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Accounting Policies of Somany Ceramics Ltd. Company

Mar 31, 2016

1.1 ACCOUNTING CONCEPTS

The financial statements have been prepared under the historical cost convention on accrual basis in compliance with applicable accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except where otherwise stated.

1.2 REVENUE RECOGNITION

Revenue is recognised when significant risks and reward of ownership have been passed to buyer and there is no uncertainty exists to its realization or collection.

1.3 FIXED ASSETS

a) Fixed assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses.

b) Intangible assets are stated at cost less amortisation.

c) Pre-operative expenditure during the construction/erection period is included under capital work-in-progress and is allocated to the respective fixed assets on completion of construction/erection.

1.4 DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSS

a) Fixed assets are depreciated using written down value method except fixed assets of the floor tile unit (including MTP & GVT plant) and addition made after 1st April, 1995 to plant and machinery of wall tile units, where depreciation is provided on a straight line method, considering the estimated useful lives as specified in Schedule II of the Companies Act, 2013 except in case of vehicles, press punches / die boxes / components of certain plant & machinery and hand pallet truck where useful lives are taken as 5, 8 and 3 years respectively. Continuous process plants as defined in Schedule II have been considered on technical evaluation. Impaired assets are amortised over the estimated balance useful life.

b) In case of indication of impairment of the carrying amount of the Company''s assets, an asset recoverable amount is estimated. Impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

c) Leasehold land is amortised over the period of lease.

d) (i) Intangible assets are being recognised if the future economic benefits attributable to the assets are expected to flow to the Company and cost of the assets can be measured reliably. The same are being amortised over the expected duration of benefits.

(ii) Intangible assets being computer software is amortised over a period of five years.

1.5 TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Premium in respect of forward contract is accounted over the period of the contract. Exchange differences arising on settlement/ translation of monetary items including forward contracts are dealt in the statement of Profit and Loss except foreign exchange loss/gain arising after 1st April, 2012 on long-term foreign currency monetary items used for depreciable assets, which are capitalised.

1.6 INVESTMENTS

Long-term investments are stated at cost less provision for diminution in the value other than temporary. Current investments are stated at cost or market value whichever is lower.

1.7 INVENTORIES

Inventories are valued at lower of cost and net realisable value except waste/ scrap which is valued at net realisable value. Cost of raw materials and stores and spare parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

1.8 RESEARCH & DEVELOPMENT EXPENSES

Revenue expenditure on research and development is charged to Statement of Profit & Loss and Capital expenditure is added to fixed assets.

1.9 INTEREST ON BORROWINGS

Interest on borrowings is charged to the Statement of Profit & Loss for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalised till the date of commercial use of the asset.

1.10 EMPLOYEE BENEFITS:

a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) and Employees'' pension Scheme are defined as contribution plan and charged as expenses during the period in which the employees perform the services.

b) Defined Benefit Plan:

Retirement benefits in the form of gratuity, long-term compensated leaves;other long-term employee benefit and provident fund (multi- employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, according to the date of the Balance Sheet. Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit & Loss.

c) Short-term employee benefit:

Short-term benefits are charged off at the undiscounted amount in the year in which the related services rendered.

1.11 GOVERNMENT GRANTS

Grants from government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capital subsidy are credited to capital reserve. Other government grants including incentive, duty drawback among others are credited to Statement of Profit & Loss or deducted from the related expenses.

1.12 LEASES

Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on straight line basis, over the lease period.

1.13 SHARE ISSUE EXPENSES

Share issue expenses are written off against the Security Premium Account.

1.14 PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax liability of the Company is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognised subject to the consideration of 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.

1.15 USE OF ACCOUNTING ESTIMATES

The preparation of financial statements is in conformity with generally accepted accounting principles requires the management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

1.16 CONTINGENT LIABILITY, CONTINGENT ASSETS AND PROVISION

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statement, 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 obligation(s), in respect to which an estimate can be made for the amount of obligation.


Mar 31, 2015

1.1 ACCOUNTING CONCEPTS

The financial statements have been prepared under the historical cost convention on accrual basis in compliance with applicable accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except where otherwise stated.

1.2 REVENUE RECOGNITION

Revenue is recognised when significant risks and reward of ownership have been passed to buyer and there is no uncertainty exists to its realization or collection.

1.3 FIXED ASSETS

a) Fixed assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses.

b) Intangible assets are stated at cost less amortisation.

c) Pre-operative expenditure during the construction/erection period is included under capital work-in-progress and is allocated to the respective fixed assets on completion of construction/ erection.

1.4 DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSS

a) Fixed assets are depreciated using written down value method except fixed assets of the floor tile unit (including MTP & GVT plant) and addition made after 1st April, 1995 to plant and machinery of wall tile units, where depreciation is provided on a straight line method, considering the estimated useful lives as specified in Schedule II of the Companies Act, 2013 except in case of vehicles, press punches / die boxes and hand pallet truck where useful lives are taken as 5, 8 and 3 years respectively. Continuous process plants as defined in Schedule II have been considered on technical evaluation. impaired assets are amortised over the estimated balance useful life.

b) In case of indication of impairment of the carrying amount of the Company''s assets, an asset recoverable amount is estimated. impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

c) Leasehold land is amortised over the period of lease.

d) (i) intangible assets are being recognised if the future economic benefits attributable to the assets are expected to flow to the Company and cost of the assets can be measured reliably. The same are being amortised over the expected duration of benefits.

(ii) intangible assets being computer software is amortised over a period of five years.

1.5 TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Premium in respect of forward contract is accounted over the period of the contract. Exchange differences arising on settlement/translation of monetary items including forward contracts are dealt in the statement of Profit and Loss except foreign exchange loss/gain arising after 1st april, 2012 on long-term foreign currency monetary items used for depreciable assets, which are capitalised.

1.6 INVESTMENTS

Long-term investments are stated at cost less provision for diminution in the value other than temporary. Current investments are stated at cost or market value whichever is lower.

1.7 INVENTORIES

inventories are valued at lower of cost and net realisable value except waste/scrap which is valued at net realisable value. Cost of raw materials and stores and spare parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

1.8 RESEARCH & DEVELOPMENT EXPENSES

Revenue expenditure on research and development is charged to Statement of Profit & Loss and Capital expenditure is added to fixed assets.

1.9 INTEREST ON BORROWINGS

Interest on borrowings is charged to the Statement of Profit & Loss for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalised till the date of commercial use of the asset.

1.10 EMPLOYEE BENEFITS:

a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) and Employees'' pension Scheme are defined as contribution plan and charged as expenses during the period in which the employees perform the services.

b) Defined Benefit Plan:

Retirement benefits in the form of gratuity, long-term compensated leaves;other long-term employee benefit and provident fund (multi-employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, according to the date of the Balance Sheet. Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit & Loss.

c) Short-term employee benefit:

Short-term benefits are charged off at the undiscounted amount in the year in which the related services rendered.

1.11 GOVERNMENT GRANTS

Grants from government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capital subsidy are credited to capital reserve. other government grants including incentive, duty drawback among others are credited to Statement of Profit & Loss or deducted from the related expenses.

1.12 LEASES

Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on straight line basis, over the lease period.

1.13 SHARE ISSUE EXPENSES

Share issue expenses are written off against the Security Premium Account.

1.14 PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax liability of the Company is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognised subject to the consideration of 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.

1.15 USE OF ACCOUNTING ESTIMATES

The preparation of financial statements is in conformity with generally accepted accounting principles requires the management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

1.16 CONTINGENT LIABILITY, CONTINGENT ASSETS AND PROVISION

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statement, 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 obligation(s), in respect to which an estimate can be made for the amount of obligation.


Mar 31, 2013

1.1 Accounting Concepts

The financial statements have been prepared under the historical cost convention on accrual basis in compliance with applicable accounting standards notified by the companies (Accounting standards) Rules, 2006 (as amended) and relevant provisions of the Companies Act, 1956. The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except where otherwise stated.

1.2 Fixed Assets

(i) Fixed assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses.

(ii) Intangible assets are stated at cost less amortisation.

(iii) Pre-operative expenditure during the construction/erection period is included under capital work-in-progress and is allocated to the respective fixed assets on completion of construction/erection.

1.3 Depreciation, Amortisation and Impairment Loss

(a) Fixed assets are depreciated using written down value method except fixed assets of the floor tile unit (including MTP & GVT plant) and addition made after 1st April, 1995 to plant and machinery of wall tile units, where depreciation is provided on a straight line method, at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plant as defined in Schedule XIV have been considered on technical evaluation. Impaired assets are amortised over the estimated balance useful life.

(b) In case of indication of impairment of the carrying amount of the Company''s assets, an asset recoverable amount is estimated. Impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

(c) Intangible assets being computer software is amortised over a period of five years.

1.4 Transaction of Foreign Currency Items

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Premium in respect of forward contract is accounted over the period of the contract. Exchange differences arising on settlement/translation of monetary items including forward contracts are dealt in the statement of Profit and Loss except foreign exchange loss/gain arising after 1st April, 2012 on long-term foreign currency monetary items used for depreciable assets, which are capitalised.

1.5 Investments

Long-term investments are stated at cost less provision for diminution in the value other than temporary. Current investments are stated at cost or market value whichever is lower

1.6 Inventories

Inventories are valued at lower of cost and net realisable value except waste/scrap which is valued at net realisable value. Cost of raw materials and stores and spare parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

1.7 Revenue expenditure on research and development is charged to Statement of Profit & Loss and capital expenditure is added to fixed assets.

1.8 Interest on Borrowings

Interest on borrowings is charged to the Statement of Profit & Loss for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalised till the date of commercial use of the asset.

1.9 Employee Benefits

(a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) and Employees'' pension Scheme are defined as contribution plan and charged as expenses during the period in which the employees perform the services.

(b) Defined Benefit Plan:

Retirement benefits in the form of gratuity, long-term compensated leaves,other long-term employee benefit and provident fund (multi-employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, according to the date of the Balance Sheet. Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit & Loss.

(c) Short-term employee benefit:

Short-term benefits are charged off at the undiscounted amount in the year in which the related services rendered.

1.10 Government Grants

Grants from government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capital subsidy are credited to capital reserve. Other government grants including incentive, duty drawback among others are credited to Statement of Profit & Loss or deducted from the related expenses.

1.11 Provision for Current and Deferred Tax

Provision for current tax liability of the Company is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognised subject to the consideration of 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.

1.12 Intangible assets are being recognised if the future economic benefits attributable to the assets are expected to flow to the Company and cost of the assets can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Use of Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

1.14 Contingent Liability, Contingent Assets and Provision

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statement, 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 obligation(s), in respect to which an estimate can be made for the amount of obligation.


Mar 31, 2012

1.1 Accounting Concepts

The financial statements have been prepared under the historical cost convention on accrual basis in compliance with applicable accounting standards notified by the companies (Accounting standards) Rules, 2006 and relevant provisions of the Companies Act, 1956.

1.2 Fixed Assets

i) Fixed assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses.

ii) Intangible assets are stated at cost less amortisation.

iii) Pre-operative expenditure during the construction/erection period is included under capital work-in-progress and is allocated to the respective fixed assets on completion of construction/erection.

1.3 Depreciation, Amortisation and Impairment Loss

a) Fixed assets are depreciated using written down value method except fixed assets of the floor tile unit (including vitrified tile plant) and addition made after 1st April, 1995 to plant and machinery of wall tile units, where depreciation is provided on a straight line method, at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plants as defined in Schedule XIV have been considered on technical evaluation. Impaired assets are amortised over the estimated balance useful life.

b) In case of indication of impairment of the carrying amount of the Company's assets, an asset recoverable amount is estimated. Impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

c) Intangible assets being computer software is amortised over a period of five years.

1.4 Transaction of Foreign Currency Items

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Premium in respect of forward contract is accounted over the period of the contract. Exchange differences arising on settlement/translation of monetary items including forward contracts are dealt in the statement of Profit and Loss Account except foreign exchange loss/gain arising after 1st April, 2011 on long-term foreign currency monetary items used for depreciable assets, which are capitalised.

1.2 Investments

Long-term investments are stated at cost less provision for diminution in the value other than temporary. Current investments are stated at cost or market value whichever is lower.

1.6 Inventories

Inventories are valued at lower of cost and net realisable value except waste/scrap which is valued at net realisable value. Cost of raw materials and stores and spare parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

1.7 Revenue expenditure on research and development is charged to Profit and Loss Accounts and capital expenditure is added to fixed assets.

1.8 Interest on Borrowings

Interest on borrowings is charged to the Profit and Loss Account for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalised till the date of commercial use of the asset.

1.9 Employee Benefits:

a Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities), Employees' pension Scheme and Employees' State Insurance are defined as contribution plan and charged as expenses during the period in which the employees perform the services.

b) Defined Benefit Plan:

Retirement benefits in the form of gratuity, long-term compensated leaves; other long-term employee benefit and provident fund (multi-employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, according to the date of the Balance Sheet. Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

c) Short-term employee benefit:

Short-term benefits are charged off at the undiscounted amount in the year in which the related services rendered.

1.10 Government Grants

Grants from government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capital subsidy are credited to capital reserve. Other government grants including incentive, duty drawback among others are credited to Profit and Loss account or deducted from the related expenses.

1.11 Provision for Current and Deferred Tax

Provision for current tax liability of the Company is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognised subject to the consideration of 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.

1.12 Intangible assets are being recognised if the future economic benefits attributable to the assets are expected to flow to the Company and cost of the assets can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Use of accounting estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

1.14 Contingent liability, contingent assets and provision

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statement, 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 obligation(s), in respect to which an estimate can be made for the amount of obligation.


Mar 31, 2011

A) Accounting Concepts

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except where otherwise stated.

b) Fixed Assets

(i) Fixed Assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses.

(ii) Intangible assets are stated at cost less amortisation.

c) Transaction of Foreign Currency Items

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Exchange differences arising on settlement of monetary items at rates different from those at which they were initially recorded are recognised as income or as expenses in the year in which they arise. Premium in respect of forward contract is accounted over the period of the contract.

d) Treatment of Expenditure During Construction Period

Interest and other pre-operative expenditure are included under Capital Work in Progress and are allocated to the respective fixed assets on the installation/completion of the same.

e) Investments

Long Term investments are stated at cost less provision for dimunition in the value other than temporary. Current investments are stated at cost or market value whichever is lower.

f) Inventories

Inventories are valued at lower of cost and net realisable value except waste/scrap which is valued at net realisable value. Cost of Raw Materials and Stores and Spare Parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

g) Interest on Borrowings

Interest on borrowings is charged to the Profit and Loss Account for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalised till the date of commercial use of the asset.

h) Depreciation, Amortisation and Impairment Loss

a) Fixed assets are depreciated using written down value method except fixed assets of the Floor Tile Unit (including Vitrified Tile Plant) and addition made after 1st April, 1995 to plant and machinery of Wall Tile Units, where depreciation is provided on straight line method, at the rates and in the manner specified in schedule XIV of the Companies Act, 1956. Continuous process plant as defined in schedule XIV have been considered on technical evaluation. Impaired assets are amortised over the estimated balance useful life.

b) In case of indication of impairment of the carrying amount of the Company's assets, an asset's recoverable amount is estimated. Impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

c) Intangible assets being computer software is amortised over a period of five years.

i) Employee Benefits:

a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity, Long Term compensated leaves, Other Long Term Employee Benefit and Provident Fund (multi- employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

c) Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

j) Government Grants

Grants from Government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capita subsidy are credited to capital reserve. Other Government grants including incentives, duty drawback etc. are credited to profit and loss account or deducted from the related expenses.

k) Provision for Current and Deferred Tax

Provision for current tax liability of the Company is estimated considering the provisions of the Income Tax Act, 1961.

Deferred Tax is recognised subject to the consideration of prudence 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.

l) Contingent Liability, Contingent Assets & Provisions

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognised or disclosed in the financial statement, 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 obligation(s), in respect of which estimate can be made for the amount of obligation.


Mar 31, 2010

A) Accounting Concepts

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except where otherwise stated.

b) Fixed Assets

(i) Fixed Assets are shown at cost of acquisition and/or construction less accumulated depreciation and impairment losses. (ii) Intangible assets are stated at cost less amortization.

c) Transaction of Foreign Currency Items

Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currencies at the year end translated at exchange rates prevailing on the balance sheet date. Exchange differences arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise. Premium in respect of forward contract is accounted over the period of the contract.

d) Treatment of Expenditure during Construction Period

nterest and other pre-operative expenditure are included under Capital Work in Progress and are allocated to the respective fixed assets on the installation/completion of the same.

e) Investments

Long Term investments are stated at cost less provision for diminution in the value other than temporary. Current investments are stated at cost or market value whichever is lower

f) Inventories

nventories are valued at lower of cost and net realizable value except waste/scrap which is valued at net realizable value. Cost of Raw Materials and Stores and Spare Parts is computed on weighted average basis. Cost of finished goods and stock in process is determined by taking material, labour and related overheads. Cost of finished goods includes excise duty.

g) Interest on Borrowings

nterest on borrowings is charged to the Profit and Loss Account for the year in which it is incurred except interest on borrowings for qualifying fixed assets which is capitalized till the date of commercial use of the asset.

h) Depreciation, Amortization and Impairment Loss

a) Fixed assets are depreciated using written down value method except fixed assets of the Floor Tile Unit (including Vitrified Tile Plant) and addition made after 1st April, 1995 to plant and machinery of Wall Tile Units, where depreciation is provided on straight line method, at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plant as defined in Schedule XIV have been considered on technical evaluation. Impaired assets are amortized over the estimated balance useful life.

(b) In case of indication of impairment of the carrying amount of the Companys assets, an assets recoverable amount is estimated. Impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

(c) Intangible assets being computer software is amortized over a period of five years.

i) Employee Benefits:

(a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity, Long Term compensated leaves, Other Long Term Employee Benefit and Provident Fund (multi-employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(d) Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

j) Government Grants

Grants from Government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of project capital subsidy are credited to capital reserve. Other Government grants including incentives, duty drawback etc. are credited to profit and loss account or deducted from the related expenses.

k) Provision for Current and Deferred Tax

Provision for current tax liability of the Company is estimated considering the provisions of the Income Ta x Act, 1961.

Deferred Tax is recognized subject to the consideration of prudence 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.

l) Contingent Liability, Contingent Assets & Provisions

Contingent liabilities if material, are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statement, a provision is recognized 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 obligation(s), in respect of which estimate can be made for the amount of obligation.

 
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