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Accounting Policies of JK Lakshmi Cement Ltd. Company

Mar 31, 2016

1.1. The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention (except for certain fixed assets which were revalued) on the accrual basis. GAAP comprises mandatory accounting standards specified under section 133 of the Companies Act 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rule 2014 and the relevant provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2. Fixed Assets are stated at cost adjusted by revaluation of certain fixed assets.

1.3. Expenditure during construction/erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction/erection.

1.4. Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss. Premium in respect of forward contracts is recognized over the life of the contract.

1.5. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed category wise.

1.6. Inventories are valued at lower of cost and net realizable value (except scrap/ waste which are valued at net realizable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7. Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Project subsidy is credited to Capital Reserve.

1.8. Revenue expenditure on Research and Development is charged to Statement of Profit and Loss and capital expenditure is added to Fixed Assets.

1.9. Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets which is capitalized till the date of commercial use of the asset.

1.10 (i) Depreciation on Buildings, Plant & Machinery {except for Power Plants, Split Grinding Units and Ready Mix Concrete Plants (RMC)} and Railway Siding is provided as per Straight Line Method (SLM), as per useful life specified in Schedule II to the Act (Schedule II). Depreciation on Captive Power Plants, Split Grinding units & Other Assets is provided on Written Down Value (WDV) method as per the said Schedule. Depreciation on Aircraft and RMC is provided considering estimated useful life of 6 years on SLM basis. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold Land is being amortized over the lease period.

1.11. The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount in subsequent years.

1.12. Intangible Assets are being recognized if the future economic benefits attributable to the Assets are expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13. Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognized in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable/virtual certainty that sufficient future taxable income will be available against which the same can be realized.

1.14. Employee Benefits:

(i) Defined Contribution Plan

Contributions to the Employees'' Regional Provident Fund, Superannuation Fund and Pension Fund are recognized as Defined Contribution Plan and charged as expenses in the year in which the employees render the services.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as Defined Benefit Plan and determined on actuarial valuation, using the Projected Unit Credit Method, as at the date of the Balance Sheet. Actuarial Gains / Losses, if any, are immediately recognized in the Statement of Profit and Loss.

The Provident Fund Contribution other than Employees'' Regional Provident Fund, is made to Trust administered by the Trustees. The interest payable on Fund to the members of the Trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15. Provision in respect of present obligation arising out of past events are made in Accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities are not recognized but are disclosed by way of Notes to Accounts. Contingent Assets are not recognized or disclosed in Financial Statements.


Mar 31, 2014

1.1. The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions the Companies Act, 2013 (to the extent notified), the Companies Act, 1956 (to the extent applicable). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2. Fixed Assets are stated at cost adjusted by revaluation / business valuation.

1.3. Expenditure during construction/erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction/erection.

1.4. Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss . Premium in respect of forward contracts is recognized over the life of the contract.

1.5. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed categorywise.

1.6. Inventories are valued at lower of cost and net realisable value (except scrap/ waste which are valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7. Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Project subsidy is credited to Capital Reserve.

1.8. Revenue expenditure on Research and Development is charged to Statement of Profit and Loss and capital expenditure is added to Fixed Assets.

1.9. Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets which is capitalized till the date of commercial use of the asset.

1.10 (i) Depreciation on Buildings, Plant & Machinery {except for Power Plants, Split Grinding Units and Ready Mix Concrete Plants (RMC)} and Railway Siding is provided as per straight line method, at the rates and in the manner specified in Schedule XIV to the Companies Act 1956 as amended. Depreciation on Captive Power Plants, Split Grinding units & Other Assets is provided on written down value method as per the said Schedule. Depreciation on Aircraft and RMC is provided @15% on SLM basis, based on their useful economic life. Continuous Process Plants as defined in Schedule XIV have been considered on technical evaluation. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold Land is being amortized over the lease period.

(iii) Depreciation on the increased amount of assets due to revaluation / business valuation is computed on the basis of residual life of the assets as estimated by the valuers on straight line method.

1.11. The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. Previously recognised impairment loss is further provided or reversed depending on change in its estimated recoverable amount in subsequent years.

1.12. Intangible Assets are being recognized if the future economic benefits attributable to the Assets expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13. Current Ta x is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable/virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14. Employee Benefits:

(i) Defined Contribution Plan

Employees benefits in the form of Superannuation Fund and Provident Fund(PF) considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gain / losses, if any, are immediately recognized in the Statement of Profit and Loss.

The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15. Provision in respect of present obligation arising out of past events are made in Accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements.

c. Terms/ right attached to equity shareholders :

i) The Company has only one class of Equity Shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iii) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

* Pursuant to the buy back Scheme the Company bought back during the year 2011-12 , 7000 Equity Shares.

1 Secured Redeemable Non-Convertible Debentures (NCDs) are privately placed and consists of :

i) 9.85% NCDs Series A of Rs. 100 crore are redeemable in two equal annual installments at the end of 4th(since redeemed) and 5th year from the date of allotment i.e. 4th Feb, 2010.

ii) 10.05% NCDs Series B-1 of Rs. 40 crore are redeemable in two equal annual installments at the end of 6th and 7th year from the date of allotment i.e. 4th Feb, 2010.

iii) 10.35% NCDs Series B-2 of Rs. 60 crore are redeemable in three equal annual installments at the end of 8th, 9th and 10th year from the date of allotment i.e. 4th Feb, 2010.

1a. 9% Secured Redeemable Non Convertiable Debentures ( NCDs) of Rs.. 49.79 crore are redeemable in 3 equal annual installments, at the end of 6th, 7th and 8th year from the date of allotment, i.e. 20th July 2012.

2 All the NCDs are secured by a mortgage on the Company''s immovable properties located in the State of Gujarat and are also secured by way of a first charge on all the immovable and movable fixed assets pertaining to the Company''s Cement Unit situated at Jaykaypuram, Basantgarh, Distt. Sirohi, in the State of Rajasthan, ranking pari-passu with the charges created on the said fixed assets, subject to the prior charges in favour of Banks on specified assets.

3 Term Loans from Banks aggregating to Rs.299.19 crore are secured by way of a first charge on all the immovable and movable properties pertaining to the Company''s Cement Unit situated at Jaykaypuram, Basantgarh, Distt. Sirohi, in the State of Rajasthan, ranking pari-passu with the charges created on the said assets subject to the prior charges in favour of Banks on specified assets and Company''s Banks for working capital on specified movables assets. These Term Loans are / shall be repayable as under:

a) Term Loans aggregating to Rs. 28.57 crore are repayable in 8 equal quarterly installments.

b) Term Loan of Rs. 30.62 crore is repayable in 28 equal quarterly installments.

c) Term Loan of Rs. 45.00 crore is repayable in 15 equal quarterly installments .

d) Term Loan of Rs. 70.00 crore shall be repayable in 32 equal quarterly installments commencing from 30th June , 2014.

e) Term Loan of Rs. 125.00 crore shall be repayable in 2 equal half yearly installments commencing from 31st January, 2015 .

4 Term Loans from Banks aggregating to Rs.105.16 crore are secured by way of an exclusive charge on certain specified assets of the Company situated at Jaykaypuram, Basantgarh, Distt. Sirohi, in the State of Rajasthan. These Term Loans are repayable as under:

a) Term Loans aggregating to Rs. 13.00 crore are repayable in 6 equal quarterly installments.

b) Term Loan of Rs. 10.91 crore is repayable in 8 equal quarterly installments.

c) Term Loan of Rs. 37.50 crore is repayable in 12 equal quarterly installments.

d) Term Loan of Rs. 43.75 crore is repayable in 28 equal quarterly installments .

5 Term Loan from a Bank of Rs. 70.00 crore is secured by way of an exclusive first charge on immovable & movable fixed assets of the Company''s Split Grinding Unit situated at Jhajjar, in the State of Haryana, except charge on the Current Assets. This Term Loan shall be repayable in 32 equal quarterly installments commencing from 30th June 2014.

6 Term Loan from a Bank of Rs. 40.00 crore is secured by way of an exclusive first charge on movable assets of the Company''s AAC Block Unit situated at Jhajjar, in the State of Haryana,except charge on current assets. This Term Loan shall be repayable in 32 equal quarterly installments commencing from 30th June 2015.

7 Term Loan from a Bank of Rs. 50.00 crore is secured /to be secured by way of an exclusive first charge on movable and immovable assets of the Company''s 2nd Split Grinding Unit situated at Jhajjar, in the State of Haryana,except charge on current assets. This Term Loan shall be repayable in 32 quarterly installments commencing from 31st March 2016.

8 Term Loans from Banks aggregating to Rs. 750.00 crore are secured / to be secured by way of first pari passu charge on all the immovable and movable fixed assets of the Company''s Greenfield Cement Plant at Durg in the State of Chattisgarh. These Term Loans shall be repayable in 40 equal quarterly installments commencing from 31st December 2015.

9 Unsecured Deferred Sales Tax Loan of Rs. 63.78 crore is repayable in 8 quarterly installments .

10 Fixed Deposits represents the Deposits accepted by the Company from Public under its Fixed Deposit Scheme having maturity of 2 & 3 years from the date of deposits.


Mar 31, 2013

1.1 The financial statements have been prepared under historical cost convention (except for certain fixed assets which have been adjusted by revaluation / business valuation ) on accrual basis in compliance with applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and relevant provisions of the Companies Act, 1956. Accounting Policies are consistent with the Generally Accepted Accounting Principles.

1.2 Fixed Assets are stated at cost adjusted by revaluation / business valuation.

1.3 Expenditure during construction / erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction/erection.

1.4 Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss . Premium in respect of forward contracts is recognized over the life of the contract.

1.5 Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed categorywise.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap/ waste which are valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7 Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Project subsidy is credited to Capital Reserve.

1.8 Revenue expenditure on Research and Development is charged to Statement of Profit and Loss and capital expenditure is added to Fixed Assets.

1.9 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets which is capitalized till the date of commercial use of the asset.

1.10 (i) Depreciation on Buildings, Plant & Machinery {except for Captive Power Plants, Split Grinding Units and Ready Mix Concrete Plants (RMC)} and Railway Siding is provided as per straight line method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 as amended. Depreciation on Captive Power Plants, Split Grinding units & Other Assets is provided on written down value method as per the said Schedule. Depreciation on Aircraft and RMC is provided @15% on SLM basis, based on their useful economic life. Continuous Process Plants as defined in Schedule XIV have been considered on technical evaluation. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold Land is being amortized over the lease period.

(iii) Depreciation on the increased amount of assets due to revaluation / business valuation is computed on the basis of residual life of the assets as estimated by the valuers on straight line method.

1.11 The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. Previously recognised impairment loss is further provided or reversed depending on change in its estimated recoverable amount in subsequent years.

1.12 Intangible Assets are being recognized if the future economic benefits attributable to the Assets expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable/virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14 Employee Benefits:

(i) Defined Contribution Plan

Employees benefits in the form of Superannuation Fund and Provident Fund (PF) considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gain / losses, if any, are immediately recognized in the Statement of Profit and Loss.

The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15 Provision in respect of present obligation arising out of past events are made in accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements.


Mar 31, 2012

1.1 The financial statements have been prepared under historical cost convention (except for certain fixed assets which have been adjusted by revaluation / business valuation ) on accrual basis in compliance with applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies Act, 1956. Accounting Policies are consistent with the Generally Accepted Accounting Principles.

1.2 Fixed Assets are stated at cost adjusted by revaluation / business valuation.

1.3 Expenditure during construction / erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction / erection.

1.4 Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss. Premium in respect of forward contracts is recognized over the life of the contract.

1.5 Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed categorywise.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap / waste which are valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7 Export incentives, Duty drawbacks and Other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Project subsidy is credited to Capital Reserve.

1.8 Revenue expenditure on Research and Development is charged to Statement of Profit and Loss and capital expenditure is added to Fixed Assets.

1.9 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets which is capitalized till the date of commercial use of the asset.

1.10 (i) Depreciation on Buildings, Plant & Machinery {except for Captive Power Plants, Ready Mix Concrete Plants (RMC)} and Railway Siding is provided as per straight line method, at the rates and in the manner specified in Schedule XIV to the Companies Act 1956. Depreciation on Captive Power Plants & Other Assets is provided on written down value method as per the said Schedule as amended. Depreciation on Aircraft and RMC is provided @15% on SLM basis, based on their useful economic life. Continuous Process Plants as defined in Schedule XIV to the Companies Act 1956 have been considered on technical evaluation. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold Land is being amortized over the lease period.

(iii) Depreciation on the increased amount of assets due to revaluation / business valuation is computed on the basis of residual life of the assets as estimated by the valuers on straight line method.

1.11 The carrying amounts of assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expenses in the Statement of Profit & Loss, wherever the carrying amount of the asset exceeds its recoverable amount. Previously recognised impairment loss is further provided or reversed depending on change in its estimated recoverable amount in subsequent years.

1.12 Intangible Assets are being recognized if the future economic benefits attributable to the assets expected to flow to the Company and cost of the asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable/virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14 Employee Benefits:

(i) Defined Contribution Plan

Employees benefits in the form of Superannuation Fund, Provident Fund (PF) and ESIC considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gain / losses, if any, are immediately recognized in the Statement of Profit and Loss.

The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15 Provision in respect of present obligation arising out of past events are made in accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements but are included, if any, in the Directors' Report.


Mar 31, 2011

1. The financial statements have been prepared under historical cost convention (except for certain fixed assets which have been adjusted by revaluation/business valuation) on accrual basis in compliance with applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies Act, 1956. Accounting Policies are consistent with the Generally Accepted Accounting Principles.

2. Fixed Assets are stated at cost adjusted by revaluation/business valuation.

3. Expenditure during construction/erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction/erection.

4. Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate prevailing at the end of the year and exchange difference in respect thereof is charged to Profit & Loss Account. Premium in respect of forward contracts is recognized over the life of the contract.

5. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed category wise.

6. Inventories are valued at lower of cost and net realisable value (except scrap/ waste which are valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

7. Export incentives, Duty drawbacks and Other benefits are recognized in the Profit and Loss Account. Project subsidy is credited to Capital Reserve.

8. Revenue expenditure on Research and Development is charged to Profit and Loss Account and capital expenditure is added to Fixed Assets.

9. Borrowing cost is charged to Profit and Loss Account except cost of borrowing for acquisition of qualifying assets which is capitalised till the date of commercial use of the asset.

10. (i) Depreciation on Buildings, Plant & Machinery and Railway Siding is provided as per straight line method considering the rates in force at the time of respective additions of the assets made before 2nd April 1987 and on additions thereafter at the rates and in the manner specified in Schedule XIV to the Companies Act 1956. Depreciation on Other Assets is provided on written down value method as per the said Schedule as amended. Continuous Process Plants as defined in Schedule XIV have been considered on technical evaluation. Depreciation on impaired assets is provided on the basis of their residual useful life.

(ii) Leasehold Land is being amortized over the lease period.

(iii) Depreciation on the increased amount of assets due to revaluation / business valuation is computed on the basis of residual life of the assets as estimated by the valuers on straight line method.

11. The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expenses in the Profit &Loss Account, wherever the carrying amount of the Asset exceeds its recoverable amount. Previously recognised impairment loss is further provided or reversed depending on change in its estimated recoverable amount in subsequent years.

12. Intangible Assets are being recognized if the future economic benefits attributable to the Assets expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

13. Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable/virtual certainty that sufficient future taxable income will be available against which the same can be realised.

14. Employee Benefits:

(i) Defined Contribution Plan

Employees benefits in the form of Superannuation Fund , Provident Fund (PF) and ESIC considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gain / losses, if any, are immediately recognized in the Profit and Loss Account.

The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

15. Provision in respect of present obligation arising out of past events are made in Accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements but are included, if any, in the Directors Report.

 
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