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Accounting Policies of Udaipur Cement Works Ltd. Company

Mar 31, 2015

1.1 The financial statements are prepared in accordance with the Indian General Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 2013. Accounting Policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2 Fixed Assets are stated at cost of acquisition / purchase subject to impairment.

1.3 Expenditure during construction / erection period is included under Capital Work- in-Progress and is allocated to the respective fixed assets on completion of construction / erection.

1.4 Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss. Premium in respect of forward contracts is recognized over the life of the contract.

1.5 Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed categorywise.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap / waste which is valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other costs incurred in bringing the Inventories to their present location and condition.

1.7 Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Investment Subsidy is considered as Other Operating Revenue.

1.8 Revenue expenditure on research and development is charged to Statement of profit and loss and capital expenditure is added to the fixed assets.

1.9 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets.

1.10 (i) Depreciation on Buildings, Plant & Machinery and Railway Siding is provided as per Straight Line Method (SLM), at the rates and in the manner specified in Schedule II to the Companies Act, 2013. Depreciation on Furniture & Fixtures, Office Equipments, Vehicles and Locomotives is provided on Written Down Value (WDV) method as per the said Schedule. The useful lives of Continuous Process Plants as defined in Schedule II, have been considered based on technical evaluation and depreciation is provided accordingly. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold land is being amortised over the lease period.

1.11 The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. The impairment loss recognized in prior accounting period is reversed, if there has been improvement in recoverable amount in subsequent years.

1.12 Intangible Assets are being recognized if the future economic benefits attributable to the Assets are expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14 Employee Benefits:

(i) Defined Contribution Plan

Contributions to the Employees' Regional Provident Fund (PF), Employees' State Insurance (ESI), Superannuation Fund, and Pension Fund are recognized as defined contribution plan and charged as expenses in the year in which the employees rendered the services.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit plan and are determined on the basis of actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gains / losses, if any, are immediately recognized in the Statement of Profit and Loss.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15 Provisions in respect of present obligation arising out of past events are made in accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities are not recognized but are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial statements.


Mar 31, 2014

1.1 The financial statements have been prepared under historical cost convention on accrual basis in compliance with applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and relevant provisions of the Companies Act, 1956, read with General Circular No.15/2013 dated 13th September 2013, issued by Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. Accounting Policies are consistent with the Generally Accepted Accounting Principles.

1.2 Fixed Assets are stated at cost of acquisition / purchase subject to impairment.

1.3 Expenditure during construction / erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction / erection.

1.4 Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss. Premium in respect of forward contracts is recognized over the life of the contract.

1.5 Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed category wise.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap / waste which is valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other charges incurred in bringing the Inventories to their present location and condition.

1.7 Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Project subsidy is credited to Capital Reserve.

1.8 Revenue expenditure on research and development is charged to Statement of profit and loss and capital expenditure is added to the fixed assets.

1.9 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets.

1.10 (i) Depreciation on Buildings, Plant & Machinery and Railway Siding is provided as per

straight line method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 as amended. Depreciation on Furniture & Fixtures, Office Equipments, Vehicles and Locomotives is provided on written down value method as per the said Schedule. Continuous Process Plants as defined in Schedule XIV have been considered on technical evaluation. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold land is being amortised over the lease period.

1.11 The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. Previously recognised impairment loss is further provided or reversed depending on change in its estimated recoverable amount in subsequent years.

1.12 Intangible Assets are being recognized if the future economic benefits attributable to the Assets expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14 Employee Benefits:

(i) Defined Contribution Plan

Employees benefits in the form of Superannuation Fund and Provident Fund (PF) considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligationsand are provided for on the basis of an actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gain / losses, if any, are immediately recognized in the Statement of Profit and Loss.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15 Provisions in respect of present obligation arising out of past events are made in accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements.

d. Terms / right attached to Equity Shareholders :

1. The Company has only one class of equity shares having a par value of Rs. 4 per share. Each holder of equity shares is entitled to one vote per share.

2. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company , after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

e. During the period, the Company has reclassified its Authorised Share Capital pursuant to BIFR Sanctioned Rehabilitation Scheme. Accordingly, authorised Share Capital of Rs. 12,500 lacs stands reclassified i.e. 29,75,00,000 Equity Shares of Rs. 4 each & 60,00,000 Preference Shares of Rs. 10 each.

f. During the period, the Company has allotted Equity Shares of Rs. 7,800 lacs on preferential basis against Cash to the Holding Company.

g. The Company has initiated the process of seeking requisite steps/approval for enhancement of Authorised Share Capital from Rs. 12,500 lacs to Rs. 20,000 lacs. The amount contributed by the holding Company has been shown as advance against shares (Refer note 4), which will be converted into share capital in due course.

h. The Zero Coupon Redeemable Preference Shares (ZCPS) aggregating to Rs. 509.52 lacs are redeemable on 31st March 2017 i.e. at the end of 7 years from the cut off date as per the Scheme.


Sep 30, 2012

1.1 The financial statements are prepared on going concern basis and the accounts are maintained on accrual basis except the claims/refunds/fuel surcharges not ascertainable with reasonable certainty are accounted for on settlement /receipt basis.

1.2 Fixed Assets are stated at cost of acquisition/ purchase subject to impairment.

1.3 Expenditure during construction/erection period is allocated to the respective fixed assets on completion of construction/erection. Interest on borrowings as allocated by the Management for new/expansion project is capitalised/included in Capital Work in Progress.

1.4 Assets and liabilities related to foreign currency transactions are translated at exchange rate prevailing at the end of the period or at contracted rate. Exchange differences in respect of fixed assets are adjusted to the carrying cost of fixed assets and in respect of other are charged to Statement of Profit & Loss.

1.5 Long Term investments are stated at cost.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap/waste which is valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other charges incurred in bringing the Inventories to their present location and condition.

1.7 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets. ''

1.8 Revenue expenditure on research and development is charged to Statement of profit and loss and capital expenditure is added to the fixed assets.

1.9 (a) Depreciation on Fixed Assets is provided as per straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plants as defined in Schedule XIV have been considered on technical evaluation.

(b) Leasehold land is being amortised over the lease period.

1.10 Provision for taxation is made based on the current tax rates in force. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and may be reversed in one or more subsequent periods. Deferred tax assets arising on account of brought forward losses, unabsorbed depreciation and other temporary timing differences are recognised only if there is virtual certainty of realisation.

1.11 Miscellaneous expenditure are amortised as follows:

(i) Preliminary expenses charged to Revenue Account over a period often years.

(ii) Expensed on issue of shares/debentures over ten years and such amortisation are adjusted against Share Premium Account.

1.12 Retirement benefits are accounted on accrual basis.


Mar 31, 2011

1. The financial statements are prepared on going concern basis and the accounts are maintained on accrual basis except the claims / refunds / fuel surcharges not ascertainable with reasonable certainty are accounted for on settlement / receipt basis.

2. Fixed Assets are stated at cost of acquisition/purchase.

3. Expenditure during construction/erection period is allocated to the respective fixed assets on completion of construction/ erection. Interest on borrowings as allocated by the Management for new/ expansion project is capitalised/included in Capital Work in Progress.

4. Assets and liabilities related to foreign currency transactions are translated at exchange rate prevailing at the end of the period or at contracted rate. Exchange difference in respect of fixed assets are adjusted to the carrying cost of fixed assets and in respect of other is charged to Profits Loss Account.

5. Long Term investments are stated at cost.

6. Inventories (except scrap/waste which is valued at net realisable value) are valued at lower of cost and net realisable value. The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other charges incurred in bringing the Inventories to their present location and condition.

7. Borrowing cost is charged to Profit and Loss Account except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets.

8. Revenue expenditure on research and development is charged to profit and loss account and capital expenditure is added to the fixed assets.

9. (a) Depreciation on Fixed Assets upto 31st December 2008 is provided as per straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plants as defined in Schedule XIV have been considered on technical evaluation. No depreciation is provided w.e.f. 01.01.2009 onwards the plant & machinery remain unutilized.

(b) Leasehold land is being amortised over the lease period.

10. Provision for taxation is made based on the current tax rates in force. 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 may be reversed in one or more subsequent periods. Deferred tax assets arising on account of brought forward losses, unabsorbed depreciation and other temporary timing differences are recognised only if there is virtual certainty of realisation.

11. Miscellaneous expenditure are amortised as follows : (Expenses incurred upto 30.09.2003)

(i) Preliminary expenses charged to Revenue Account over a period often years.

(ii) Expenses on issue of shares/debentures over ten years and such amortisation is adjusted against Share Premium Account.

(iii) Expenditure incurred upto 30.09.2003 against which benefit was expected to flow into future periods, had been treated as Deferred Revenue Expenditure and charged to Revenue Account over the expected duration of benefit.

12. Retirement benefits are accounted on accrual basis.


Mar 31, 2010

1. The financial statements are prepared on going concern basis and the accounts are maintained on accrual basis except the claims / refunds / fuel surcharges not ascertainable with reasonable certainty are accounted for on settlement / receipt basis.

2. Fixed Assets are stated at cost of acquisition/purchase.

3. Expenditure during construction/erection period is allocated to the respective fixed assets on completion of construction/ erection. Interest on borrowings as allocated by the Management for new/ expansion project is capitalised/included in Capital Work in Progress.

4. Assets and liabilities related to foreign currency transactions are translated at exchange rate prevailing at the end of the period or at contracted rate. Exchange difference in respect of fixed assets are adjusted to the carrying cost of fixed assets and in respect of other is charged to Profit & Loss Account.

5. Long Term investments are stated at cost.

6. Inventories (except scrap/waste which is valued at net realisable value) are valued at lower of cost and net realisable value. The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other charges incurred in bringing the Inventories to their present location and condition.

7. Borrowing cost is charged to Profit and Loss Account except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets.

8. Revenue expenditure on research and development is charged to profit and loss account and capital expenditure is added to the fixed assets.

9. (a) Depreciation on Fixed Assets upto 31st December 2008 is provided as per straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Continuous process plants as defined in Schedule XIV have been considered on technical evaluation. No depreciation is provided w.e.f. 01.01.2009 during the period the plant & machinery remain unutilized.

(b) Leasehold land is being amortised over the lease period.

10. Provision for taxation is made based on the current tax rates in force. 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 may be reversed in one or more subsequent periods. Deferred tax assets arising on account of brought forward losses, unabsorbed depreciation and other temporary timing differences are recognised only if there is virtual certainty of realisation.

11. Miscellaneous expenditure are amortised as follows : (Expenses incurred upto 30.09.2003)

(i) Preliminary expenses charged to Revenue Account over a period of ten years.

(ii) Expenses on issue of shares/debentures over ten years and such amortisation is adjusted against Share Premium Account.

(iii) Expenditure incurred upto 30.09.2003 against which benefit was expected to flow into future periods, had been treated as Deferred Revenue Expenditure and charged to Revenue Account over the expected duration of benefit.

12. Retirement benefits are accounted on accrual basis.

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