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Accounting Policies of Chhattisgarh Industries Ltd. Company

Mar 31, 2015

1. CORPORATE INFORMATION

Chhattisgarh Industries Limited is a public limited company domiciled in India under the provisions of the Companies Act, 2013 (erstwhile Companies Act 1956). The Company is engaged in manufacturing and selling of coal/coke.

a) BASIS OF ACCOUNTING

The financial statements of Chhattisgarh Industries Limited ("the Company") have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 133 of the Companies Act, 2013, other pronouncements of Institute of Chartered Accountants of India and the other provisions of Companies Act, 2013. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities. The company follows the accrual system of accounting for recognizing income and expenditure.

b) USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

c) REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Sale of goods:

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer.

Sale of scrap:

Revenue from sale of scrap is recognized as and when scrap is sold.

d) FIXED ASSETS AND DEPRECIATION

Tangible Assets:

Fixed assets are carried at the cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

Depreciation and amortization:

Depreciation on fixed assets is charged as per Straight Line Method as per the rates specified under schedule II of the Companies Act, 2013.

e) EMPLOYEE BENEFITS

All short-term and long term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

f) EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

g) TAXATION

Provision for current tax is made for the tax liability payable on taxable income after considering the allowances, deductions and exemptions and disallowances if any determined in accordance with the prevailing tax laws. The differences between the taxable income and the net profit or loss before tax for the period as per the financial statements are identified and the tax effect on the "timing differences" is recognized as deferred tax asset or deferred tax liability. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the tax rates and laws, enacted or substantively enacted as of the balance sheet date.

h) PROVISIONS,CONTINGENT LIABILITES AND CONTINGENT ASSETS:

The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the outflow. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the company. Contingent Assets are neither recognized nor disclosed in the Financial Statements as a matter of prudence.


Mar 31, 2014

A. Basis of Preparation of Financial Statements

The financial statements have been prepared with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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. The financial statements have been prepared under the historical cost convention on an accrual basis. The accountings policies have been consistently applied by the Company and are consistent with those used in the previous period.

b. Use of Estimates

The preparation of the financial statements requires the management to take reasonable estimates and assumption that affect the reported amount of assets, liabilities and disclosure of contingent liabilities as at the date of the financial statements. Management believes that these estimates are reasonable and prudent. However, actual results may differ from estimates.

c. Cash Flow Statements

Cash flow statement of the company reports cash flows during the period classified by operating, investing and financial activities.

d. Revenue Recognition

Incomes/Expenses/Revenues are accounted for on accrual basis. Revenue is recognised to the extent that it is probable that the economic benefit will flow to the company and the revenue can be reliably measured.

e. Fixed Assets

Fixed Assets are stated at cost including all incidental expenses incurred for bringing the asset to its current position, less depreciation at rates prescribed in Schedule XIV to the Companies Act, 1956, subject to provisions of Accounting Standard 26 "Intangible Assets".

f. Depreciation

Depreciation has been provided on Straight Line Method in accordance with section 205(2) of the Companies Act, 1956 at the rates specified in schedule XIV to the Companies Act, 1956, on pro-rata basis with reference to the period of use of such assets. Assets costing less than Rs.5,000/- per item are depreciated at 100% in the year of purchase.

g. Impairment of Assets

The carrying amounts of Cash Generating Assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated at the higher of net realisable value and value in use. Impairment loss is recognised wherever carrying amount exceeds the recoverable amount.

h. Retirement Benefits

All short-term and long term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred.

i. Income Tax

Provision for current tax is made for the tax liability payable on taxable income after considering the allowances, deductions and exemptions and disallowances if any determined in accordance with the prevailing tax laws. The differences between the taxable income and the net profit or loss before tax for the period as per the financial statements are identified and the tax effect on the "timing differences" is recognised as deferred tax asset or deferred tax liability. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the tax rates and laws, enacted or substantively enacted as of the balance sheet date.

j. Provisions, Contingent Liabilities & Contingent Assets

The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the outflow.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the company.

Contingent Assets are neither recognized nor disclosed in the Financial Statements as a matter of prudence


Mar 31, 2012

A) The Company prepares its accounts on the basis of historical cost convension and incomes and expenditure are recognized on accrual basis.

b) No provision for gratuity and other retirement benefits have been made in the accounts on accrual basis.

c) Inventories are taken, valued and certified by the management. However as informed valuation are done on the basis of cost or market price whichever is lower.

d) Quoted Securities has been valued at cost or market price whichever is lower and unquoted at cost.


Mar 31, 2010

A) The Company prepares its accounts on the basis of historical cost convention and incomes and expenditure are recognized on accrual basis.

b) No provision for gratuity and other retirement benefits have been made in the accounts on accrual basis.

c) Inventories are taken, valued and certified by the management. However, as informed valuation are done on the following basis:-

a) Quoted Securities has been valued at cost or market price whichever is lower and unquoted at cost.

 
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