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Accounting Policies of Burnpur Cement Ltd. Company

Mar 31, 2016

SIGNIFICANT ACCOUNTING POLICIES

a. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

c. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

d. FIXED ASSETS

i. Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. up to the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

ii. Preoperative Expenses relating to Cement and Clinker unit in Jharkhand (Patratu) has been appropriately capitalized on commencement of production.

e. INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition, net of recoverable taxes.

f. DEPRECIATION & AMORTIZATION Tangible Assets

i. Depreciation on Fixed Asset is provided on straight line method, according to the useful life of the asset as prescribed in schedule II of the Companies Act, 2013.

Intangible Assets

ii Intangible Assets such as software, etc. are amortized based upon their estimated useful lives of 6 years.

g. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods, sales tax, service tax, excise duty, adjusted for discounts, VAT. Interest income is recognized on time proportion basis taking into account, the amount outstanding and rate applicable.

h. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/ refund of Excise Duty.

i. VALUATION OF INVENTORIES

i. Raw materials, packing materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on FIFO basis.

ii. Work-in-Progress and finished goods are valued at net realizable value. Net realizable value is the estimated selling price in the ordinary course of business.

j. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

k. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit & Loss Account.

l. INCOME TAX

Tax expenses comprises of Current and Deferred Tax. Provision for Current Income Tax is made in accordance with the Income Tax Act, 1961. Deferred tax is accounted for in accordance with Accounting Standard 22 on "Accounting For Taxes on Income", issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

m. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

n. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure. Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

o. PROVISIONS, CONTINGENT LIABILITIES

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obligations as a result of past event and the same is reviewed at each Balance Sheet date. Contingent Liabilities are not recognized but are disclosed in the notes.

p. IMPAIRMENT OF ASSETS

In compliance with AS-28 relating to impairment of assets, the company has reviewed the carrying amount of fixed assets as cash generating unit and there was no indication of impairment during the year.


Mar 31, 2015

A. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

c. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

d. FIXED ASSETS

i) Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/ commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

ii) Preliminary Expenses and Preoperative Expenses related to Jharkhand (Patratu) has been booked under the head Capital Work in Progress.

e. INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition, net of recoverable taxes.

f. DEPRECIATION & AMORTIZATION Tangible Assets

i. Depreciation on Fixed Asset is provided on straight line method, according to the useful life of the asset as prescribed in schedule II of the Companies Act, 2013.

Intangible Assets

ii Intangible Assets such as software, etc. are ammortised based upon their estimated useful lives of 6 years.

g. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods, sales tax, service tax, excise duty, adjusted for discounts, VAT. Interest income is recognized on time proportion basis taking into account, the amount outstanding and rate applicable.

h. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/refund of Excise Duty.

i. VALUATION OF INVENTORIES

i. Raw materials, packing materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on FIFO basis.

ii. Work-in-Progress and finished goods are valued at net realizable value. Net realizable value is the estimated selling price in the ordinary course of business.

j. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

k. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit & Loss Account.

l. INCOME TAX

Tax expenses comprises of Current, Deferred Tax and Fringe Benefit Tax. Provision for Current Income Tax is made in accordance with the Income Tax Act, 1961. Deferred tax is accounted for in accordance with Accounting Standard 22 on "Accounting For Taxes on Income", issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

m. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

n. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure.

Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

o. PROVISIONS, CONTINGENT LIABILITIES

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obligations as a result of past event and the same is reviewed at each Balance Sheets date. Contingent Liabilities are not recognized but are disclosed in the notes.

p. IMPAIREMENT OF ASSETS

In compliance with AS-28 relating to impairment of assets, the company has reviewed the carrying amount of fixed assets as cash generating unit and there was no indication of impairment during the year.


Mar 31, 2014

A. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

c. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

d. FIXED ASSETS

i) Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/ commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

ii) Preliminary expenses and pre operative expenses related to Jharkhand Project (Patratu) has been booked under the head Capital Work in Progress.

e. OPERATING LEASE

Rentals are expensed with reference to lease terms and other considerations.

f. INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition net of recoverable taxes.

g. DEPRECIATION & AMORTIZATION

i. Depreciation on Fixed Asset is provided on straight line method, at the rate and in the manner prescribed under schedule XIV of the Companies Act, 1956.

ii. Lease hold land is amortized over the period of the lease.

h. REVENUE RECOGNITION

Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods, sales tax, service tax, excise duty, adjusted for discounts, VAT. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

i. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/refund of Excise Duty.

j. VALUATION OF INVENTORIES

i. Raw materials, packing materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on FIFO basis. The method of valuation has been changed from weighted average basis in the earlier years to FIFO basis in the current year. The profit has increased by Rs. 2.25 Cr due to such change in method of valuation.

ii. Work-in-Progress and finished goods are valued at net realizable value. Net realizable value is the estimated selling price in the ordinary course of business.

k. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

l. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit & Loss Account.

m. INCOME TAX

Tax expenses comprises of Current, Deferred Tax and Fringe Benefit Tax. Provision for Current Income Tax is made in accor- dance with the Income Tax Act, 1961. Deferred tax is accounted for in accordance with Accounting Standard 22 on "Accounting For Taxes on Income", issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

n. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

o. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure.

Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

p. PROVISIONS, CONTIGENT LIABILITIES

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obliga- tions as a result of past event and the same is reviewed at each Balance Sheets date. Contingent liabilities are not recognised but are disclosed in the notes.

q. IMPAIREMENT OF ASSETS

In compliance with AS-28 relating to impairment of assets, the company has reviewed the carrying amount of fixed assets as cash generating unit and there was no indication of impairment during the year.


Mar 31, 2013

A. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recog- nized in the period in which the results are known / materialized.

c. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

d. FIXED ASSETS

i) Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/ commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

ii) Preliminary expenses and pre operative expenses related to Jharkhand Project (Patratu) has been booked under the head capital work in progress.

e. OPERATING LEASE

Rentals are expensed with reference to lease terms and other considerations.

f. INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition net of recoverable taxes.

g. DEPRECIATION & AMORTIZATION

i. Depreciation on Fixed Asset is provided on straight line method, at the rate and in the manner prescribed under schedule XIV of the Companies Act, 1956.

ii. Lease hold land is amortized over the period of the lease.

h. REVENUE RECOGNITION

Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, sales tax, service tax, excise duty, adjusted for discounts, VAT. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

i. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/refund of Excise Duty.

j. VALUATION OF INVENTORIES

i. Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis.

ii. Work-in-Progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and Labour and proportion of manufacturing overhead based on normal operating capacity. Cost is determined on a weighted average basis. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to make the sale.

iii. Packing materials are valued at cost price.

k. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

l. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit & Loss Account.

m. INCOME TAX

Tax expenses comprises of Current, Deferred Tax and Fringe Benefit Tax. Provision for Current Income Tax is made in accor- dance with the Income Tax Act, 1961. Deferred tax is accounted for in accordance with Accounting Standard 22 on "Accounting For Taxes on Income" issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

n. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

o. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure.

Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

p. PROVISIONS, CONTIGENT LIABILITIES

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obliga- tions as a result of past event and the same is reviewed at each Balance Sheets date. Contingent liabilities are not recognised but are disclosed in the notes.

n. IMPAIREMENT OF ASSETS

In compliance with AS-28 relating to impairment of assets, the company has reviewed the carrying amount of fixed assets as cash generating unit and there was no indication of impairment during the year.

As per our annexed report of even date.


Mar 31, 2012

A. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

c. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

d. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

e. DEPRECIATION & AMORTIZATION

i. Depreciation on Fixed Asset is provided on straight line method, at the rate and in the manner prescribed under schedule XIV of the Companies Act, 1956.

ii. Lease hold land is amortized over the period of the lease.

f. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/refund of Excise Duty.

g. VALUATION OF INVENTORIES

i. Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis.

ii. Work-in-Progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and Labour and proportion of manufacturing overhead based on normal operating capacity. Cost is determined on a weighted average basis. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to make the sale.

iii. Packing materials are valued at cost price.

h. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

i. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit & Loss Account.

j. INCOME TAX

Tax expenses comprises of Current, Deferred Tax and Fringe Benefit Tax. Provision for Current Income Tax is made in accordance with the Income Tax Act, 1961. Deferred tax is accounted for in accordance with Accounting Standard 22 on “Accounting For Taxes on Income”, issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

k. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

l. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure.

Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

m. PROVISIONS

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obligations as a result of past event and the same is reviewed at each Balance Sheets date.

n. IMPAIREMENT OF ASSETS

In compliance with AS-28 relating to impairment of assets, the company has reviewed the carrying amount of fixed assets as cash generating unit and there was no indication of impairment during the year.

As per our annexed report of even date.


Mar 31, 2010

A. NATURE OF OPERATION

The Company is engaged in the business of manufacturing of Cement and developers of residential cum commercial complex.

b. BASIS OF ACCOUNTING

The financial statement have been prepared under the historical cost convention and on accrual basis in accordance with the accounting principles generally accepted in India and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

c. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the period. Differences between actual results and estimates are recognized in the period in which the results are known/materialize.

d. REVENUE RECONGNITION

i. Sales are recognized on transfer of title of the goods to the customers.

ii. Sale is inclusive of VAT, CST and Excise Duty.

iii. Revenue in respect of income from Construction and sale of residential and commercial units, developed by M/s. BCL

Developers, which is a unit of Burnpur Cement Ltd., has been accounted for by applying percentage completion method in accordance with the Guidelines of Accounting Standard issued by the ICAI.

e. ACCOUNTING OF CLAIMS

i. Claims receivable are accounted at the time when reasonable certainty of receipt is established. Claims payable are accounted at the time of acceptance.

ii. Claims raised by Government Authorities regarding taxes and duties, which are disputed by the company, are accounted based on the merits of each claim.

f. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer is considered in the accounts and the differential amount is transferred to revaluation reserves.

g. DEPRECIATION

i. Depreciation on Fixed Asset is provided on straight line method, at the rate and in the manner prescribed under schedule XIV of the Companies Act, 1956.

ii. Lease hold land is amortized over the period of the lease.

iii. Fixed assets costing below Rs.5000/- are fully depreciated in the year of acquisition.

h. IMPAIRMENT OF ASSETS

i. the carrying amount of assets are reviewed at each balance sheet date to ascertain if there is any indication of impairment based on internal/external factors. An impairment loss is recognized where ever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use , the estimated future cash flow are discounted to their present value at the weighted average

ii. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

iii. A previously recognized impairment loss is increased or reversed depending on the changes in circumstances. However the carrying value after reversal is not inceased beyond the carrying value that would be prevailed by charging usual depreciation if there is no impairment.

i. EXCISE DUTIES

The figures of excise duty paid are disclosed in the Books at the net figures after taking Credit for rebate/refund of Excise Duty.

j. EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average no. of equity shares outstanding during the period.

For the purpose of calculating the diluted Earning Per Share, the net profit or loss for the period attributable to equity shareholders and the weighted no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

k. CASH FLOW STATEMENT

Cash flows are reported using the Indirect Method, whereby profit before tax is adjusted for effect of transaction of a non-cash nature and any deferrel or accrual of past or future cash receipt or payment. The cash flow from regular revenue generating, financing and investing activities of the company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheque in hand and short term investment with an original maturity of three months

l. VALUATION OF INVENTORIES

i. Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis. ii. Work-in-Progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and Labour and proportion of manufacturing overhead based on normal operating capacity. Cost is determined on a weighted average basis. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and to make the sale. iii. Packing materials are valued at cost price.

m. INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investment. Unquoted and long term investments are considered at cost. Current quoted investments are stated at lower of cost or market rate on individual investment basis.

n. BORROWING COST

Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of cost of such assets, up to the date when such assets are ready to their intended use. Other borrowing costs are charge to Profit & Loss Account.

o. INCOME TAX

Tax expenses comprises of Current, Deferred Tax and Fringe Benefit Tax. Provision for Current Income Tax is made in accordance with the Income Tax Act, 1961. Deferred tax are accounted for in accordance with accounting standard 22 on "Accounting For Taxes on Income", issued by ICAI. Deferred Income taxes reflect the impact of the current period timing difference between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty sufficient future taxable income will be available except that deferred tax asset arising on account of unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

p. EMPLOYEE BENEFITS

i. PF contribution, ESI contribution and other statutory contribution as applicable to the company are charged to the profit and loss account when the contributions to the respective fund are due.

ii. Gratuity liability is provided for on the basis of an actuarial valuation made at the end of each financial year from approved actuary.

q. GRANTS & SUBSIDY

Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure. Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities.

r. PROVISIONS

Provisions are recognized where a reliable estimate can be made for probable outflow of resources to settle the present obligations as a result of past event and the same is reviewed at each Balance Sheets date.

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