Accounting Policies of P R Cements Ltd. Company

Jun 30, 2011

1. Accounting Conventions:

The financial statements have been prepared under the historical cost conventions with the generally accepted accounting principles in India including the Accounting standards notified by the Government of India and issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of the Companies Act, 1956 as adopted consistently by the Company. All income and expenditure having material bearing on the financial statements are recognized on accrual basis.

2. Fixed Assets:

Fixed assets are stated at cost of acquisition as reduced by accumulated depreciation. All costs including financial costs up to the date of commissioning and attributable to the fixed assets are capitalized apart from taxes, freight and other incidental expenses related to the acquisition and installation of the respective fixed assets and excludes duties and taxes to the extent recoverable from tax authorities.

3. Depreciation:

Depreciation of fixed assets has been provided on straight line method as per the rates prescribed under schedule XIV of the Companies Act, 1956.

4. Revenue Recognition:

Revenue from sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer. This coincides with the passing of possession to the buyer.

5. Inventories:

Inventories have been valued as under:

i) Raw Materials, Stores and Spares and Packing Material have been valued at cost. Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable,

ii) Finished Goods and Work-in-progress have been valued at cost or net realizable value whichever is lower. Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition.

6. Employee Benefits:

i) Contributions made to Provident Fund are charged to Profit & Loss Account.

ii) Gratuity is provided as and when the liability arises.

7. Taxes on Income:-

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods.

8. General:

Accounting policies not specifically referred to are consistent with generally accepted accounting practices.