SENSEX NIFTY India | Accounting Policy > Engineering > Accounting Policy followed by Terruzzi Fercalx India - BSE: 522080, NSE: VULCANENG
Terruzzi Fercalx India
BSE: 522080|NSE: VULCANENG|ISIN: INE699C01017|SECTOR: Engineering
Nov 13, 16:01
Terruzzi Fercalx India is not traded in the last 30 days
« Dec 12
Accounting Policy Year : Dec '13
a) Basis of accounting:
 The financial statements have been prepared in compliance with all
 material aspects of the Accounting Standards prescribed in the
 Companies (Accounting Standards) Rules, 2006 issued by the Central
 Government, to the extent applicable.
 These accounts are prepared on historical cost convention (except
 certain fixed assets which are at revalued amounts) and on the
 accounting principle of going concern basis.
 The Company follows mercantile system of accounting and recognizes
 income and expenditure on accrual basis except those with significant
 b) Use of estimates:
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affects the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities on the
 date of financial statements and reported amounts of revenue and
 expenses for that year. Although these estimates are based upon
 management''s best knowledge of current events and actions, actual
 results could differ from these estimates.
 c) Fixed assets:
 Fixed assets are stated at cost of acquisition (which includes freight,
 duties, taxes and incidental expenses) or at revalued amount (wherever
 the assets are revalued) less accumulated depreciation.
 Computer software, where it is expected to provide future enduring
 economic benefits is capitalised. The capitalised cost includes license
 fees and cost of implementation / system integration services.
 d) Depreciation and amortization:
 Depreciation on assets is provided on straight-line method on pro-rata
 basis at the rates and in the manner specified in Schedule XIV of the
 Companies Act, 1956. The value of leasehold land is amortised over the
 period of the lease and sheds and portable units are amortised over a
 period of 12.5 years.
 Capitalised software costs are amortised on straight line method over
 their useful lives as estimated by management.
 e) Revenue recognition:
 Revenue in respect of sale of goods is recognised when significant risk
 and rewards of ownership are transferred to the customers.
 Revenue from construction contracts is recognised on the percentage of
 completion method, measured by the proportion that contract costs
 incurred for work performed till the reporting date bear to the
 estimated total contract cost. Contract cost for this purpose includes:
 a) Costs that relate directly to the specific contract;
 b) Costs that are attributable to contract activity in general and can
 be allocated to the contract: and
 c) Such other costs as are specifically chargeable to the customer
 under the terms of contract.
 Foreseeable losses, if any, are provided for immediately.
 Revenue from services is recognised on accrual basis as per terms of
 the contractual agreement.
 f) Inventories:
 Material and components are valued at lower of cost or net realisable
 value. Cost is ascertained on first-in first-out (FIFO) basis.
 g) Foreign currency transactions:
 Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of such transactions. Monetary assets and
 liabilities as at the Balance Sheet date are translated at the rates of
 exchange prevailing at the date of the Balance Sheet. Gains and losses
 arising on account of differences in foreign exchange rates on
 settlement/ translation of monetary assets and liabilities are
 recognised in the statement of profit and loss. Non-monetary foreign
 currency items are carried at cost.
 h) Retirement benefits:
 Provident fund contributions payable are charged to statement of profit
 and loss.
 Liability for accumulated leave is provided on the basis of actuarial
 valuation as at the year-end.
 Liability for gratuity is provided on the basis of actuarial valuation
 as at the year end and funded with Life Insurance Corporation of India.
 i) Lease:
 Leases where the lessor effectively retains substantially all the risks
 and benefits of the lease term are classified as operating leases.
 Lease rentals in respect of properties acquired under operating leases
 are charged off to the statement of profit and loss as incurred.
 j) Accounting for taxes on income:
 Tax expenses comprises of current tax and deferred tax.
 Current tax represents tax on profits for the current year as
 determined as per the provisions of the Income Tax Act, 1961.
 The deferred tax for timing differences between the book and tax
 profits for the year are accounted based on tax rates in force and tax
 laws that have been enacted or substantively enacted as of the balance
 sheet date. Deferred tax assets arising from timing differences, are
 recognised to the extent there is reasonable / virtual certainty that
 these would be realized in future and are reviewed for the
 appropriateness of their respective carrying values at each balance
 sheet date.
 k) Accounting for provisions and contingent liabilities:
 A provision is made 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.
 Provisions are not discounted to its present value and are determined
 based on best estimate required to settle the obligation at the balance
 sheet date.  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. Where there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision or disclosure is made.
 l) 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 management estimates the recoverable amount of the asset.
 If such recoverable amount of the asset is less than its carrying
 amount, the carrying amount is reduced to its recoverable amount. The
 reduction is treated as an impairment loss and recognised in the
 statement of profit and loss. If, at the balance sheet date, there is
 an indication that 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.
 m) Earnings per share
 The basic earnings per share (EPS) is computed by dividing the net
 profit or loss after tax for the year available for the equity
 shareholders by the weighted average number of equity shares
 outstanding during the year. For the purpose of calculating diluted
 earnings per share, net profit or loss after tax for the year available
 for equity shareholders and the weighted average number of shares
 outstanding during the year are adjusted for the effects of all
 dilutive potential equity shares.
Source : Dion Global Solutions Limited
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