Home  »  Company  »  OCL India Limi  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of OCL India Ltd. Company

Mar 31, 2016

1.1. Accounting Convention

The Financial Statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards notified under relevant provisions of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise.

1.3. Fixed Assets including intangible Assets

Land, Building, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation. Capital Work in Progress & Intangible Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II), Captive Power Plant, Bengal Cement Works & Solar Power Plant provided on reducing balance method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act,2013. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the assets'' economic benefit are consumed. The useful life has been estimated as 3-5 years in case of computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or quoted / fair value whichever is lower.

1.6. Inventories

Stocks of finished goods and work in progress are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / weighted average basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales and respective export incentives are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystallization. Income from services is accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for when the right to receive the same is established.

1.8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to Gratuity Fund and provision for Leave Encashment are made on the basis of actuarial valuation.

1.9. Government Grants and Subsidies:

Grants and subsidies from government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant or subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and recognised to income in equal amounts over the expected useful life of the related asset. Where the Company receives non-monetary grants the asset is accounted on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognised at a nominal value.

1.10. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.11. Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference is recognised in the Statement of Profit and Loss. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalised and depreciated over the remaining useful life of such asset. Exchange Differences arising on other long term foreign currency monetary items are accumulated in the ''Foreign Currency Monetary Item Translation Difference Account'' and amortised over the remaining life of concerned monetary item. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1 .1 2. Leases

Since significant portion of risks and rewards are retained by lessor in respect of assets taken on lease, they are classified as operating lease and the lease rentals are charged off to revenue account.

1.13. Deferred Tax

In accordance with Accounting Standard- AS22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.14. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.15. Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. Disclosure of Contingent Liabilities are made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets are neither recognised nor disclosed in the financial statement.


Mar 31, 2015

1.1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards notified under relevant provisions of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3. Fixed Assets including intangible Assets.

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation. Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II), Captive Power Plant, Bengal Cement Works & Solar Power Plants provided on reducing balance method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act,2013. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 years in case computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or quoted / fair value which ever is lower.

1.6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales and respective export incentives are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8. treatment of employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9. Research and development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.10. Foreign Currency transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1.11. Deferred Tax

In accordance with Accounting Standard- AS22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.13. Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2014

1.1 Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2 Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are ecognised in the period in which they materialise

1.3 Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation.Capital Work in Progress & ntangilbe Assets under development are shown at cost

1.4 Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-ll), Captive Power Plant & Bengal Cement Works is provided on reducing balance method . Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible assets is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 yeaRs in case computer software.

1.5 nvesments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investment are valued at cost or fair value which ever is lower.

1.6 nventories

Stocks of finished and partly finished products are valued at ower of cost or net realisable value and for this purpose, cost s determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7 Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customeRs Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but nclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis Dividend income is accounted for, when the right to receive the same is established.

1.8 Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9 Research and Development

Revenue expenses are charged off in the year in which it s incurred under the natural heads of account. Capital expenditure, when incured is added to the cost of fixed assets.

1.10 Foreign Curency Transactions

Foreign currency transactions are recorded at exchange ate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non- monetary items denominated in foreign currency are valued at the exchange rate prevailng on the date of transaction.

1.11 Defered Tax

n accordance with Accounting Standard-22 ''Taxes on ncome, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of eveRsal in subsequent year.

1.12 mpairment of Asets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount

1.13 Provisions, Contingent Liabiity and Contingent Asets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability s made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement

b) erm/ rights attached to ordinary shares

The Company has issued only one class of ordinary shares having a par value of XII- per share. Each holder of ordinary shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of DirectoRs is subject to the approval of the shareholdeRs in the ensuing Annual General Meeting.

During the year ended 31st March 2014, the amount of dividend per share recognised for disribution to ordinary shareholdeRs is Rs4/- (Previous year: Interim Dividend Rs2.50/- and Final dividend Rs1.50/- per share)

n event of liquidation of the company, the holdeRs of ordinary shares will be entited to receive remaining asets of the company after distribution of all preferential amounts

The distribution will be in proportion to the number of ordinary shares held by the shareholder

The debentures are secured by way of fiRst pari passu charge over fixed assets (present and future) of Cemet Division of the Company except those to Syndicate Bank are additionaly secured by way of fiRst pari-passu charge on Fixed Asets of Refractory Divison of the Company

# Secured by FiRst pari passu charge by way of mortgage and hypothecation over all immovable properties and moveable fixed assets of Cement Division, (both present and future) and further secured by second pari pasu charge on all current assets of the Company.

$ Secured by FiRst charge on fixed assets of the Cement Division of Company, both present and future to be shared pari passu with the provideRs of the other debt and existing lendeRs, further secured by way of second pari pasu charge on current assets of Cement Division.

@ Secured by FiRst rnking ortgage and Hypothecation all immovable & movable, present & future assets related to the Cement Division (excluding Current Assets) to be shared pari passu wih other lendeRs in respect of other debts and existing secured endeRs to the Cement Divison in respect of the existing debt

"Working capital facilities (fund based & non fund based limits) are secured by fiRst pari passu charge over stocks, stores, raw materials, inventories work in progress, finished goods and also book debts bills and moneys receivable of the Company by way of hypothecation. These facilities are further secured by second charge over the fixed assets of the Cement Division of the Company $ BuyeRs credit is secured by subservient charges on moveable fixed asets of cement divison of the company


Mar 31, 2013

1.1 Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2 Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3 Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation.Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4 Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II) & Captive Power Plant is provided on reducing balance method . Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible assets is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 years in case computer software.

1.5 Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary . Current Investment are valued at cost or fair value which ever is lower.

1.6 Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7 Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8 Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9 Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.10 Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1.11 Deferred Tax

In accordance with Accounting Standard-22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12 Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.13 Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2012

1.1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2. Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3. Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31. 12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortization Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-ll) & Captive Power Plant is provided on reducing balance method. Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the asset's economic benefits are consumed. The useful life has been estimated as five years in case computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or fair value which ever is lower.

1.6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1. 10. Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/ liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1. 11. Deferred Tax

In accordance with Accounting Standard-22 Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

1.13. Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2011

A) Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

b) Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

c) Fixed Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised.

d) Depreciation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works and Clinkerisation Unit at Rajgangpur (Line-II) is provided on reducing balance method. Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956.

e) Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at Cost or Fair Value which ever is lower.

f) Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

g) Revenue Recognition and Accounting for Sales

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

h) Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

i) Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

j) Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Profit and Loss Account. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Profit & Loss Account. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

k) Taxation

Current Tax provision is made on the assessable income at the tax rate applicable to the relevant Assessment Year. The Deferred tax asset and Deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets arising on account of 'Timing Differences' are recognised, only to the extent there is a reasonable certainty of its realisation.

l) Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

m) Provisions and Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.

 
Subscribe now to get personal finance updates in your inbox!