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Accounting Policies of Panyam Cements & Mineral Industries Ltd. Company

Mar 31, 2015

A. Basis of Preparation and Presentation of Financial Statements:

The financial statements are prepared under the historical cost convention as a going concern and in accordance with Accounting principles generally accepted in India and the provisions of The Companies Act, 2013. The Company follows the mercantile method of accounting.

B. Inventories:

Inventories of Finished goods and process stocks are valued at lower of cost or net realizable value. Inventories of Raw materials and Stores & Spares are valued at waited average cost. Scrap and disposables are valued at net realizable value. Cost of Inventories consist of purchase price including duties and taxes ( other than CENVAT credit and input tax credit recoverable under A.P. VAT Act), cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Value of finished goods includes central excise duty as cost of production in accordance with Accounting Standard (AS-2).

C. Depreciation:

Depreciation is provided on straight line method in respect of plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 up to 31.03.2014 and from 01.04.2014 depreciation has been provided on the same method on the basis of useful lives of the assets in accordance with the provisions of Schedule II to the Companies Act, 2013 Change in Accounting Policy of Depreciation on Fixed Assets:

Consequent to the provisions of New Companies Act, 2013, there is a change in accounting policy of Depreciation. As per Section 123 and Schedule II of Companies Act, 2013 depreciation is to be provided based on useful lives of assets as specified in the Schedule II. Accordingly, we have adopted the useful lives of fixed assets as prescribed in Schedule II to the Companies Act, 2013, for all the fixed assets, except, for Buildings-Factory (i.e. 28 years adopted as against 30 years prescribed) Buildings-Residential & Non Factory (i.e. 58 years adopted as against 60 years prescribed) Buildings-Others(temporary) (i.e. 2 years adopted as against 3 years prescribed) continuous process plants (i.e.18 years adopted as against 25 years prescribed) and Thermal Power Plant (i.e. 20 years adopted as against 40 years prescribed) Plant and Machinery-others (i.e.18 years adopted as against 40 years prescribed) Ropeways (i.e. 9 years adopted as against 15 years prescribed). For these class of assets, based on internal assessment and past experience of the company and the technical evaluation report, the Management believes that the previously assessed useful lives as given above best represent the period expected to use these assets. Though the useful lives for these assets is different, but it is less than the useful lives prescribed under Part C of Schedule II to the Companies Act, 2013.

On account of change in accounting policy of depreciation, it will have impact on financial results of this year and future years. Therefore, as a result of change in depreciation policy stated above based on useful lives of assets, the depreciation charged during the year amounts to Rs.592.50 lakhs as against the depreciation of Rs. 663.60 lakhs as per the earlier method i.e. at the rates as prescribed under Schedule XIV to the Companies Act, 1956.

D. Retirement Benefits to Employees:

Gratuity /superannuation and leave encashment benefits payable on retirement / resignation of employees provided on retirement/ payment.

E. Revenue Recognition:

(i) Sales revenue is recognized on supply of goods. Gross Turnover includes VAT, Excise Duty and Education Cess in respect of goods sold. Income and Expenditure are recognized on accrual basis except for transactions below Rs.10,000/- per transaction and are accounted in the year of payment / receipt.

(ii) Dividend on investments is recognized when the right to receive is established.

(iii) Interest on delay payments to creditors / by debtors accounted on the basis of debit notes Credit notes raised / received from the parties.

(iv) Insurance claims are accounted on the basis of claims lodged.

(v) Interest/Hire Charges on Hire Purchase Loans taken into account on due and payable basis.

F. Investments:

Long term investments are stated at cost of acquisition and if there is permanent diminution in the value of investments, the same is considered for valuation of investments. Current investments are valued at lower of cost or fair market value.

G. Fixed Assets and Capital works-in-progress

Fixed Assets are stated at cost (net of CENVAT credit and including related financial costs till commencement of commercial production) less accumulated depreciation. Capital work-in progress includes indirect cost and pre-operative expenses related or attributable to the capital works and trial run expenses incurred up to commencement of commercial production are added to the cost of fixed assets. Advance paid towards the acquisition of Fixed Assets outstanding at the Balance Sheet Date are disclosed as "Capital Advances" under long term loans and advances as per revised Schedule II to the Companies Act, 2013.

H. Borrowing Costs:

Interest and other costs incurred in connection with the borrowing of funds that are directly attributable to the acquisition, construction or erection of a qualifying asset, are capitalised as cost of such asset and the other borrowing costs are expensed in the year in which incurred.

I. Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

J. Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

K. Accounting for taxes on income:

Current tax and deferred tax liability, if any, for the year is recognized for tax payable on the taxable income and for timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

L. Impairment of Assets:

The company determines any indication of impairment in carrying value of assets and the impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

M. PROVISIONS AND CONTINGENT LIABILITIES/ASSETS:

Contingent liabilities are not recognized in Accounts but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in financial statements. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation and it is probable that there will be out flow of resources.


Mar 31, 2014

A. Basis of Preparation and Presentation of Financial Statements:

The financial statements are prepared under the historical cost convention as a going concern and in accordance with Accounting principles generally accepted in India and comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and relevant provisions of The Companies Act, 1956. The Company follows the mercantile method of accounting.

B. Inventories:

Inventories of Finished goods and process stocks are valued at lower of cost or net realizable market value. Inventories of Raw materials and Stores & Spares are valued at waited average cost. Scrap and disposables are valued at net realizable value. Cost of Inventories consist of purchase price including duties and taxes ( other than CENVAT credit and input tax credit recoverable under A.P. VAT Act), cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Value of finished goods includes central excise duty as cost of production in accordance with Accounting Standard (AS-2).

C. Depreciation:

Depreciation is provided on straight line method in respect of some plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method. Depreciation has been calculated at the rates specified in Schedule XIV to the Companies Act, 1956.

D. Retirement Benefits to Employees:

Gratuity /superannuation and leave encashment benefits payable on retirement / resignation of employees provided on retirement/ payment.

E. Revenue Recognition:

(i) Sales revenue is recognized on supply of goods. Gross Turnover includes VAT, Excise Duty and Education Cess in respect of goods sold. Income and Expenditure are recognized on accrual basis except for transactions below Rs.10,000/- per transaction and are accounted in the year of payment / receipt.

(ii) Dividend on investments is recognized when the right to receive is established.

(iii) Interest on delay payments to creditors / by debtors accounted on the basis of debit notes/ credit notes raised / received from the parties.

(iv) Insurance claims are accounted on the basis of claims lodged.

(v) Interest/Hire Charges on Hire Purchase Loans taken into account on due and payable basis.

F. Investments:

Long term investments are stated at cost of acquisition and if there is permanent diminution in the value of investments, the same is considered for valuation of investments. Current investments are valued at lower of cost or fair market value.

G. Fixed Assets and Capital works-in-progress:

Fixed Assets are stated at cost (net of CENVAT credit and including related financial costs till commencement of commercial production) less accumulated depreciation. Capital work-in progress includes indirect cost and pre-operative expenses related or attributable to the capital works and trial run expenses incurred up to commencement of commercial production are added to the cost of fixed assets. Advance paid towards the acquisition of Fixed Assets outstanding at the Balance Sheet Date are disclosed as "Capital Advances "under long term loans and advances as per revised Schedule VI to the Companies Act, 1956.

H. Borrowing Costs:

Interest and other costs incurred in connection with the borrowing of funds that are directly attributable to the acquisition, construction or erection of a qualifying asset, are capitalised as cost of such asset and the other borrowing costs are expensed in the year in which incurred.

I. Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

J. Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

K. Accounting for taxes on income:

Current tax and deferred tax liability, if any, for the year is recognized for tax payable on the taxable income and for timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

L. Impairment of Assets:

The company determines any indication of impairment in carrying value of assets and the impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

M. PROVISIONS AND CONTINGENT LIABILITIES/ASSETS:

Contingent liabilities are not recognized in Accounts but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in financial statements. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation and it is probable that there will be out flow of resources.


Mar 31, 2013

A. Basis of Preparation and Presentation of Financial Statements:

The financial statements are prepared under the historical cost convention as a going concern and in accordance with Accounting principles generally accepted in India and comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and relevant provisions of The Companies Act, 1956. The Company follows the mercantile method of accounting.

B. Inventories:

Inventories of Finished goods and process stocks are valued at lower of cost or net realizable market value. Inventories of Raw materials and Stores & Spares are valued at waited average cost. Scrap and disposables are valued at net realisable value. Cost of Inventories consist of purchase price including duties and taxes ( other than CENVAT credit and input tax credit recoverable under A.P. VAT Act), cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Value of finished goods includes central excise duty as cost of production in accordance with Accounting Standard (AS-2).

C. Depreciation:

Depreciation is provided on straight line method in respect of some plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method. Depreciation has been calculated at the rates specified in Schedule XIV to the Companies Act, 1956.

D. Retirement Benefits to Employees:

Gratuity /superannuation and leave encashment benefits payable on retirement / resignation of employees provided on retirement/ payment.

E. Revenue Recognition:

(i) Sales revenue is recognised on supply of goods. Gross Turnover includes VAT, Excise Duty and Education Cess in respect of goods sold. Income and Expenditure are recognised on accrual basis except for transactions below Rs. 10,000/- per transaction and are accounted in the year of payment / receipt.

(ii) Dividend on investments is recognised when the right to receive is established.

(iii) Interest on delay payments to creditors / by debtors accounted on the basis of debit notes / Credit notes raised / received from the parties.

(iv) Insurance claims are accounted on the basis of claims lodged.

(v) Interest/Hire Charges on Hire Purchase Loans taken into account on due and payable basis.

F. Investments:

Long term investments are stated at cost of acquisition and if there is permanent diminution in the value of investments, the same is considered for valuation of investments. Current investments are valued at lower of cost or fair market value.

G. Fixed Assets and Capital works-in-progress:

Fixed Assets are stated at cost (net of CENVAT credit and including related financial costs till commencement of commercial production) less accumulated depreciation. Capital work-in progress includes indirect cost and pre-operative expenses related or attributable to the capital works and trial run expenses incurred up to commencement of commercial production are added to the cost of fixed assets. Advance paid towards the acquisition of Fixed Assets outstanding at the Balance Sheet Date are disclosed as "Capital Advances " under long term loans and advances as per revised Schedule VI to the Companies Act, 1956.

H. Borrowing Costs:

Interest and other costs incurred in connection with the borrowing of funds that are directly attributable to the acquisition, construction or erection of a qualifying asset, are capitalised as cost of such asset and the other borrowing costs are expensed in the year in which incurred.

I. Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

J. Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

K. Accounting for taxes on income:

Current tax and deferred tax liability, if any, for the year is recognized for tax payable on the taxable income and for timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

L. Impairment of Assets:

The company determines any indication of impairment in carrying value of assets and the impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

M. PROVISIONS AND CONTINGENT LIABILITIES/ASSETS:

Contingent liabilities are not recognized in Accounts but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in financial statements. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation and it is probable that there will be out flow of resources.


Mar 31, 2012

A. Basis of Preparation and Presentation of Financial Statements:

The financial statements are prepared under the historical cost convention as a going concern and in accordance with Accounting principles generally accepted in India and comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and relevant provisions of The Companies Act, 1956. The Company follows the mercantile method of accounting.

B. Inventories:

Inventories of Finished goods and process stocks are valued at lower of cost or net realizable market value. Inventories of Raw materials and Stores & Spares are valued at waited average cost. Scrap and disposables are valued at net realisable value. Cost of Inventories consist of purchase price including duties and taxes ( other than CENVAT credit and input tax credit recoverable under A.P. VAT Act), cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Value of finished goods includes central excise duty as cost of production in accordance with Accounting Standard (AS-2).

C. Depreciation:

Depreciation is provided on straight line method in respect of some plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method. Depreciation has been calculated at the rates specified in Schedule XIV to the Companies Act, 1956.

D. Retirement Benefits to Employees:

Gratuity /superannuation and leave encashment benefits payable on retirement / resignation of employees provided on retirement/ payment.

E. Revenue Recognition:

(i) Sales revenue is recognised on supply of goods. Gross Turnover includes VAT, Excise Duty and Education Cess in respect of goods sold. Income and Expenditure are recognised on accrual basis except for transactions below Rs. 10,000/- per transaction and are accounted in the year of payment / receipt.

(ii) Dividend on investments is recognised when the right to receive is established.

(iii) Interest on delay payments to creditors / by debtors accounted on the basis of debit notes Credit notes raised / received from the parties.

(iv) Insurance claims are accounted on the basis of claims lodged.

(v) Interest/Hire Charges on Hire Purchase Loans taken into account on due and payable basis.

F. Investments:

Long term investments are stated at cost of acquisition and if there is permanent diminution in the value of investments, the same is considered for valuation of investments. Current investments are valued at lower of cost or fair market value.

G Fixed Assets and Capital works-in-progress:

Fixed Assets are stated at cost (net of CENVAT credit and including related financial costs till commencement of commercial production) less accumulated depreciation. Capital work-in-progress includes indirect cost & pre-operative expenses related or attributable to the capital works and trial run expenses incurred up to commencement of commercial production are added to the cost of fixed assets. Advance paid towards the acquisition of Fixed Assets outstanding at the Balance Sheet Date are disclosed as "Capital Advances" under long term loans and advances as per revised Schedule VI to the Companies Act, 1956.

H. Borrowing Costs :

Interest and other costs incurred in connection with the borrowing of funds that are directly attributable to the acquisition, construction or erection of a qualifying asset, are capitalised as cost of such asset and the other borrowing costs are expensed in the year in which incurred.

I. Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

J. Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

K. Accounting for taxes on income:

Current tax and deferred tax liability, if any, for the year is recognized for tax payable on the taxable income and for timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

L. Impairment of Assets:

The company determines any indication of impairment in carrying value of assets and the impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

M. PROVISIONS AND CONTINGENT LIABILITIES/ASSETS:

Contingent liabilities are not recognized in Accounts but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in financial statements. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation and it is probable that there will be out flow of resources.


Mar 31, 2011

1.01) Depreciation:

Depreciation is provided on straight line method in respect of some plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method. Depreciation has been calculated at the rates specified in Schedule XIV to the Companies Act, 1956 as modified by the Department of Company Affairs vide Notification No.GSR 756(E) dated 16th December, 2003.

1.02) Valuation of Inventories:

i) Raw materials, stores and spares valued at weighted average cost.

ii) Process stock and finished goods valued at cost or market price whichever is lower.

iii) Waste and scrap valued at realizable value.

1.03) Gratuity and Superannuation:

Gratuity /superannuation provided on retirement of employees.

1.04) Insurance Claims:

Insurance claims are taken on the basis of claims lodged/accepted.

1.05) Investments:

Investments are valued at cost.

1.06) Fixed Assets and Capital works-in-progress:

Fixed Assets are stated at cost (Net of CENVAT credit) and including related financial costs till commencement of commercial production less accumulated depreciation. Capital work-in progress includes advances paid for capital items/works. Indirect and pre-operative expenses related or attributable to the capital works and trial run expenses incurred upto commencement of commercial production are added to the cost of fixed assets in the year of commencement of commercial production.

1.07) Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

1.08) Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

1.09) Accounting for taxes on income:

a) Current tax and deferred tax liability, if any, for the year is recognized for the estimated tax payable on the taxable income and timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

b) Deferred tax liability as on 31.03.2011, if any, is recognized for all timing differences arising on account of difference in methods/rates of depreciation and deferred tax asset is considered in respect of deferred revenue expenditure and expenditure allowable under section 43B and carry forward losses/allowances on the principle of prudence.


Mar 31, 2010

1.01) Depreciation:

Depreciation is provided on straight line method in respect of some plant and machinery situated at Cement Division and all other assets have been depreciated on Written down Value method. Depreciation has been calculated at the rates specified in Schedule XIV to the Companies Act, 1956 as modified by the Department of Company Affairs vide Notification No.GSR 756(E) dated 16th December, 2003.

1.02) Valuation of Inventories:

i) Raw materials, stores and spares valued at weighted average cost.

ii) Process stock and finished goods valued at cost or market price whichever is lower.

iii) Waste and scrap valued at realizable value.

1.03) Gratuity and Superannuation:

Gratuity/superannuation provided on retirement of employees.

1.04) Insurance Claims:

Insurance claims are taken on the basis of claims lodged/accepted.

1.05) Investments:

Investments are valued at cost.

1.06) Fixed Assets and Capital works-in-progress:

Fixed Assets are stated at cost (Net of CENVAT credit) and including related financial costs till commencement of commercial production less accumulated depreciation. Capital work-in-progress includes advances paid for capital items/works. Indirect and pre-operative expenses related or attributable to the capital works and trial run expenses incurred upto commencement of commercial production are added to the cost of fixed assets in the year of commencement of commercial production.

1.07) Deferred Revenue Expenditure:

The compensation to employees under Voluntary Retirement Scheme at Cement Division, the benefits of which are expected to accrue in future years has been treated as deferred revenue expenditure and amortized over a period of five years.

1.08) Segment Reporting:

The business activity and geographical operations of the company is in one segment of cement product and segment reporting is not applicable.

1.09) Lease:

Lease payments in respect of operational leases are recognized as an expenditure on due and payable basis as per the lease agreements and the future lease payments under non cancelable operational leases for each period are disclosed in notes to accounts.

1.10) Accounting for taxes on income:

a). Current tax and deferred tax liability, if any, for the year is recognized for the estimated tax payable on the taxable income and timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

b) Deferred tax liability as on 31.03.2010, if any, is recognized for all timing differences arising on account of difference in methods/rates of depreciation and deferred tax asset is considered in respect of deferred revenue expenditure and expenditure allowable under section 43B and carry forward losses/allowances on the principle of prudence.

 
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