2010-11 - Grasim

UltraTec
ech Cement Limited
SCHEDULE 21 (Contd.)
(iv) Other Long
Term Benefits
Long-term compensated absences are provided for on the basis of an actuarial valuation,
using the projected unit credit method, at the end of each financial year. Actuarial gains/
losses, if any, are recognised immediately in the Profit and Loss Account.
12.
Bor
orro
rowing Costs:
Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are
capitalised as part of the cost of such asset till such time the asset is ready for its intended use.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for
its intended use. All other borrowing costs are recognised as an expense in the period in which
they are incurred.
The difference between the face value and the issue price of ‘Discounted Value Non-Convertible
Debentures’, being in the nature of interest, is charged to the profit and loss account, on a
compound interest basis determined with reference to the yield inherent in the discount.
13.
3. Taxation:
Current Tax is measured on the basis of estimated taxable income for the current accounting
period and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
Deferred Tax resulting from “timing differences” between book and taxable profit for the year is
accounted for using the tax rates and laws that have been enacted or substantively enacted as on
the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent
that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation
which are recognised based on virtual certainty, that the assets will be realised in future.
14.
4. Revenue enue Recognition:
(i)
(ii)
Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the
goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but
includes excise duty.
Income from services is recognised as they are rendered, based on agreement/arrangement
with the concerned parties.
(iii) Dividend income on investments is accounted for when the right to receive the payment is
established. Interest income is recognised on accrual basis.
(iv) Export Incentives, insurance, railway and other claims, where quantum of accruals cannot be
ascertained with reasonable certainty, are accounted on acceptance basis.
15.
5. Mines Restoration Expenditure:
The Company provides for the estimated expenditure required to restore quarries and mines. The
total estimate of restoration expenses is apportioned over the estimate of mineral reserves and a
provision is made based on minerals extracted during the year.
The total estimate of restoration expenses is reviewed periodically, on the basis of technical
estimates.
16.
Pro
rovisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when there is a present obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation, in respect of which
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