Year : 2010-11 - CCL

__________________________________________________ CENTRAL COALFIELDS LIMITED
SCHEDULE - P
SIGNIFICANT ACCOUNTING POLICY
1.0 BASIS FOR PREPARATION OF FINANCIAL STATEMENT
The financial statements are prepared under the historical cost convention on accrual basis, in
accordance with the requirements of the Companies Act, 1956 and in compliance with the
Accounting Standards referred to in Section 211(3C) except as otherwise stated elsewhere.
2.0 USE OF ESTIMATES:
The presentation of financial statements in conformity with the generally accepted Accounting
Principles required making estimate and assumption that affect the reported amount of Assets
and Liabilities on the date of financial statement and also the reported amount of revenues and
expenses during the reporting period. Difference between the actual amount and the estimates
are recognized in the period in which the results are known/ materialized.
3.0 REVENUES AND EXPENDITURES:
All Income and Expenditures having a material bearing on financial statements are recognized
on the accrual basis and provision is made for all known losses and liabilities except in the
following cases:
3.1 Liquidated damages, interest on delayed payment and escalation claims from customers are
recognized on the basis of final settlement.
3.2 Insurance/Railway claims are accounted for on admission/final settlement.
3.3 Scraps are accounted for on realization.
3.4 Refund/adjustment of tax from Tax Authorities are accounted for on cash basis. Additional demand
for income tax, Royalty, Cess , sales Tax, entry Tax etc. are accounted for after final order
except as otherwise not recognized under AS-29. In appeals, payment made against additional
demand are treated as Advance Claim.
3.5 Interest payable on account of income tax/ sales tax as demanded by tax authorities are accounted
for in the year of payment. Similarly, interest receivable, if any, are accounted for in the year of
receipt.
3.6 Demands/claims against the Company, which are not likely to materialize into actual liabilities,
are regarded as Contingent Liabilities.
4.0 REVENUE RECOGNITION:
4.1 Revenue in respect of Coal Sale is recognized when the property in the goods with the risks and
rewards of ownership are transferred to the buyer i.e. on the basis of D notes for dispatch by
Rail and weighment cards in respect of road dispatches.
4.2 Sales of coal are net of Royalty, SED, CST/JST/JVAT and accepted deductions made by
customers on account of quality of coal & shortage etc.
4.3 The revenue recognition is done where there is a reasonable certainty of collection. On the
other hand revenue recognition is postponed in case of uncertainty as assessed by management.
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