scheme and other welfare funds are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

The employees gratuity fund scheme managed by the trust is the company''e defined benefit plan. The present value of the obligation under such plan is determined based on acturial valuation using the projected unit credit method. In case such of funded plan, the fairvalue of the plan assets is reduced from the gross obligation to recognise such obligation on a net basis.

L. Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing Costs attributable to acquisition and construction of qualifying asset are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use or sale. A qualifying asset is the one that necessarily takes a substantial period to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

M. Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

"The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. "

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market/fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue/expenses/assets/liabilities".

N. Earning Per Share

"In determining the earnings per share, the Company considers the net profit/loss after tax and post tax effect of any extra- ordinary/ exceptional item is shown separately. The number of shares considered in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares considered for computing diluted earnings per share comprises the weighted average number of shares used for deriving the basic earnings per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares which includes potential CCD conversions. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issues."

O. Taxes on income

"Provision for taxation comprises of Current tax and Deferred Tax. Current tax Provision has been made in accordance with the Income Tax Act, 1961.

Deferred tax for timing differences between the book and tax profits for the period is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such deferred tax asset can be realized against future taxable profit."

P. Impairment of assets

An asset is treated as impaired when the carrying cost of such asset exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Q. Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the financial statements.

R. Derivative contracts

"The Company enters into derivative contracts in the nature of foreign currency swaps, currency options, forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting.

All other derivative contracts are marked-to-market and losses are recognised in the Statement of Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence."


Mar 31, 2013

A Basis of accounting and 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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless stated otherwise. The financial statements have been prepared on going concern basis.

B Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

C inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes cost of purchase, cost of conversion and all other costs incurred in bringing the goods to their respective present location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

D Cash and Bank Balances

Cash and Bank Balances also include fixed deposits, margin money deposits, earmarked balances with bank, other bank balances and cash on hand. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E Cash flow statement

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. The Vitrified Ceramic Tile Plant and the allied Machineries have been classified as a continuous process plant on technical assessment & depreciation has been provided accordingly.

G Revenue recognition

"Sales are 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 to customers. Sales include excise duty but exclude sales tax and value added tax."

Export Incentives on Advance Licenses are recognized on accrual basis.

Interest Income is recognized on accrual basis and dividend income is accounted for when the right to receive the same is established.

H Tangible fixed assets

Fixed assets are stated at cost net of tax / duty credits availed if any less accumulated depreciation and impairment losses, if any.

The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets.

Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Tangible Assets which are not ready for their intended use comprising direct cost, related incidental expenses and attributable interest are disclosed under capital work-in-progress.

I Foreign currency transactions and translations

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction or the rate approximate to the actual rate at the date of transaction. Exchange Rate fluctuation between the transaction date and the settlement date in respect of revenue transactions are recognized in Statement of Profit and Loss and in respect of acquisition of the fixed assets are adjusted to the cost of the respective assets.

Non-monetary foreign currency items are carried at cost.

All export proceeds / import payables not realized at the year end are restated at the rate prevailing at the year end. The exchange difference arising there on has been recognized as income / expenses in the current year''s Statement of Profit and Loss.

Monetary Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined is recognized in the Profit & Loss account.

The profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognized as income/expenses in the Statement of Profit and Loss for the year.

J Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

K Employee benefits

Short-term employee benefits

All employee benefits falling due wholly within twelve months of rendering service are classified as short term employee benefits. The benefits like salary, wages, short term compensated absences etc. and the expected cost of bonus / performance incentives are recognised in the period in which the employee renders the related service.

Defined contribution plans The Company''s contribution to provident fund and employees state insurance scheme and other welfare funds are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans The employees gratuity fund scheme managed by the trust is the company''s defined benefit plan. The present value of the obligation under such plan is determined based on acturial valuation using the projected unit credit method. In case such of funded plan, the fair value of the plan assets is reduced from the gross obligation to recognise such obligation on a net basis.

L Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing Costs attributable to acquisition and construction of qualifying asset are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use or sale. A qualifying asset is the one that necessarily takes a substantial period to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

M Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

"The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment."

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets /liabilities".

N Earning Per Share

In determining the earnings per share, the Company considers the net profit/loss after tax and post tax effect of any extra- ordinary/exceptional item is shown separately. The number of shares considered in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares considered for computing diluted earnings per share comprises the weighted average number of shares used for deriving the basic earnings per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares which includes potential CCD conversions. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares issues.

O Taxes on income ''

Provision for taxation comprises of Current tax and Deferred Tax. Current tax Provision has been made in accordance with the Income Tax Act, 1961 .Deferred tax for timing differences between the book and tax profits for the period is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future. Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such deferred tax asset can be realized against future taxable profit.

P Impairment of assets

An asset is treated as impaired when the carrying cost of such asset exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Q Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are neither recognised nordisclosed in the financial statements.

R Derivative contracts

The Company enters into derivative contracts in the nature of foreign currency swaps, currency options, forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations. Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting. All other derivative contracts are marked- to-market and losses are recognised in the Statement of Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.


Mar 31, 2011

I BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial statements are prepared under the historical cost convention, on an accrual basis, and in accordance with the relevant provisions of the Companies Act, 1956 and the applicable mandatory Accounting Standards issued by the Institute Of Chartered Accountants Of India.

II FIXEDASSETS

Fixed Assets are stated at historical cost (net of CENVAT credit availed) less accumulated Depreciation/Amortization thereon and/or recoverable value in case of Impairment, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and also comprises of borrowing costs attributable to acquisition and construction of assets up to the date when such asset is ready for its intended use.

III DEPRECIATION

a) Depreciation is provided on Straight Line Method at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956.

b) The Ceramic Plant and the allied Machineries have been classified as a continuous process plant on technical assessment & depreciation has been provided accordingly.

c) Depreciation on the Fixed Assets added/disposed off /discarded during the period has been provided on pro-rata basis with reference to the month of addition/disposal/discarding.

d) Depreciation on the amounts capitalized on account of foreign exchange fluctuation is provided prospectively over residual life of the assets.

IV BORROWING COST

a) Borrowing Costs attributable to acquisition and construction of qualifying asset are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. A qualifying asset is the one that necessarily takes a substantial period to get ready for intended use.

b) Other borrowing costs are recognized as an expense in the period in which they are incurred.

V FOREIGN CURRENCYTRANSACTIONS

a) Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction. Exchange Rate fluctuation between the transaction date and the settlement date in respect of revenue transactions are recognized in Profit & Loss account and in respect of acquisition of the fixed assets are adjusted to the cost of the respective assets.

b) All export proceeds / import payables not realized at the year end are restated at the rate prevailing at the year end. The exchange difference arising there on has been recognized as income / expenses in the current year's Profit & Loss account.

c) Monetary Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined is recognized in the Profit & Loss account.

d) As per the Provisions of the AS 11 of the ICAI, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognized as income/expenses in the Profits Loss accountforthe year.

VI INVESTMENTS

Long Term Investments are stated at cost less provision, if any, for permanent diminution in their value.

VII INVENTORIES

a) Raw Materials, components, stores and spares are valued at lowerof cost and net realizable value.

b) Work in Progress and finished goods are valued at lower of cost and net realizable value. Cost comprises of direct materials, direct labour, other costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

c) Cost of inventories is computed on Weighted Average / FIFO basis.

VI REVENUE RECOGNITION

a) Sales are recorded net of returns.

b) Export Incentives on Advance License are recognized on accrual basis.

c) Interest Income is recognized on accrual basis and dividend income is accounted for when the right to receive the same is established.

d) As per the Provisions of the Accounting Standard-7 'Construction Contracts' issued by the ICAI, Costs and progress payments received are accumulated during the course of the project. Revenue is not recognized until the project is substantially completed.

IX RETIREMENTBENEFITS

a) The Company's contributions in respect of Provident Fund are charged to the profit & loss account each year.

b) The Company's contribution to Life Insurance Corporation of India (LIC) and SBI Life Insurance Co. Ltd. for group gratuity policy is charged off to Profit and Loss account eachi year. The contribution to group gratuity policy is based on values as actuarially determined and demanded by respective gratuity funds.

c) Liability for accumulated earned leave of employees is ascertained and provided for as per Company Rules.

X TAXES ON INCOME

a) Provision for taxation comprises of Current tax, Deferred Tax and Fringe Benefit Tax. Current tax Provision has been made in accordance with the Income Tax Act, 1961.

b) Deferred tax for timing differences between the book and tax profits for the period is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

c) Deferred tax assets arising from timing differences are recognized

to the extent there is reasonable certainty that these would be realized in future.

d) Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such deferred tax asset can be realized against future taxable profit.

XI IMPAIRMENT OF ASSETS

Factors giving rise to any indication of impairment of the carrying amounts of the Company's Assets are appraised at each Balance Sheet date to determine and provide / reverse an impairment loss. There is no such impairment in the carrying amount of the Company's Assets.

XII PROVISIONS AND CONTINGENT LIABILITIES

a) Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation.

b) Contingent Liabilities are disclosed when the Company has a possible obligation or a present obligation and it is uncertain as to whether a cash outflow will be required to settle the obligation.


Mar 31, 2010

I BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial statements are prepared under the historical cost convention, on an accrual basis, and in accordance with the relevant provisions of the Companies Act, 1956 and the applicable mandatory Accounting Standards issued by the Institute Of Chartered Accountants Of India.

II FIXED ASSETS:

Fixed Assets are stated at historical cost (net of CENVAT credit availed) less accumulated Depreciation/ amortization thereon and/or recoverable value in case of Impairment, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and also comprises of borrowing costs attributable to acquisition and construction of assets up to the date when such asset is ready for its intended use.

III DEPRECIATION

a. Depreciation is provided on Straight Line Method at the rates and in the manner specifi ed in the Schedule XIV of the Companies Act, 1956.

b. The Ceramic Plant and the allied Machineries have been classifi ed as a continuous process plant on technical assessment & depreciation has been provided accordingly.

c. Depreciation on the Fixed Assets added/ disposed off /discarded during the period has been provided on pro-rata basis with reference to the month of addition/disposal/ discarding.

d. Depreciation on the amounts capitalized on account of foreign exchange fluctuation is provided prospectively over residual life of the assets.

IV BORROWING COST

a. Borrowing Costs attributable to acquisition and construction of qualifying asset are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. A qualifying asset is the one that necessarily takes a substantial period to get ready for intended use.

b. Other borrowing costs are recognized as an expense in the period in which they are incurred.

V FOREIGN CURRENCY TRANSACTIONS

a. Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction. Exchange Rate fl uctuation between the transaction date and the settlement date in respect of revenue transactions are recognized in Profi t & Loss account and in respect of acquisition of the fi xed assets are adjusted to the cost of the respective assets.

b. All export proceeds / import payables not realized at the year end are restated at the rate prevailing at the year end. The exchange difference arising there on has been recognized as income / expenses in the current years Profi t & Loss account.

c. Monetary Assets & Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profi t/Loss so determined is recognized in the Profi t & Loss account.

d. As per the Provisions of the AS 11 of the ICAI, the profi t/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fl uctuation/price risks are recognized as income/expenses in the Profi t

& Loss account for the year.

VI INVESTMENTS

Long Term Investments are stated at cost less provision, if any, for permanent diminution in their value.

VII INVENTORIES

a. Raw Materials, components, stores and spares are valued at lower of cost and net realizable value.

b. Work in Progress and fi nished goods are valued at lower of cost and net realizable value. Cost comprises of direct materials, direct labour, other costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

c. Cost of inventories is computed on Weighted Average / FIFO basis.

VIII REVENUE RECOGNITION

a. Sales are recorded net of returns.

b. Export Incentives on Advance License are recognized on accrual basis.

c. Interest Income is recognized on accrual basis and dividend income is accounted for when the right to receive the same is established.

IX RETIREMENT BENEFITS

a. The Companys contributions in respect of Provident Fund are charged to the profi t & loss account each year.

b. The Companys contribution to Life Insurance Corporation of India (LIC) and SBI Life Insurance Co. Ltd. for group gratuity policy is charged off to Profi t and Loss account each year. The contribution to group gratuity policy is based on values as actuarially determined and demanded by respective gratuity funds.

c. Liability for accumulated earned leave of employees is ascertained and provided for as per Company Rules.

X TAXES ON INCOME

a. Provision for taxation comprises of Current tax, Deferred Tax and Fringe Benefi t Tax. Current tax Provision has been made in accordance with the Income Tax Act, 1961.

b. Deferred tax for timing differences between the book and tax profi ts for the period is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

c. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

d. Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such deferred tax asset can be realized against future taxable profit.

XI IMPAIRMENT OF ASSETS

Factors giving rise to any indication of impairment of the carrying amounts of the Companys Assets are appraised at each Balance Sheet date to determine and provide / reverse an impairment loss. There is no such impairment in the carrying amount of the Companys Assets.

XII PROVISIONS AND CONTINGENT LIABILITIES

a. Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that a cash outfl ow will be required and a reliable estimate can be made of the amount of the obligation.

b. Contingent Liabilities are disclosed when the Company has a possible obligation or a present obligation and it is uncertain as to whether a cash outflow will be required to settle the obligation.

 
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