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Chettinad Cement Corporation Ltd. Accounting Policies | Accounting Policy of Chettinad Cement Corporation Ltd.
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Accounting Policies of Chettinad Cement Corporation Ltd. Company

Mar 31, 2014

A. Use of Estimates

Financial Statements are prepared in conformity with Indian GAAP that requires Management to make Estimates and Assumptions which affect the reported amounts of Assets and Liabilities and disclosure of Contingent Liabilities at the date of the Financial Statements and the Results of Operations during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results may differ.

b. Fixed Assets

Fixed Assets including Capital Work-in-progress are stated at cost net of CENVAT and Input Tax Credit. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised.

Depreciation is provided on Fixed Assets as per the rates and procedures prescribed under the Income Tax Act, 1961 & Income Tax Rules, 1962 on Written Down Value Method as follows:

1. Goodwill 25%

2. Buildings

a) Factory Buildings 10%

b) Residential Buildings 5%

3. Furniture & Fixtures 10%

4. Plant & Machinery

a) General 15%

b) Pollution Control Equipments 100%

c) Computers 60%

5. Windmill 80%

6. Earth Moving Equipment & Vehicles 15%

7. Railway Sidings 15%

Government Grants relating to specific fixed assets are shown as deduction from gross value of such assets.

Leasehold Land is amortised over the period of lease.

Depreciation/ Depletion is provided on Quarry Freehold Lands based on the proportion of quantity of Limestone extracted to the Total Mineable Reserves.

c. Investments

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.

d. Revenue recognition

Sales are inclusive of Excise Duty and Net of Rebate and Value Added Tax. Excise Duty payable is accounted on production of Finished Goods.

e. Retirement and Other Employee Benefits

i. Liability towards Gratuity is covered by a Group Gratuity Scheme with Life Insurance Corporation of India and annual contribution is based on actuarial valuation.

ii. Provident Fund contribution is made at the prescribed rates under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952

iii. Leave Encashment is accounted on the basis of actuarial valuation.

iv. Expenditure in respect of voluntary retirement as per Company''s Scheme is written off in the year in which they are incurred.

f. Inventories

Inventories are valued at lower of Cost computed on Weighted Average Method and Net Realisable Value.

g. Foreign Exchange Transactions

Foreign Currency transactions are recorded at the Exchange Rates prevailing on the date of the transaction.

Monetary Foreign currency Assets and Liabilities (Monetary Items) are reported at the exchange rate prevailing on the Balance Sheet date. Pursuant to the notification of the Companies (Accounting Standards) Amendment Rules, 2006 on 31st March, 2009, which amended Accounting Standard 11 on The Effects of Change in Foreign Exchange Rates, exchange differences relating to Long Term Monetary Items are dealt with in the following manner

i. Exchange differences relating to Long-Term Monetary Items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to/deducted from the cost of the asset and depreciated over the balance life of the asset.

ii. In other cases such differences are accumulated in a "Foreign Currency Monetary Item Transaction Difference Account" and amortized to the Statement of Profit and Loss over the balance life of the Long-Term Monetary Item, however that the period of amortization is upto 31st March 2020.

All other exchange differences are dealt with in the Statement of Profit and Loss.

Non-Monetary Items such as Investments are carried at historical cost using the exchange rates on the date of the transaction.

h. Income Taxes

Current Tax is the amount of tax payable in respect of Taxable Income for the year. 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. Deferred Tax Assets is not recognised on Unabsorbed Depreciation and Carry Forward Losses unless there is a Virtual Certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realised.

i. Liabilities of Contingent nature have been disclosed separately, j. Cash and Cash Equivalents

j. Cash and Cash Equivalents for the purposes of Cash Flow Statement comprise Cash at Bank and in Hand and Short-Term Investments with an original maturity of three months or less.

k. Revenue Expenditure including Overheads on Research & Development is charged as an expense through the relevant heads of account in the year in which they are incurred. Research & Development Expenditure which results in the creation of capital assets is taken as Fixed Assets and Depreciation is provided over such assets.


Mar 31, 2013

A. Use of estimates

Financial statements are prepared in conformity with Indian GAAP that requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the. reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results may differ.

b. Fixed Assets

Fixed assets including capital work-in-progress are stated at cost net of CENVAT and Input Tax Credit. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized.

Depreciation is provided on Fixed Assets as per the rates and procedures prescribed under Income Tax Act, 1961 & Income Tax Rules, 1962 on Written Down Value Method as follows:

Government grants relating to specific fixed assets are shown as deduction from gross value of such assets.

Leasehold land is amortized over the period of lease.

Depreciation / Depletion is provided on quarry freehold lands based on the proportion of quantity of Limestone extracted to the total mineable reserves.

c. Investments

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

d. Revenue recognition

Sales are inclusive of excise duty and net of rebate and Value Added Tax.

Excise duty payable is accounted on production of finished goods.

e. Retirement and other employee benefits

i. Liability towards Gratuity is covered by a group gratuity scheme with Life Insurance Corporation of India and annual contribution is based on actuarial valuation.

ii. Provident Fund contribution is made at the prescribed rates under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

iii. Leave encashment is accounted on the basis of actuarial valuation.

iv. Expenditure in respect of voluntary retirement as per Company''s Scheme is written off in the year in which they are incurred.

f. Inventories

Inventories are valued at lower of cost computed on weighted average method and net realizable value.

h. Income taxes

Current tax is the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, subject to the consideration of prudence, on timing differences, benighted difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets is not recognized on unabsorbed depreciation and carry forward losses unless there is a virtual certainty that sufficient future tax able income will be available against which such deferred tax assets can be realized.

i. Liabilities of contingent nature have been disclosed separately, j. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less, k. Revenue expenditure including overheads on Research £r Development is charged as an expense through the relevant heads of account in the year in which they are incurred. Research £r Development expenditure which results in the creation of Capital assets is taken as Fixed Assets and Depreciation is provided over such assets.


Mar 31, 2012

1. Basis of accounting, presentation and disclosure of financial statements

Financial statements have been prepared complying in all material respects with the Accounting standards notified by Companies (Accounting Standards) Rules,2006,(as amended) and the relevant provisions of the Companies Act, 1956. Financial statements have been prepared under the historical cost convention on an accrual basis. The accounting Policies have been consistently applied by the Company and are Consistent with those used in the Previous Year.

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The previous year's figures have also been reclassified accordingly.

2. Summary of significant accounting Policies

a. Use of estimates

Preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

b. Fixed Assets

Fixed assets including capital work in progress are stated at cost net of CENVAT and Input Tax Credit. The borrowing cost directly attributable to the acquisition, construction or production of qualifying assets are capitalised. In respect of new projects the interest on loans and expenses (net) relating thereto are capitalised as part of cost till the assets are put to use.

Depreciation is provided on Fixed Assets as per the rates and procedures prescribed under Income Tax Act, 1961 on Written Down Value Method as follows

1. Goodwill 25%

2. Building

a) Factory Building 10%

b) Residential Buildings 5%

3. Furniture & Fixtures 10%

4. Plant & Machinery

a) General 15%

b) Pollution Control Equipments 100%

c) Computers 60%

5. Windmill 80%

6. Earth Moving Equipment & Vehicles 15%

7. Railway Sidings 15%

Government grants relating to specific fixed assets are shown as deduction from gross value of such assets.

Leasehold land is amortised over the period of lease.

Depreciation/ Depletion is provided on quarry freehold lands based on the proportion of quantity of Limestone extracted to the total mining reserves.

c. Investments

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.

d. Revenue recognition

Sales are inclusive of excise duty and net of rebate and Value Added Tax. Excise duty payable is accounted on production of finished goods.

e. Retirement and other employee benefits

i. Liability towards Gratuity is covered by a group gratuity scheme with Life Insurance Corporation of India and annual contribution is based on actuarial valuation.

ii. Provident Fund contribution is made at the prescribed rates under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952

iii. Leave encashment is accounted on the basis of actuarial valuation.

iv. Expenditure in respect of voluntary retirement as per Company's Scheme is written off in the year in which they are incurred.

f. Inventories

Inventories are valued at lower of cost computed on weighted average method and net realisable value

g. Foreign exchange transactions

Foreign Currency transactions are recorded at the exchange rates prevailing on the date of the transaction.

Monetary Foreign currency assets and liabilities (monetary items) are reported at the exchange rate prevailing on the balance sheet date. Pursuant to the notification of the Companies (Accounting Standards) Amendment Rules, 2006 on 31st March, 2009, which amended Accounting Standard 11 on The Effects of Change in Foreign Exchange Rates, exchange differences relating to long term monetary items are dealt with in the following manner :- i. Exchange differences relating to long-term monetary items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to/deducted from the cost of the asset and depreciated over the balance life of the asset.

ii. In other cases such differences are accumulated in a "Foreign Currency Monetary Item Transaction Difference Account" and amortized to the profit and loss account over the balance life of the long-term monetary item, however that the period of amortization does not extend beyond 31st March 2012.

All other exchange differences are dealt with in the profit and loss account.

Non-monetary items such as investments are carried at historical cost using the exchange rates on the date of the transaction.

h. Income taxes

Current tax is the amount of tax payable in respect of taxable income for the year. 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. Deferred tax assets will not be recognised on unabsorbed depreciation and carry forward losses unless there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

i. Liabilities of contingent nature have been disclosed separately.

j. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

k. Revenue expenditure including overheads on Research & Development is charged as an expense through the relevant heads of account in the year in which they are incurred. Research & Development expenditure which results in the creation of Capital assets is taken as Fixed Assets and Depreciation is provided over such assets.


Mar 31, 2011

A) The Financial statements are prepared under historical cost convention and in accordance with generally accepted accounting practices and mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the relevant Provisions of the Companies Act, 1956. Revenues are recognised and expenses are accounted on accrual basis.

b) Sales are inclusive of excise duty and net of rebate and Value Added Tax.

c) Fixed assets including capital work in progress are stated at cost net of CENVAT and Input Tax Credit. The borrowing cost directly attributable to the acquisition, construction or production of qualifying assetsare capitalised. In respect of new projects the interest on loans and expenses (net) relating thereto are capitalised as part of costtill the assets are put to use.

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

3) Depreciation/ Depletion is provided on quarry freehold lands based on the proportion of quantity of Limestone extracted to the total mining reserves.

e) Long Term Investments are carried at Cost less any diminution in value, that is other than temporary.

f) Retirement Benefits:

i. Liability towards Gratuity is covered by a group gratuity scheme with Life Insurance Corporation of India and annual contribution is based on actuarial valuation.

ii. Provident Fund contribution is made at the prescribed rates underthe Employees' Provident Fundsand Miscellaneous Provisions Act, 1952

iii. Leave encashment is accounted on the basis of actuarial valuation.

iv. Expenditure in respect of voluntary retirement as per Company's Scheme is written off in the year in which they are incurred.

g) Foreign Currency transactions are recorded at the exchange rates prevailing on the date of the transaction.

Monetary Foreign currency assets and liabilities (monetary items) are reported at the exchange rate prevailing on the balance sheet date. Pursuant to the Notification of the Companies (Accounting Standards) Amendment Rules, 2006 on 31s' March, 2009, which amended Accounting Standard 11 on The Effects of Change in Foreign Exchange Rates, exchange differences relating to long term monetary items are dealt with in the following manner :-

i. Exchange differences relating to long-term monetary items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to/deducted from the cost of the asset and depreciated over the balance life of the asset.

ii. In other cases such differences are accumulated in a "Foreign Currency Monetary Item Transaction Difference Account" and amortized to the profit and lossaccountoverthe balance

life of the long-term monetary item, however that the period of amortization does not extend beyond 31" March 2012.

All other exchange differences are dealt with in the profit and loss account.

Non-monetary items such as investments are carried at historical cost using the exchange rates on the date of the transaction.

h) Inventories are valued at lower of cost computed on weighted average method and net realisable value.

i) Liabilities of contingent nature have been disclosed separately.

j) Government grants relating to specific fixed assets are shown as deduction from gross value of such assets.

k) Excise duty payable is accounted on production of finished goods.

l) Current tax is the amount of tax payable in respect of taxable income for the year. 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. Deferred tax assets will not be recognised on unabsorbed depreciation and carryforward losses unless there is a virtual certaintythat sufficient future taxable income will be available against which such deferred tax assets can be realised.

m) Revenue expenditure including overheadson Research & Development is chargedasan expense through the relevant heads of account in the year in which they are incurred. Research & Development expenditure which results in the creation of Capital assets is taken as Fixed Assets and Depreciation is provided over such assets.


Mar 31, 2010

A) The Financial statements are prepared under historical co -st convention a nd in a ceo rd a nee with generally accepted accounting practices and mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the relevant Provision 5 of the Companies Act, 1956. Revenues a recognised and expenses are accounted an accrual basis.

b) Sales are inclusive of excise duty and net of rebate and Value Added Tax,

c) Fixed assets including capital work in progress are stated at cost net of CEN VAT and Value Added Tax Cred it. The borrowing cost directly attributable to the acquisition, construction or product 10 n of qu alifying assets are capitalised. In respect of new projects the interest on loans and expenses (net) relating thereto are capitalised as part of cost til I the assets are put to use,

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

3) No depreciation is provided on quarry freehold lands.

e) Long Term Investments are carried at Cost less any dimunition in value, that is other than temporary.

f) Retirement Benefits:

i. Liability towards Gratuity is covered by a group gratuity scheme with Life Insurance Corporation of India and annual contribution is based on actuarial val uation.

ii. Contribution to Superannuation Fund is accounted as per Companys scheme.

iii. Provident Fund contribution is made at the prescribed rates under the EmployeesProvident Fundsand Miscellaneous Provisions Act, 1952

iv. Leave enca s h ment is accou n ted on the bas i s of actu a ria I va I uation.

v. Expenditure in respect of voluntary retirement as per Companys Scheme is written off in the year in which they are incurred,

g) Foreign Currency transactions are recorded atthe exchange rates prevailing on the date of the transaction.

Monetary Foreign currency assets and liabilities (monetary items)are reported atthe exchange rate prevailing on the balance sheet date. Pursuant to the notification of the Companies (Accounting Standards) Amendment Rules, 2006 on ji!I March, 2009, which amended Accounting Standard 11 on The Effects of Change in Foreign Exchange Rates, exchange differences relating to long term monetary items aredealt with in the following manner ;-

ii. In other cases such differences are accumulated in a "Foreign Currency Monetary Item Transaction Difference Accounfand amortized to the prof it and loss account over the balance lifeof the long-term monetary item, however that the period of amortization does not extend beyond 31" March 2011,

All other exchange differences are dealt with in the profit and loss account.

Non -monetary items such as in vestments are carried at historical cost using the exchange rates on the date of thetransaction,

h) Inventoriesare valued at lower of cost computed on weighted average method and net realisable value.

i) Liabilities of contingent nature have been disclosed separately.

j) Gove rnment grantsrelat Ingto specific fixed assets are shown as deduction fromgross vaIue of such assets.

k) Excise duty payableis accounted on production of finished goods.

l) Current tax is the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised, s u bject to the co ns id erat i 0 n of prudence, on tirni n g d if ferences, be ing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets will not be recognised on unabsorbed depreciation and carry forward losses unless there is a virtual certainty that sufficient future taxable income will be ava ilableagainst which such deferred tax assetscanberealised.

m) Revenue expenditure including overheads on Research & Devel opment i s charged as a n expense through the relevant heads of account in the year in which they are incurred- Research & Development expe nditure which results in the creation of Capital assets is taken as Fixed Assets and Depreciation is provided over such assets.

 
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