Mar 31, 2012
I. Revenue recognition
a) Export sales are accounted on shipment of goods from its plant at
Hosur and does not include sales tax and excise duty since the company
is a 100% Export Oriented unit.
b) The Reimbursement of Central Sales Tax is being accounted on accrual
basis, where as Duty Draw Back entitlement is accounted on Cash Basis.
c) Sales of Rejected tiles in DTA are accounted on clearance of goods
from Plant at Hosur exclusive of sales tax and Excise duty.
d) Processing charges are accounted on completion of the work at agreed
value.
ii. Inventories
Raw materials including components, stores and spares are valued at
lower of cost and net realisable value. However, raw materials and
other items held for use in the production of inventories are not
written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost is
determined on a weighted average basis.
Work-in-Progress is valued at cost and finished goods are valued at
lower of cost and net realisable value. Cost includes direct materials
and labour and a proportion of manufacturing overheads based on normal
operating capacity.
iii. Fixed assets
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use, net of refundable
taxes.
iv. Impairment of assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the Profit and Loss Account. If at the Balance Sheet date
there is an indication that if a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
v. Depreciation/amortisation Depreciation on fixed assets is provided
on the Straight Line method, using the rates specified in Schedule XIV
to the Companies, Act, 1956, except that leasehold land is amortized
over the lease period on straight line basis.
Assets individually costing less than Rs. 5,000 are fully depreciated
in the year of purchase.
vi Investments Investments that are readily realisable and intended to
be held for not more than a year are classified as current investments.
All other investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline, other than temporary, in the value of the investments.
vii. Foreign currency transactions Monetary assets and liabilities
related to foreign currency transactions remaining unsettled at the end
of the year are restated at year-end rates. The difference in
translation of monetary assets and liabilities and realised gains and
losses on foreign exchange transactions are recognised in the Profit
and Loss Account.
Non-monetary items denominated in foreign currency:
(a) which are carried in terms of historical costs are reported using
the exchange rate at the date of transaction.
(b) which are carried at fair value or other similar valuation are
reported using the exchange rate that existed when the values are
determined.
viii. Leases
Operating lease payments are recognised as an expense in the Profit and
Loss Account on a straight line basis.
ix. Earnings per share
Basic earnings/(loss) per share is calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting preference dividends, if any and attributable taxes) by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings/(loss) per share, the
net profit or loss for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
x. Retirement benefits
a) Provident fund Contributions payable to the Recognised Provident
Fund, which is a defined contribution scheme, is recognised as an
expense in the period in which services are rendered by the employee.
b) Gratuity Provision towards gratuity is provided at each year as per
actuarial valuation. However, the same is not funded. Actuarial gains
or losses arising from experience adjustments and changes in actuarial
assumptions are credited or charged to the Profit and Loss Account in
the year in which such gains or losses arises.
c) Leave Encashment The company extends the benefit of encashment of
leave entitlements to its employees, while in service as well as on
retirement. Actuarial gains or losses arising from experience
adjustments and changes in actuarial assumptions are credited or
charged to the Profit and Loss Account in the year in which such gains
or losses arises.
xi. Taxes on income
Current tax
Provision is made for income tax under the tax payable method, based on
the liability computed, after taking credit for allowances and
exemptions.
Deferred tax
Deferred Income Taxes resulting from timing difference between book and
taxable profit is accounted for using the rates and laws that have been
enacted or substantially enacted as at the balance Sheet date. The
Deffered Tax asset is recognised and carried forward only to the extent
there is a reasonally certainity that the asset can be realised in
future.
xii. Provisions and contingent liabilities The Company creates a
provision when there is a present obligation as a result of a past
event that probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. A disclosure for
a contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow
of resources. When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
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