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Accounting Policies of India Cements Ltd. Company

Mar 31, 2016

1. Use of estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

2. Inventories

(a) Valuation of inventories of raw materials, packing materials, stores, spares, fuels is at weighted average cost.

(b) Work-in-Process & Semi-finished goods are valued at cost or net realisable value whichever is lower and do not include interest and other administrative overheads.

(c) Finished goods are valued at cost or net realisable value whichever is lower. The value of finished goods includes excise duty and does not include interest and other administrative overheads.

(d) Construction and Infrastructure Projects are valued at cost or net realisable value whichever is lower.

3. Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short term investment with an original maturity of three months or less.

4. Fixed Assets

Fixed Assets are valued and shown adopting the following basis:

(a) Fixed Assets and Capital Work-in-progress of all the cement manufacturing facilities were revalued and shown at revalued amounts as at 31st March 2004. All other Fixed assets acquired are shown at the cost of acquisition.

(b) Fixed assets acquired on the Hire Purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the life of the agreement.

(c) Expenditures and outlays of money on uncompleted projects of the capital nature are shown as capital work-in-progress until such time these projects are completed and commissioned. All costs including financing costs incurred on specific projects / acquisition of undertakings are charged to the concerned heads.

(d) (i) During the year the Company has charged depreciation based on useful life of the assets in accordance with Schedule II of Companies Act, 2013.

(ii) Depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account.

(e) Intangible Assets, which are expected to generate economic benefits are accounted at cost and amortised over the useful life on Straight Line Method.

5. (a) Foreign Currency Transactions

(i) Pursuant to the Companies (Accounting Standard) Amendment Rules, 2011 the Company has exercised the option of adjusting the cost of the depreciable capital assets arising on the exchange differences, in respect of accounting periods commencing from 1st April 2011, on long term foreign currency monetary items, which were hitherto recognized as income or expenses in the period in which they arise. As a result, such exchange difference so far as they relate to the acquisition of depreciable capital assets have been adjusted with the cost of such assets, to be depreciated over the balance useful life of the respective assets.

(ii) In respect of other long term foreign currency monetary items, such exchange differences is accumulated in foreign currency monetary items translation difference account and amortized over the balance period of such liability.

(b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Assets and liabilities, other than those and for the purposes as mentioned in 5(a) above, in Foreign currencies are translated at values prevailing as at the year end. Gains / Losses if any, arising there from are recognised in the Profit and Loss Account.

(c) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognised at the spot rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward exchange contracts are recognised in the Profit and Loss Account. The discount or premium is amortised over the tenure of the contract.

(d) Investments in Equity Capital of overseas Companies registered outside India are carried in the Balance Sheet at the rates at which transaction has been executed.

6 (a) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability if any and is net of rebates, discounts and incentives as ascertained by management as per market conditions.

(b) Revenue from Construction and Infrastructure projects under property development division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

7. Research and Development

Research and Development expenses not resulting in any tangible property / equipment are charged to revenue.

8. Borrowing Costs

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

9. Claims / Incomes arising from price escalation and/or any other item of compensation and which are indeterminate are accounted when there is certainty of income accrual.

10. Trade investments and investments in subsidiary & associate companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution in value is made wherever necessary in accordance with the Accounting Standard.

11. Employee Benefits

Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The Actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss Account. Unavailed leave balances are accounted based on respective employee''s earnings as at the balance sheet date on actuarial basis.

12. Fringe Benefits arising on options vested under Employees Stock Options Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Reserve Account. On allotment of shares, corresponding amount is transferred from Stock Option Reserve to Securities Premium Account.

13. Premium on Redemption of Debentures / Bonds.

Premium on redemption of Debentures / Bonds is accounted on redemption and set off against the Securities Premium Account.

14. Tax Expense

(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.

(b) Deferred Tax

Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.

15. Contingent liabilities / Assets

Contingent liabilities and contingent assets are not recognised in the books of accounts. Provisions are made for the reliably estimated amount of present obligation to pay for the past events.


Mar 31, 2014

1. Use of estimates

The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

2. Inventories

(a) Valuation of inventories of raw materials, packing materials, stores, spares, fuels is at weighted average cost.

(b) Work-in-Process & Semi-finished goods are valued at cost or net realisable value whichever is lower and do not include interest and other administrative overheads.

(c) Finished goods are valued at cost or net realisable value whichever is lower. The value of finished goods includes excise duty and does not include interest and other administrative overheads.

(d) Construction and Infrastructure Projects are valued at cost or net realisable value whichever is lower.

3. Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short-term investment with an original maturity of three months or less.

4. Fixed Assets

Fixed Assets are valued and shown adopting the following basis:

(a) Fixed assets and Capital Work-in-Progress of all the cement manufacturing facilities were revalued and shown at revalued amounts as at 31st March 2004. All other fixed assets acquired are shown at the cost of acquisition.

(b) Fixed assets acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the life of the agreement.

(c) Expenditures and outlays of money on uncompleted projects of a capital nature are shown as Capital Work-in-Progress until such time these projects are completed and commissioned. All costs including financing costs incurred on specific projects/ acquisition of undertakings are charged to the concerned heads.

(d) (i) The Company provides depreciation on written down value method for Motor Vehicles and for assets acquired prior to 1.4.1982 at Head Office and at Sankarnagar.

(ii) Software development costs are capitalised and depreciated along with computers on Straight Line method as per Section 205(2)(b) of the Companies Act, 1956.

(iii) Ships are depreciated on Straight Line method, over its estimated useful life.

(iv) Indian Premier League Franchisee Rights are capitalised and amortised over a period of ten years.

(v) For all other assets Straight Line method as per Section 205(2)(b) of the Companies Act, 1956 is adopted.

(vi) Depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account.

(vii) Fixed Assets are tested for impairment and impairment loss, if any, is recognised wherever the carrying amount of the asset / group of asset exceeds its estimated recoverable amount. Previously recognised impairment loss, if any, is reversed or further provided depending on changes in circumstances as above.

5. (a) Foreign Currency Transactions

(i) Pursuant to the Companies (Accounting Standards) Amendment Rules, 2011 the Company has exercised the option of adjusting the cost of the depreciable capital assets arising on the exchange differences, in respect of accounting periods commencing from 1st April 2011, on long-term foreign currency monetary items, which were hitherto recognized as income or expenses in the period in which they arise. As a result, such exchange difference so far as they relate to the acquisition of depreciable capital assets have been adjusted with the cost of such assets, to be depreciated over the balance useful life of the respective assets.

(ii) In respect of other long-term foreign currency monetary items, such exchange differences are accumulated in foreign currency monetary items translation difference account and amortized over the balance period of such liability.

(b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Assets and Liabilities, other than those and for the purposes as mentioned in 5(a) above, in Foreign currencies are translated at values prevailing as at the year end. Gains / Losses, if any, arising therefrom are recognised in the Profit and Loss Account.

(c) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognised at the spot rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward Exchange contracts are recognised in the Profit and Loss Account. The discount or premium is amortised over the tenure of the contract.

6. (a) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability and is net of rebates, discounts and incentives.

(b) Revenue from Construction and Infrastructure Projects under Infrastructure Division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

7. Research and Development

Research and Development expenses not resulting in any tangible property / equipment are charged to revenue.

8. Borrowing Costs

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

9. Claims / Incomes arising from price escalation and / or any other item of compensation and which are indeterminate are accounted on cash basis.

10. Trade investments, investments in subsidiaries and associate companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution in value is made wherever necessary in accordance with the Accounting Standard.

11. Employee Benefits

Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss Account. Unavailed leave balances are accounted based on respective employee''s earnings as at the Balance Sheet date.

12. Fringe Benefits arising on options vested under Employees Stock Option Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Outstanding Account. On allotment of shares, corresponding amount is transferred from Stock Options Outstanding Account to Securities Premium Account.

13. Premium on Redemption of Debentures / Bonds.

Premium on Redemption of Debentures / Bonds is accounted on redemption and set-off against the Securities Premium Account.

14. Tax Expense

(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.

(b) Deferred Tax

Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.

Terms / Rights / restrictions attached to shares:

The Company has only one class of Equity share. Each share has a paid up value of Rs.10/-. Every shareholder is entitled to one vote per share, except for the holders of Global Depository Receipts / Global Depository Shares, as given below:

During the year 1994-95, the Company allotted 58,57,987 equity shares of Rs.10/- each consequent to issue of equivalent number of Global Depository Receipts (GDRs). Holders of these GDRs have no voting rights with respect to the Deposited shares.

During the year 2005-06, the Company allotted 5,12,27,592 underlying equity shares of Rs.10/- each represented by 2,56,13,796 Global Depository Shares (GDSs) in the ratio of 2:1. Holders of these GDSs have no voting rights with respect to the Deposited shares.

During the previous year 2012-13, the Company had declared and distributed a dividend of Rs.2.00 per share.

Shares reserved for issue under Employees Stock Option Scheme:

During the year 2006-07, the Company announced Employees Stock Option Scheme, 2006 (ESOS 2006) to its employees, which came into force on 1st December 2006.There are no shares reserved for issue under options as at March 31,2014.

SECURITY CLAUSE

(b) Term Loans:

1. Items (b) (i) and (b) (ii) are secured by first equitable mortgage and charge on pari passu basis (with other Lenders / Debenture Trustees) on the immovable and movable assets (with exclusion of assets purchased under Asset Credit Scheme and certain other assets specifically excluded from the purview of the security), subject to prior charge created and / or to be created on the movable assets in favour of the Company''s bankers for working capital requirements. Further loan mentioned in (b) (i) carry an option for conversion into equity shares at par not exceeding 20% of the sanctioned loan / outstanding loan in the advent of certain events and subject to conditions.

2. Item (b) (iii) is secured by a joint first equitable mortgage / charge on the immovable and movable assets (excluding assets purchased under Asset Credit Scheme and certain other assets specifically excluded from the purview of the security) subject to prior charge on the movable assets in favour of the Company''s bankers for working capital requirements.

3. Item (b) (v) is initially secured by first charge on the land situated at Vallur Village, Tiruvallur District, belonging to a subsidiary company and to be secured by way of first exclusive mortgage / charge on certain specified cement plant / assets of the Company.

4. Item (b) (vi) is secured by a first pari passu charge (with other Lenders / Debenture Trustees) on the movable and immovable fixed assets of the Company save and except book debts and subject to prior charges created / to be created in favour of the Company''s bankers on its current assets for securing the borrowings for working capital requirements.

5. Items (b) (vii), (b) (viii) and (b) (xi) are secured by way of exclusive first charge on the immovable properties of the Company being the land and building situated at 142/1 (Old No.93), Santhome High Road, Chennai.

6. Item (b) (ix) is secured by way of first charge on the movable assets pertaining to ship / vessel MV Chennai Selvam and all the ten shares of vessel MV Chennai Selvam.

7. Item (b) (x) is secured by way of exclusive charge on the immovable properties of the Company being land and building situated at 142/1 (Old No.93), Santhome High Road, Chennai, by way of extension and further secured by the movable assets pertaining to ship / vessel MV Chennai Selvam and all the ten shares of vessel MV Chennai Selvam.

8. Items (b) (xii), (b) (xxii) and (b) (xxiii) are secured by way of hypothecation of movable fixed assets of the Company''s plant at Vishnupuram, Nalgonda District excluding the movable assets of thermal power plant and further secured by a first pari passu mortgage and charge on the immovable properties of the Company.

9. Item (b) (xiii) is secured by a pari passu charge on all the movable assets of the Company excluding the current assets and movable assets at Chennai and Parli grinding units and further secured by a joint first equitable mortgage / charge on the immovable properties excluding immovable properties of Chennai and Parli grinding units of the Company.

10. Item (b) (xiv) is secured by way of hypothecation of the movable fixed assets of the proposed thermal power plant of the Company at Vishnupuram, Nalgonda District, Andhra Pradesh.

11. Item (b) (xv) is secured by way of hypothecation of the movable fixed assets of the Company''s captive power plant at Vishnupuram and further secured by a joint first equitable mortgage and pari passu charge on the immovable properties of the Company.

12. Item (b) (xvi) is secured by way of hypothecation of all movable properties on pari passu basis subject to prior charge on the movable assets in favour of the Company''s bankers for working capital requirements and further secured by a joint first equitable mortgage and pari passu charge on the immovable properties of the Company.

13. Item (b) (xvii) is secured by exclusive charge on the land situated at Vallur Village, Tiruvallur District, belonging to a subsidiary company.

14. Item (b) (xviii) and (b) (xix) are secured by joint equitable mortgage on the land and building situated at No.9, Boat Club Road, III Avenue, R.A. Puram, Chennai.


Mar 31, 2013

1. Use of estimates

The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

2. Inventories

(a) Valuation of inventories of raw materials, packing materials, stores, spares and fuels are at weighted average cost.

(b) Work-in-Process & Semi-finished goods are valued at cost or net realisable value whichever is lower and do not include interest and other administrative overheads.

(c) Finished goods are valued at cost or net realisable value whichever is lower. The value of finished goods includes excise duty and does not include interest and other administrative overheads.

(d) Construction and Infrastructure Projects are valued at cost or net realisable value whichever is lower.

3. Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short-term investment with an original maturity of three months or less.

4. Fixed Assets

Fixed Assets are valued and shown adopting the following basis:

(a) Fixed assets and Capital Work-in-Progress of all the cement manufacturing facilities were revalued and shown at revalued amounts as at 31st March 2004. All other fixed assets acquired are shown at the cost of acquisition.

(b) Fixed assets acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the life of the agreement.

(c) Expenditures and outlays of money on uncompleted projects of a capital nature are shown as Capital Work-in-Progress until such time these projects are completed and commissioned. All costs including financing costs incurred on specific projects/ acquisition of undertakings are charged to the concerned heads.

(d) (i) The Company provides depreciation on written down value method for Motor Vehicles and for assets acquired prior to

1.4.1982 at Head Office and at Sankarnagar. (ii) Software development costs are capitalised and depreciated along with computers on Straight Line method as per

Section 205(2)(b) of the Companies Act, 1956. (iii) Ships are depreciated on Straight Line method, over its estimated useful life. (iv) Indian Premier League Franchisee Rights are capitalised and amortised over a period of ten years. (v) For all other assets Straight Line method as per Section 205(2)(b) of the Companies Act, 1956 is adopted. (vi) Depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account. (vii) Fixed Assets are tested for impairment and impairment loss, if any, is recognised wherever the carrying amount of the asset / group of asset exceeds its estimated recoverable amount. Previously recognised impairment loss, if any, is reversed or further provided depending on changes in circumstances as above.

5. (a) Foreign Currency Transactions

(i) Pursuant to the Companies (Accounting Standards) Amendment Rules, 2011 the Company has exercised the option of adjusting the cost of the depreciable capital assets arising on the exchange differences, in respect of accounting periods commencing from 1st April 2011, on long-term foreign currency monetary items, which were hitherto recognized as income or expenses in the period in which they arise. As a result, such exchange difference so far as they relate to the acquisition of depreciable capital assets have been adjusted with the cost of such assets, to be depreciated over the balance useful life of the respective assets.

(ii) In respect of other long-term foreign currency monetary items, such exchange differences are accumulated in foreign currency monetary items translation difference account and amortized over the balance period of such liability.

(b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Assets and Liabilities, other than those and for the purposes as mentioned in 5(a) above, in Foreign currencies are translated at values prevailing as at the year end. Gains / Losses, if any, arising therefrom are recognised in the Profit and Loss Account.

(c) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognised at the spot rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward Exchange contracts are recognised in the Profit and Loss Account. The discount or premium is amortised over the tenure of the contract.

6. (a) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability and is net of rebates, discounts and incentives.

(b) Revenue from Construction and Infrastructure Projects under Infrastructure Division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

7. Research and Development

Research and Development expenses not resulting in any tangible property / equipment are charged to revenue.

8. Borrowing Costs

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

9. Claims / Incomes arising from price escalation and / or any other item of compensation and which are indeterminate are accounted on cash basis.

10. Trade investments, investments in subsidiaries and associate companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution in value is made wherever necessary in accordance with the Accounting Standard.

11. Employee Benefits

Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss Account. Unavailed leave balances are accounted based on respective employee''s earnings as at the Balance Sheet date.

12. Fringe Benefits arising on options vested under Employees Stock Option Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Outstanding Account. On allotment of shares, corresponding amount is transferred from Stock Options Outstanding Account to Securities Premium Account.

13. Premium on Redemption of Debentures / Bonds

Premium on Redemption of Debentures / Bonds is accounted on redemption and set-off against the Securities Premium Account.

14. Tax Expense

(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.

(b) Deferred Tax

Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.


Mar 31, 2012

1. Use of estimates

The preparation of Financial Statements is in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

2. Inventories

(a) Valuation of inventories of raw materials, packing materials, stores, spares, fuels is at weighted average cost.

(b) Work-in-Process & Semi-finished goods are valued at cost or net realisable value whichever is lower and do not include interest and other administrative overheads.

(c) Finished goods are valued at cost or net realisable value whichever is lower. The value of finished goods includes excise duty and does not include interest and other administrative overheads.

(d) Real Estate Projects are valued at cost or net realisable value whichever is lower.

3. Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short-term investment with an original maturity of three months or less.

4. Fixed Assets

Fixed Assets are valued and shown adopting the following basis:

(a) Fixed assets and Capital Work-in-Progress of all the cement manufacturing facilities were revalued and shown at revalued amounts as at 31st March 2004. All other fixed assets acquired are shown at the cost of acquisition.

(b) Fixed assets acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the life of the agreement.

(c) Expenditures and outlays of money on uncompleted projects of a capital nature are shown as Capital Work-in-Progress until such time these projects are completed and commissioned. All costs including financing costs incurred on specific projects/ acquisition of undertakings are charged to the concerned heads.

(d) (i) The Company provides depreciation on written down value method for Motor Vehicles and for assets acquired prior to

1.4.1982 at Head Office and at Sankarnagar.

(ii) Software development costs are capitalised and depreciated alongwith computers on Straight Line method as per Section 205(2)(b) of the Companies Act, 1956.

(iii) Ships are depreciated on Straight Line method, over its estimated useful life.

(iv) Long-term Franchisee Rights are capitalised and amortised over a period of ten years.

(v) For all other assets Straight Line method as per Section 205(2)(b) of the Companies Act, 1956 is adopted.

(vi) Depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account.

(vii) Fixed Assets are tested for impairment and impairment loss, if any, is recognised wherever the carrying amount of the asset / group of asset exceeds its estimated recoverable amount. Previously recognised impairment loss, if any, is reversed or further provided depending on changes in circumstances as above.

5. (a) Foreign Currency Transactions

(i) Pursuant to the Companies (Accounting Standards) Amendment Rules, 2011 the company has exercised the option of adjusting the cost of the depreciable capital assets arising on the exchange differences, in respect of accounting periods commencing from 1st April 2011, on long-term foreign currency monetary items, which were hitherto recognized as income or expenses in the period in which they arise. As a result, such exchange difference so far as they relate to the acquisition of depreciable capital assets have been adjusted with the cost of such assets, to be depreciated over the balance useful life of the respective assets.

(ii) In respect of other long-term foreign currency monetary items, such exchange differences are accumulated in foreign currency monetary items translation difference account and amortized over the balance period of such liability.

(b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Assets and Liabilities, other than those and for the purposes as mentioned in 5(a) above, in Foreign currencies are translated at values prevailing as at the year end. Gains / Losses, if any, arising therefrom are recognised in the Profit and Loss Account.

(c) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognised at the spot rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward exchange contracts are recognised in the Profit and Loss Account. The discount or premium is amortised over the tenure of the contract.

6. (a) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability and is net of rebates, discounts and incentives.

(b) Revenue from construction projects under Real Estate and Property Development Division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

7. Research and Development

Research and Development expenses not resulting in any tangible property / equipment are charged to revenue.

8. Borrowing Costs

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

9. Claims / Incomes arising from price escalation and / or any other item of compensation and which are indeterminate are accounted on cash basis.

10. Trade investments and investments in subsidiary companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution in value is made wherever necessary in accordance with the Accounting Standard.

11. Employee Benefits

Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss Account. Unavailed leave balances are accounted based on respective employee's earnings as at the Balance Sheet date.

12. Fringe Benefits arising on options vested under Employees Stock Option Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Outstanding Account. On allotment of shares, corresponding amount is transferred from Stock Options Outstanding Account to Securities Premium Account.

13. Premium on Redemption of Debentures / Bonds

Premium on Redemption of Debentures / Bonds is accounted on redemption and set-off against the Securities Premium Account.

14. Tax Expense

(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.

(b) Deferred Tax

Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.


Mar 31, 2011

1. Basis of Preparation of Financial Statements

The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP), generally under the historical cost convention on accrual basis and exceptions to this basis, if any, are herein specifically mentioned. GAAP comprises of mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI), the provisions of the Indian Companies Act, 1956 and the Guidelines issued by ICAI and Securities and Exchange Board of India (SEBI). Accounting policies have been consistently adopted except where a change in existing GAAP requires a change in accounting policy hitherto in use.

2. Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

3. Inventories

(a) Valuation of inventories of raw materials, packing materials, stores, spares, fuels is at weighted average cost.

(b) Work in Process & Semi-finished goods are valued at cost or net realisable value whichever is lower. The value of WIP and Semi- finished goods does not include interest and other administrative overheads.

(c) Finished goods are valued at cost or net realisable value whichever is lower. The value of finished goods includes excise duty and does not include interest and other administrative overheads.

(d) Real Estate Projects are valued at cost or net realisable value whichever is lower.

4. Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short term investment with an original maturity of three months or less.

5. Fixed Assets

Fixed Assets are valued and shown adopting the following basis:

(a) Fixed assets and Capital work-in-progress of all the cement manufacturing facilities are revalued and shown at revalued amounts as at 31st March 2004. All other Fixed assets acquired are shown at the cost of acquisition.

(b) Fixed assets acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the tenure of the agreement.

(c) Expenditures and outlays of money on uncompleted projects of a capital nature are shown as capital works-in-progress until such time these projects are completed and commissioned. All costs including financing costs incurred on specific projects/acquisition of undertakings are charged to the concerned heads.

(d) (i) The company provides depreciation on written down value method for Motor Vehicles and for assets acquired prior to 1-4-1982 at Head Office and at Sankarnagar.

(ii) Software development costs are capitalised and depreciated along with computers on Straight Line method as per Section 205(2)(b) of the Companies Act, 1956.

(iii) Ships are depreciated on Straight Line method, over its estimated useful life.

(iv) Long term Franchisee Rights are capitalised and amortised over a period of ten years.

(v) For all other assets Straight Line method as per Section 205(2)(b) of the Companies Act, 1956 is adopted.

(vi) The depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account.

6 (a) Foreign Currency Transactions Where Foreign Currency loans have been availed to acquire fixed assets from outside India, the outstanding liability on these loans is stated at the exchange rate of the rupee as at the year end or at contracted rates with a corresponding adjustment to the carrying cost of the relevant assets. Depreciation is charged to accounts on the values so adjusted over the remaining life of the asset.

(b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Current Assets and all Liabilities (other than for acquiring fixed assets as mentioned in 6(a) above), in Foreign currencies are translated at values prevailing as at the year end. Gains/Losses, if any, arising therefrom are recognised in the Profit and Loss Account.

(c) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognised at the spot-rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward Exchange contracts are recognised in the Profit and Loss Account. The discount or premium is amortised over the life of the contract.

7. (a) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability and is net of rebates, discounts and incentives.

(b) Revenue from construction projects under Real Estate and Property Development Division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

8. Research and Development

Research and Development expenses not resulting in any tangible property/equipment are charged to revenue.

9. Borrowing Costs

Interest and other costs in connection with borrowing of funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

10. Claims / Incomes arising from price escalation and/or any other item of compensation and which are indeterminate are accounted on cash basis.

11. Trade investments and investments in subsidiary companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution in value is made wherever necessary in accordance with the mandatory Accounting Standard.

12. Employee Benefits

Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The Actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss Account. Unavailed leave balances are accounted based on respective employee's earnings as at the balance sheet date.

13. Fringe Benefits arising on options vested under Employees Stock Options Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Reserve Account. On allotment of shares, corresponding amount is transferred from Stock Options Reserve Account to Securities Premium Account.

14. Premium on redemption of Debentures/Bonds

Premium on redemption of Debentures / Bonds is accounted on redemption and set-off against the Securities Premium Account.

15. Tax Expense

(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.

(b) Deferred Tax

Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.




Mar 31, 2010

1. The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP), generally under the historical cost convention on accrual basis and exceptions to this basis, if any, are herein specifically mentioned. GAAP comprises mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI), the provisions of the Indian Companies Act, 1956 and the Guidelines issued by ICAI and Securities and Exchange Board of India (SEBI).

2. Fixed Assets are valued and shown adopting the following basis:

(a) Fixed assets and Capital work-in-progress of all the cement manufacturing facilities are shown at revalued amounts as at 31a March 2004. All other Fixed assets acquired are shown at the cost of acquisition. All costs including financing costs and applicable overheads incurred on specific projects/acquisition of undertakings are also capitalised.

(b) Fixed assets acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the tenure of the agreement

(c) Expenditures and outlays of money on uncompleted projects of a capital nature are shown as capital works-in-progress until such time these projects are completed and commissioned.

(d) (i) The company provides depreciation on written down value method for Motor Vehicles and for assets acquired prior to 1 -4-1982 at

Head Office and at Sankarnagar. (ii) Software development costs and Computers are depreciated on Straight Line method as per Section 205(2)(b) of the Companies Act,

1956. (iii) Ships are depreciated on Straight Line method, over its estimated useful life. (iv) Long term Franchisee Rights are capitalised and amortised over the initial period of ten years. (v) For all other assets Straight Line method as per Section 205(2)(b) of the Companies Act, 1956 is adopted. (vi) The depreciation on incremental value arising from the revaluation of fixed assets is charged to the Revaluation Reserve Account. (vii) Fixed assets are tested for impairment and impairment toss, if any, is provided by a charge to the Profit and Loss Account.

3. (a) Where Foreign Currency loans have been availed to acquire fixed assets from outside India, the outstanding liability on these loans is

stated at the exchange rate of the rupee as at the year end of at contracted rates with a corresponding adjustment to the carrying cost of the relevant assets. Depreciation is charged to accounts on the values so adjusted over the remaining life of the asset. (b) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Current Assets and all Liabilities, (other than for acquiring fixed assets as mentioned in 3(a) above), in Foreign currencies are translated at values prevailing as at the year end. Gains/Losses if any, arising therefrom are recognised in the Profit and Loss Account.

4. (a) Sales irducteexdsediJty, revenue from tracle related adMties and sales tax deferred as reduce

Tax deferral liability and is net of rebates, discounts and incentives.

(b) Revenue from construction projects under Real Estate and Property Development Division is recognised on percentage of completion method.

(c) Revenue on time charter of ships is recognized on a proportionate basis.

5. Valuation of inventories of raw materials, packing materials, stores, spares, fuels and work-in-process is at weighted average cost. Semi- finished goods, finished goods and Real Estate Projects are valued at cost or net realisable value whichever is tower. The value of finished goods includes excise duty.

6. Research and Development expehses not resulting in any property/equipment are charged to revenue under nominal heads.

7. Interest and other costs in connection with borrowing of funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use.

8. Claims / Incomes arising from price escalation and/or any other item of compensation and which are indeterminate are accounted on fmalization.

9. Trade investments and investments in subsidiary companies are long term investments and are carried at cost. The other investments are carried at lower of cost or realisable value. Provision for diminution value is made wherever necessary in accordance with the Accounting Standard.

10. Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The Actuarial gains / losses arising on retirement benefits are also recognised in the Profit and Loss account. Unavailed leave balances are accounted based on actuarial principles.

11. Fringe Benefits arising on options vested under Employees Stock Options Scheme (ESOS), 2006 are charged to Profit and Loss Account and credited to Stock Options Reserve Account. On allotment of shares, corresponding amount is transferred from Stock Options Reserve Account to Securities Premium Account.

12. Premium on redemption of Debentures / Bonds is accounted on redemption and set off against the Securities Premium Account.

 
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