Accounting Policies of Mangalam Cement Ltd. Company
Mar 31, 2018
NOTE 32
Significant Accounting Policies and Notes on Accounts as at and for the year ended on 31 st March 2018 32.1. Corporate Information Mangalam Cement Limited (''MCL'' or ''the Company'') Is a public limited company domiciled and incorporated in India and its shares are publicly traded on the National Stock Exchange (''NSE'') and the Bombay Stock Exchange (''BSE''), in India. The registered office of the Company is at Aditya Nagar, Morak -326520, Kota (Rajasthan). The Company is principally engaged in manufacturing of Cement in India. These financial statements are prepared in Indian rupees.
These financial statements were authorised for issue by the Board of Directors at their meeting held on 15th May, 2018.
32.2 Significant Accounting Policies
The Company has consistently applied the following accounting policies to all periods presented in the financial statements.
32.2.1 Basis of preparation (Compliance with Ind-AS)
The financial statements have been prepared in accordance with all material respects with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standard Rules), 2015 notified under section 133 of Companies Act, 2013 and Companies (Indian Accounting Standard) Amendment Rules, 2016 and other relevant provisions of the Companies Act, 2013.
Accounting Policies have been consistently applied except where a newly issued accounting standards is initially adopted or a revision to an existing accounting standard required a change in the accounting policy hitherto in use.
32.2.2 Basis of measurement
The financial statements have been prepared under the historical cost convention on accrual basis except certain insurance claims which are accounted for on receipt basis on account of uncertainties and the following items, which are measured on following basis on each reporting date:
- Certain financial assets and liabilities (including derivative instruments) that is measured at fair value
- Defined benefit liability/(assets): present value of defined benefit obligation less fair value of plan assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company take into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company
can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
32.2.3 Functional and presentation currency
These financial statements are presented in Indian National Rupee (''INR''), which is the Company''s functional currency. All amounts have been rounded to the nearest Lakhs, unless otherwise indicated.
32.2.4 Significant accounting Judgements and Estimates
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company''s accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to estimates are recognised prospectively.
A. Judgements
Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below:
- Classification of leases into finance and operating lease
- Classification of financial assets: assessment of business model within which the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding.
B. Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for every period ended is included below:
- Measurement of defined benefit obligations: key actuarial assumptions;
- Recognition of deferred tax assets: availability of future taxable profit against which carry-forward tax losses can be used;
- Impairment test key assumptions underlying recoverable amounts.
- Useful life and residual value of fixed assets
- Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources
- Impairment of financial assets: key assumptions used in estimating recoverable cash flows
- In determining the fair value of the mine restoration obligation the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs. Discount rates are determined based on expected rate of return.
32.2.5 Classification of Assets and Liabilities as Current and Non-Current
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset/liabilities is treated as current when it is:
- Expected to be realised/settled (liabilities) or intended to be sold or consumed in normal operating cycle.
- Held primarily for the purpose of trading
- Expected to be realised/settled within twelve months after the reporting period, or
- Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other assets/liabilities are classified as non-current. Deferred tax assets and liabilities are classified as noncurrent assets/liabilities.
The operating cycle is the time between the acquisition of the assets for processing and their realisation in cash and cash equivalents.
32.2.6 Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred up to the date when the assets are ready to use. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed less any impairment loss, if any.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate item (major components) of property, plant and equipment. Any gain on disposal of property, plant and equipment is recognised in Statement of Profit and loss.
Subsequent Measurement
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation
Depreciation on fixed assets is calculated on Straight Line Method using the rates arrived at based on the estimated useful lives given in Schedule II of the Companies Act, 2013. Depreciation on additions to or on disposal of assets is calculated on pro-rata basis. Depreciation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively.
Capital work-in-progress
Capital work-in-progress assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.
Disposal of assets
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.
32.2.7 Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment. Intangible assets are amortised over their respective individual estimated useful life on a straight line method. The useful lives of intangible assets are as follows:
a) Mining rights are amortised over the period of the leases.
b) Computer software is amortised over a period of 5 years. Cost of Site restoration is capitalised as Intangible Assets under the head "Mining Rightsâ. Amortisation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the statement of profit and loss when the asset is derecognised.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired, impairment loss is recognised in the statement of profit & loss.
32.2.8 Non-current assets (or disposal groups) held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated
32.2.9 Impairment of non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years. A reversal of impairment loss is recognised immediately in the Statement of Profit & Loss.
32.2.10 Research and Development Expenses
Revenue expenditure on Research and Development is charged as expenses under the head âResearch and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.
32.2.11 Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets up to the assets are substantially ready for their intended use or sale.
The loan origination costs directly attributable to the acquisition of borrowings (e.g. loan processing fee, upfront fee) are amortised on the basis of the Effective Interest Rate (EIR) method over the term of the loan.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
32.2.12 Foreign currency transactions
Transactions in foreign currencies are recorded by the Company at their respective functional currency considering exchange rates prevailing on the date of transactions qualifies for recognition. Monetary assets and liabilities denominated in foreign currency are translated to the functional currency at the exchange rates prevailing at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in the statement of profit
and loss except exchange differences on foreign currency borrowings included in the borrowing cost when they are regarded as an adjustment to interest costs on those foreign currency borrowings.
32.2.13 Employee benefits
a. Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
b. Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided. The company has following defined contribution plans:
a) Provident fund
b) Super Annulation Fund
c. Defined benefit plans
For defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss. Past service cost is recognised in the statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- net interest expense or income; and
- remeasurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
d. Other long-term employee benefits
The company has long term employment benefit plans
i.e. accumulated leave. The liability for accumulated
leave, which is a defined benefit scheme, is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
32.2.14 Revenue Recognition
a. The Company recognises revenue from sale of goods when the titles have been passed at which time all the following conditions are satisfied:
i) the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
ii) the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
iii) the amount of revenue can be measured reliably;
iv) it is probable that the economic benefits associated with the transaction will flow to the Company; and
v) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue represents net value of goods and services provided to customers after deducting for certain incentives including, but not limited to discounts, volume rebates, etc. Shipping and handling amounts invoiced to customers are included in revenue and the related shipping and handling costs incurred are included in freight and forwarding expenses when the Company is acting as principal in the shipping and handling arrangement. Sales include excise duty, wherever applicable and are net of Sales Tax / Goods and Service Tax.
b. Revenue (other than sale) is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Export incentives and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions and the incentive will be received. Claim on insurance companies and others, where quantum of accrual cannot be ascertained with reasonable certainty, are accounted for on acceptance basis.
c. Interest income on deposits is recognised on a time proportion basis.
d. Dividend income is recognised when the right to receive dividend is established.
32.2.15 Government Grants and Subsidies
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants that compensate the Company for expenses incurred are recognised in the statement of profit and loss, as income or deduction from the relevant expense, on a systematic basis in the periods in which the expense is recognised.
When the grant relate to an asset, it is recognised as income in equal amounts over the expected useful life of related assets.
32.2.16 Inventories
i. Inventories are valued as follows :
Raw materials, stores and spares: Lower of cost and net realisable value. Cost is determined on a weighted average basis. Materials and other items held for use in the production of inventories are not written down below costs, if finished goods in which they will be incorporated are expected to be sold at or above cost.
Work-in-progress, finished goods and traded goods: Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads.
Waste: At net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
ii. Provision for obsolete/ old inventories is made, wherever required.
32.2.17 Mining Restoration
Mine restoration expenditure is provided for in the Statement of Profit and Loss based on present value of estimated expenditure required to be made towards site restoration at the time of vacation of mine. The unwinding of the discount is expensed as incurred and recognised as a finance cost in the Statement of Profit and Loss. The cost estimates are reviewed periodically and adjusted as appropriate. Changes in the estimated future costs or discount rate applied are added to or deducted from the site restoration cost.
32.2.18 Provisions and contingencies. Contingent liabilities and Contingent Assets
Based on the best estimate, provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable ("more likely than not'') that it is required to settle the obligation, and a reliable estimate can be made of the amount of the obligation at reporting date.
A contingent liability is a possible obligation that arises from a past event, with the resolution of the contingency dependent on uncertain future events, or a present obligation where no outflow is probable. Major contingent liabilities are disclosed in the financial statements unless the possibility of an outflow of economic resources is remote. Contingent assets are not recognized in the financial statements but disclosed, where an inflow of economic benefit is probable.
32.2.19 Measurement of fair value
a. Financial instruments
The estimated fair value of the Company''s financial instruments is based on market prices and valuation techniques. Valuations are made with the objective to include relevant factors that market participants would consider in setting a price, and to apply accepted economic and financial methodologies for the pricing of financial instruments. References for less active markets are carefully reviewed to establish relevant and comparable data.
b. Marketable and non-marketable equity securities Fair value for listed shares is based on quoted market prices as of the reporting date. Fair value for unlisted shares is calculated based on commonly accepted valuation techniques utilizing significant unobservable data, primarily cash flow-based models,
c. Derivatives
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value provided by the respective banks. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss.
32.2.20 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward contracts and interest rate swaps,
a. Financial Assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Classifications
The company classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the company''s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Business model assessment
The company makes an assessment of the objective of a business model in which an asset is held at an instrument level because this best reflects the way the business is managed and information is provided to management.
Financial Assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met:
* it is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
* the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (''EIR'') method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
Financial Assets at fair value through Other Comprehensive Income (FVOCI)
Financial Assets with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI.
Financial Assets at fair value through profit and loss (FVTPL)
Any Financial Assets, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
b. Equity Instruments
All equity instruments in scope of Ind AS 109 are measured at fair value. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.
All other Financial Instruments are classified as measured at FVTPL
De-recognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the company''s balance sheet) when:
* The rights to receive cash flows from the asset have expired, or
* The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company''s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.
On de-recognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit loss associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial
Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables.
c. Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial Liabilities measured at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risks are recognized in OCI. These gains/loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.
De-recognition of financial liabilities
The company derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
32.2.21 Income tax
Income tax expense comprises current and deferred tax. It
is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company:
a) Has a legally enforceable right to set off the recognised amounts; and
b) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in the statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
combination.
Credit of Minimum Alternative Tax (MAT) is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
32.2.22 Leases
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease''s inception at the fair value of the leased property or, if lower, the percentage value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Lease in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
32.2.23 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents is as defined above, net of outstanding bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.
32.2.24 Earning Per Share
Basic Earnings per equity shares are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year.
For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the period are adjusted for the effect of all diluted potential equity shares.
32.2.25 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount
is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the group or the counterparty.
32.2.26 Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
a. Amendment to Ind AS 21
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28,2018, Ministry of Corporate Affairs CMCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the requirements of the amendment and the effect on the financial statements will be given in due course.
b. Amendment to Ind AS 115
Ind AS 115- Revenue from Contract with Customers: On March 28,2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The standard permits two possible methods of transition:
i. Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
ii. Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).
The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1,2018. The Company is evaluating the requirements of the amendment and the effect on the financial statements will be given in due course.
Note No. 32.3
Contingent Liabilities and Commitments:
I. Contingent Liabilities (not provided for) In respect of:
(b) The Jute Packaging (Compulsory use In Packing Commodities) Act 1987 was stayed by the Rajasthan High Court in 1997. However, the Jute Commissioner issued a show cause notice on 14.08.2002 for non-use of Jute Packaging Material. This has been challenged by the Company and the amount involved is not quantifiable.
(c) Rajasthan Sales-tax Authorities has raised demand Rs. 3890.17 (Previous year Rs. 3890.17) and interest thereon Rs. 4246.48 (Previous year Rs. 4246.48) against Sales-tax incentive claimed by the Company in earlier years relying upon direction of BIFR dated 31.05.2007. On appeal, Rajasthan Tax Board has given order in favour of the Company. However, Commercial taxes department has filed revision before Hon''ble Rajasthan High Court against the order.
The Company has engaged competent professional advisors to defend its positions against all disputed claims/notices and the Company is hopeful of favourable decisions and expect no outflow of resources, hence no provision is made in the books of accounts.
(b) The Company has availed certain Government subsidies. As per the terms and conditions, the Company has to continue production for specified number of years and other conditions failing which amount of subsidise availed along with interest, penalty etc. will have to be refunded.
Mar 31, 2017
1. Corporate Information
Mangalam Cement Limited (MCL) is a public limited company domiciled and incorporated in India and its shares are publicly traded on the National Stock Exchange (''NSE'') and the Bombay Stock Exchange (''BSE''), in India. The registered office of MCL, Aditya Nagar Morak -326520, Kota (Rajasthan). The Company is principally engaged in manufacturing of Cement in India. These financial statements are prepared in Indian rupees.
The financial statements were approved and adopted by board of directors of the Company in their meeting held on 13th May 2017.
2. Basis of preparation Compliance with Ind AS
The financial statements have been prepared in accordance with all material respects with the accounting standards (Ind AS) as per Companies (Indian Accounting Standard Rules), 2015 notified under section 133 of Companies Act 2013 and Companies (Indian Accounting Standard) Amendment Rules 2016 and other relevant provisions of the Companies Act, 2013.
The financial statements up to year ended 31st March 2016 were prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules ,2006 (as amended) and other relevant provisions of the Act.
3. Significant accounting Policies
3.1 Basis of Measurement
These accounts are prepared on historical cost basis except for certain financial Assets and liabilities (including derivatives instruments) measured at fair value.
3.2 Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statement and reported amounts of revenue and expenses during the period. Application of accounting policies that requires critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimate could change from period to period. Actual results could differ from those judgments. Appropriate changes in estimates are made as management become aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which change are made and if material, their effects are disclosed in the notes to the financial statements.
3.3 Significant accounting Judgments, estimates, assumptions
In the process of applying the Company''s accounting policies, management has made the following key estimates, assumptions and judgments, which have significant effect on the amounts recognized in the financial statement :
(a) Income taxes
Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
(b) Contingencies
Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
(c) Mine restoration obligations
In determining the fair value of the mine restoration obligation the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs. Discount rates are determined based on expected rate of return.
(d) Insurance Claims
Insurance and other claims raised by the Company are accounted for when received owing to uncertainties involved.
3.4 Current versus non-current classification
The Company present assets and liabilities in the balance sheet based on current/non-current classification.
(A) An asset treated as current when it is:
(i) Expected to be realized or intended to be sold or consumed in normal operating cycle,
(ii) Held primarily for the purpose of trading,
(iii) Expected to be realized within twelve months after the reporting period, or
(iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
(B) A liability is current when :
(i) It is expected to be settled in normal operating cycle.
(ii) It is held primarily for the purpose of trading,
(iii) It is due to be settled within twelve months after the reporting period, or
(iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
3.5 Reclassification of financial assets and liabilities
The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no classification is made for financial assets which are equity instruments and financial liabilities. For financials assets which are debt instruments; a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company''s senior management determines change in the business model as a result of external or internal changes which are significant to the company''s operations. Such changes are evident to the external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period. Following the changes in business model, the company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
3.6 Foreign Currencies Transactions
All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss is recognized in the statement of Profit and Loss.
3.7 Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Sale of Goods
Sales are recognized when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and are measured at the fair value of the consideration received and receivable inclusive of excise duty and net of trade discounts, allowable sales return and sales tax/value added tax.
Interest Income
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable
Dividend
Dividend income is recognized when the right to receive dividend is established
3.8 Government Grants
Government Grants are recognized where there is reasonable assurance that the grant will be received and all attached condition will be complied with.
Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Investment subsidy/employment generation subsidy and other revenue grants are credited to Statement of Profit and Loss or deducted from the related expenses.
3.9 Taxation
Income tax expense represents the sum of current and deferred tax (including MAT). Current income tax assets and liabilities are measured at the amount to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.
Income tax expense is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or other comprehensive income, in such cases the tax is also recognized directly in equity or in other comprehensive income.
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax assets and deferred tax liabilities are off set, and presented as net.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilized.
Minimum Alternative Tax (MAT) is applicable to the Company. Credit of MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
3.10 Property, Plant and Equipment
The Company considers the previous GAAP carrying value for all its Property, Plant and Equipment as deemed cost at the transaction date, viz. 1st April 2015 Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment of loss, if any.
Cost of any item of property, plant and equipment comprises its purchase price including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition cost of dismantling and removing the item and restoring the site on which it is located.
Capital work in progress is stated at cost incurred during the construction / installation / pre-operation period relating to items of project in progress.
On transition to IND AS, the Company has elected to continue with carrying value of all of its property plant and equipment recognized as at 1 April 2015, measured as per the previous GAAP and use that carrying value as the deemed Cost of such property, plant and Equipment.
Depreciation is provided on the straight line method by depreciating carrying amount of Property, Plant and Equipment over remaining useful life of the assets.
Depreciation methods, useful life and residual values are reviewed at each financial year end. The useful life and residual value as per such review is normally in accordance with schedule II of the Companies Act 2013.The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of disposal or retirement.
3.11 Intangible Assets
Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful life on a straight line method. The useful lives of intangible assets are as follows:
(a) Mining rights are amortized over the period of the leases.
(b) Computer software is amortized over a period of 5 years. Cost of Site restoration is capitalized as Property, Plant and Equipment under the headâ Site Restoration Costâ.
3.12 Impairment of Assets
The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.
3.13 Borrowing Costs
Interest and other costs connected with the borrowing for the acquisition / construction of qualifying fixed assets are capitalized up to the date that when such asset are ready for their intended use and other borrowing cost are charged to statement of profit & loss. Borrowing cost includes exchange difference to the extent regarded as an adjustment to the borrowing cost.
3.14 Lease
Leases under which the Company assumes substantially all risks and rewards of ownership are classified as finance lease. When acquired such assets are capitalized at fair value or present value of minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating lease are recognized as an expenses on a straight line basis in the Statement of Profit and Loss account over the lease term.
3.15 Inventories
Inventories are valued at the lower of cost and net realizable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Work In Progress has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realizable value.
3.16 Provision and Contingencies
A provision is recognized if as a result of past event the company has a present legal or constructive obligation that is reasonably estimated and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by discontinuing the expected cash flow at a pre-tax rate that reflects current market assessments of the time value of the money and the risk specific to the liabilities. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognized in the financial statements, as they are dependent on the outcome of legal or other processes.
Mine restoration expenditure is provided for in the Statement of Profit and Loss based on present value of estimated expenditure required to be made towards site restoration at the time of vacation of mine. The unwinding of the discount is expensed as incurred and recognized as a finance cost in the Statement of Profit and Loss. The cost estimates are reviewed periodically and adjusted as appropriate. Changes in the estimated future costs or discount rate applied are added to or deducted from the Site restoration cost.
3.17 Employee Benefits :
Expenses and liabilities in respect of employee benefit are recorded in accordance with Indian Accounting Standard (Ind AS 19 employees benefit)
(i) Defined Contribution Plan: Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognized during the period in which the employee renders the related services.
(ii) Defined Benefit Plan: The employeeâs gratuity fund and leave encashment schemes are the Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by actuary at each Balance Sheet date. Actuarial gain /loss, if any, arising from experience adjustments and change in actuarial assumptions are charged or credited to Other Comprehensive income in the period in which they arise. Net Interest Cost are charged as interest Cost in statement of profit and Loss account.
3.18 Cash and Cash Equivalents
Cash and Cash equivalents in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of Company''s Cash Management.
3.19 Dividend
Annual dividend distribution to the shareholders is recognized as a liability in the period in which the dividend is approved by the shareholders. Dividend payable and corresponding tax on dividend distribution is recognized directly in equity.
3.20 Earnings Per Share
Basic Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year.
For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the period are adjusted for the effect of all diluted potential equity shares.
3.21 Research and Development Expenses
Revenue expenditure on Research and Development is charged as expenses under the head "Research and Developmentâ in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and depreciated according to the policy followed by the Company.
3.22 Financial Instruments
(a) Financial Assets
Initial Recognition and Measurement
All financial Assets are recognized initially at fair value plus, in case of financial assets not recorded at fair value through profit or loss, transaction cost that are attributable to the acquisition of the financial asset.
Subsequent measurement
(i) Financial Assets carried at amortized Cost- A Financial Assets is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest term on the principal amount outstanding.
(ii) Financial Assets at fair value through other comprehensive income- A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on a specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has made an irrevocable election for its investment which are classified as equity instruments to present the subsequent changes in fair value in other Comprehensive income based on its business model. Further, in case where the company has made an irrecoverable election based on its business model for its investments, which are classified as equity instrument the subsequent changes in fair value are recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss -
A Financial Assets which is not classified in any of the above categories are included within Fair value through Profit or Loss.
(b) Financial Liabilities
Initial recognition and Measurement
Financial Liability are recognized at fair value on initial recognition and in case of loan and borrowing and payables net of directly attributable transaction costs.
Subsequent recognition
Financial Liabilities are subsequently carried at amortized cost using effective interest method. For trade and other payables maturing within one year from the Balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(c) Derivatives
The Company uses derivative financial instruments, such as Option Contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognized at fair value on the date derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
(d) De-recognition of financial instrument
The company de-recognizes the financial assets when contractual right to cash flow from financial assets expire or it transfer the financial assets and transfer qualities for de-recognition under IND AS 109. A financial liability or a part of a financial liability is de-recognized from the company''s Balance Sheet when obligation specified in the contract is discharged or cancelled or expires.
3.23 Fair value financial instruments
The company measure financial instrument at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
In determining the fair value of its financial instruments, the company use various method and assumption that are based on market conditions and risks existing at each reporting date. The methods used to determine the fair value includes discounted cash flow analysis, available quoted market price and dealer quotes and valuation report etc. The method of assessing fair value results in general approximation of value and such value may never actually be realized.
3.24 Recent accounting pronouncements
Standard issued but yet not effective
In March 2017, the Ministry of Corporate affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules 2017, notifying amendments to Ind AS 7''Statement of cash flows'' and Ind AS 102, ''Share -based payment''. These amendments are in accordance with the recent amendments made by International Accounting Standard Board (IASB) to IAS 7,''statements of cash flows'' and IFRS 2, ''Share based payment,'' respectively. The amendments are applicable to the Company from April 1,2017.
Amendments to Ind AS 7
The amendments to Ind AS require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financial activities including both changes arising from cash flows and non -cash changes, suggesting inclusion of a reconciliation between the opening and closing balance in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendments and the effect on the financial statements is being evaluated.
Amendment to Ind AS 102
The amendments to Ind AS 102 provide specific guidance to measurement of cash-settled awards, modifications of cash-settled awards and awards that includes a net settlement features in respect of withholding taxes.
The Company is evaluating the requirements of the amendments and the impact on the financial statements is being evaluated.
Mar 31, 2015
1. Accounting Concepts
The financial statements have been prepared in compliance in all
material respects with the accounting standards notified by the
Companies Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 2013. These accounts are prepared on
the historical cost basis and applying the principles of accounting for
a going concern. The accounting policies are consistent with those used
in the previous year.
2. Recognition of Income and Expenditure
Expenses and income are accounted for on an accrual basis. Insurance
and other claims raised by the Company are accounted for when received
and are not material by reference to the total operations.
3. Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost for the purpose of valuation of Raw Materials and Stores and Spare
Parts has been computed on the weighted average method. Cost for the
purpose of valuation of Finished Goods and Material-in-Process has been
computed on the basis of cost of material, labour and other costs
incurred in bringing the inventories to their present location and
condition. Scrap and Waste have been valued at net realisable value.
4. Investments
Long Term Investments are stated at cost. Provision is made for
diminution, other than temporary in the value of such investments and
for this purpose, the investee company's assets and estimated future
cash flows are used to determine whether any diminution other than
temporary has taken place. Current Investments are stated at cost or
fair value, whichever is lower, computed category wise.
5. Fixed Assets
(a) Fixed assets are stated at their original cost of
acquisition/installation net of accumulated depreciation, amortisation
and impairment losses, except freehold land which is carried at cost.
Leasehold land is amortised over the lease period.
(b) Capital work in progress is stated at cost incurred during the
construction/ installation/ preoperative period relating to items or
projects in progress.
(c) Expenditure during Construction Period is included under Capital
Work-In Progress and allocated to the respective fixed assets on
commencement of commercial production.
6. Impairment of Assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of the cash flow expected to arise from the continuing
use of the asset and its eventual disposal. A provision for impairment
loss is made when the recoverable amount of the asset is lower than the
carrying amount.
7. Depreciation
I. Tangible Assets
Depreciation is provided on the straight line method by depreciating
carrying amount of fixed assets as on 1st April 2014 over remaining
useful life of the assets as per schedule II of the Companies Act 2013.
Continuous process plants as defined therein have been assessed
technically and depreciation is provided accordingly. Depreciation on
the increase in the value of fixed assets due to revaluation is
computed on the basis of remaining useful life as estimated by the
valuer on the straight line method. Depreciation of Fixed Assets on the
land, belonging to Kota Super Thermal Power Station, Kota is amortised
over the period of the agreement for extraction of fly ash between the
company and Kota Super Thermal Power Station.
II. Intangible Assets
(a) Mining rights are amortised over the period of the leases.
(b) Computer software is amortised over a period of 5 year
8. Employee Benefits
(i) Defined Contribution Plan : Employee benefits in the form of
superannuation fund and the state governed provident fund are defined
contribution plan. The contribution under the scheme is recognised
during the period in which the employee renders the related services.
(ii) Defined Benefit Plan: The employee's gratuity fund and leave
encashment schemes are the Company's defined benefit plans. The
present value of the obligations under such defined benefit plans is
determined based on actuarial valuations using the Projected Unit
Credit Method.
9. Foreign Currency Transactions
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the date of the transactions. Monetary assets
and liabilities in foreign currency outstanding at the close of the
year are converted to Indian currency at exchange rates prevailing at
the year end. The resulting gain or loss (other than for capital
assets) is recognised in the statement of Profit and Loss. The gain or
loss relating to long term monetary items for financing acquisition of
capital assets is adjusted to the acquisition cost of such assets and
depreciated over their remaining useful lives.
Foreign exchange contracts used to hedge foreign currency transactions
are initially recognised at exchange rates prevailing on the date of
the contracts. Foreign currency contracts pertaining to acquisition of
capital asset remaining unsettled at the end of the year are translated
at the year end rate and differences between the rates of the contract
and year end rates are added to or deducted from the cost of the assets
and depreciated over the balances of the useful life of the assets and
the premium arising at the inception of such forward contract is
amortised over the life of the contract.
10. Government Grants
Government Grants are accounted for where there is reasonable certainty
that the ultimate collection will be made. Government Grants of the
nature of Project Subsidies are credited to Capital Reserve. Grants
related to specific fixed assets are deducted from the gross value of
the concerned assets in arriving at their book values. Revenue Grants
are credited to Statement of Profit & Loss or deducted from the related
expenses.
11. Borrowing Costs
Interest and other costs connected with borrowings for the acquisition/
construction of qualifying fixed assets are capitalised up to the date
when such assets are ready for their intended use and other borrowing
costs are charged to the Statement of Profit & Loss.
12. Research & Development Expenditure
Revenue expenditure on Research and Development is charged as expenses
under the head "Research and Development" in the year in which it
is incurred. Capital expenditure incurred on equipment and facilities
that are acquired for research and development activities is
capitalised and depreciated according to the policy followed by the
Company.
13. Provisions and Contingent Liabilities/Assets
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimates can be made of the
amounts of the obligations. Contingent liabilities, if material, are
disclosed by way of notes to the accounts. Contingent assets are not
recognised in the financial statements, as they are dependent on the
outcome of legal or other processes.
14 Taxation
Provision for current tax is made in accordance with the provisions of
the Income tax Act, 1961. Deferred tax resulting from "timing
differences" between book and taxable profits for the year is
accounted for using the tax rates and laws that have been enacted or
substantially enacted as on the balance sheet date. Deferred tax assets
are recognised as income and carried forward only to the extent that
there is virtual certainty that the assets will be adjusted in future.
Pursuant to the approval of the shareholders and the Hon'ble
Rajasthan High Court's order dated 30th November, 2007 deferred tax
liabilities from the year 2007-08 and onwards are met from Securities
Premium Account as disclosed in note no. 4.
Mar 31, 2014
1. Accounting Concepts
The financial statements have been prepared in compliance in all
material respects with the accounting standards notified by the
Companies Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. These accounts are prepared on
the historical cost basis and applying the principles of accounting for
a going concern. The accounting policies are consistent with those used
in the previous year.
2. Recognition of Income And Expenditure
Expenses and income are accounted for on an accrual basis. Insurance
and other claims raised by the Company are accounted for when received
and are not material by reference to the total operations.
3. Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost for the purpose of valuation of Raw Materials and Stores and Spare
Parts has been computed on the weighted average method. Cost for the
purpose of valuation of Finished Goods and |V|aterial-in-Process has
been computed on the basis of cost of material, labour and other costs
incurred in bringing the inventories to their present location and
condition. Scrap and Waste have been valued at net realisable value.
4. Investments
Long Term Investments are stated at cost. Provision is made for
diminution, other than temporary in the value of such investments and
for this purpose, the investee company''s assets and estimated future
cash flows are used to determine whether any diminution other than
temporary has taken place. Current Investments are stated at cost or
fair value, whichever is lower, computed category wise.
5. Fixed Assets
(a) Fixed assets are stated at their original cost of
acquisition/installation net of accumulated depreciation, amortisation
and impairment losses, except freehold land which is carried at cost.
Leasehold land is amortised over the lease period.
(b) Capital work in progress is stated at cost (including borrowing
cost where applicable
and adjustment for exchange differences) incurred during the
construction/ installation/ preoperative period relating to items or
projects in progress.
(c) Expenditure during Construction Period is included under Capital
Work-in Progress and allocated to the respective fixed assets on
commencement of commercial production.
6. Impairment of Assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of the cash flow expected to arise from the continuing
use of the asset and its eventual disposal. A provision for impairment
loss is made when the recoverable amount of the asset is lower than the
carrying amount.
7. Depreciation
I. Tangible Assets
Depreciation is provided on the straight line method at the rates and
in the mannerspecified in Schedule XIV to the Companies Act, 1956. The
useful lives of continuous process plants as defined therein have been
assessed technically and depreciation is provided accordingly.
Depreciation on the increase in the value of fixed assets due to
revaluation is computed on the basis of remaining useful life as
estimated by the valuer on the straight line method. Depreciation of
Fixed Assets on the land, which ownership belongs to Kota Super Thermal
Power Station, Kota is amortised over the period of agreement for
extraction of fly ash between the Company and Kota Super Thermal Power
Station.
II. Intangible Assets
(a) fining rights are amortised over the period of the leases.
(b) Computer software is amortised over a period of 5 years.
8. Employee Benefits
(i) Defined Contribution Plan : Employee benefits in the form of
superannuation fund and the state governed provident fund are defined
contribution plan. The contribution under the scheme is recognised
during the period in which the employee renders the related services.
(ii) Defined Benefit Plan: The employees'' gratuity fund and leave
encashment schemes are the Company''s defined benefit plans. The present
value of the obligations under such defined benefit plans is determined
based on actuarial valuations using the Projected Unit Credit l^ethod.
9. Foreign Currency Transactions
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the date of the transactions. Monetary assets
and liabilities in foreign currency outstanding at the close of the
year are converted to Indian currency at exchange rates prevailing at
the year end. The resulting gain or loss (other than for capital
assets) is recognised in the statement of Profit and Loss. The gain or
loss relating to long term monetary items for financing acquisition of
capital assets is adjusted to the acquisition cost of such assets and
depreciated over their remaining useful lives.
Foreign exchange contracts used to hedge foreign currency transactions
are initially recognised at exchange rates prevailing on the date of
the contracts. Foreign currency contracts pertaining to acquisition of
capital asset remaining unsettled at the end of the year are translated
at the year end rate and differences between the rates of the contract
and year end rates are added to or deducted from the cost of the assets
and depreciated over the balances of the useful life of the assets and
the premium arising at the inception of such forward contract is
amortised over the life of the contract.
10. Government Grants
Government Grants are accounted for where there is reasonable certainty
that the ultimate collection will be made. Government Grants of the
nature of Project Subsidies are credited to Capital Reserve. Grants
related to specific fixed assets are deducted from the gross value of
the concerned assets in arriving at their book values. Revenue Grants
are credited to Statement of Profit & Loss or deducted from the related
expenses.
11. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related/ attributed to the acquisition/ construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for their intended use and other borrowing costs are charged
to the Statement of Profit & Loss.
12. Research & Development Expenditure
Revenue expenditure on Research and Development is charged as expenses
under the head "Research and Development" in the year in which it is
incurred. Capital expenditure incurred on equipment and facilities
that are acquired for research and development activities is
capitalised and depreciated according to the policy followed by the
Company.
13. Provisions and Contingent Liabilities/Assets
Provisions in respect of present obligations arising out of past events
are made in the accounts when reliable estimates can be made of the
amounts of the obligations. Contingent liabilities, if material, are
disclosed by way of notes to the accounts. Contingent assets are not
recognised in the financial statements as they are dependent on the
outcome of legal or other processes.
14 Taxation
Provision for current tax is made in accordance with the provisions of
the Income tax Act, 1961. Deferred tax resulting from "timing
differences" between book and taxable profits for the year is accounted
for using the tax rates and laws that have been enacted or
substantially enacted as on the balance sheet date. Deferred tax assets
are recognised as income and carried forward only to the extent that
there is virtual certainty that the assets will be adjusted in future.
Pursuant to the approval of the shareholders and the Hon''ble Rajasthan
High Court''s order dated 30th November, 2007 deferred tax liabilities
from the year 2007-08 and onwards are met from Securities Premium
Account as disclosed in note no. 4.
Mar 31, 2013
1. Accounting Concepts
The financial statements have been prepared in compliance in all
material respects with the accounting standards notified by the
Companies Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. These accounts are prepared on
the historical cost basis and applying the principles of accounting for
a going concern. The accounting policies are consistent with those used
in the previous year.
2. Recognition of income and expenditure Expenses and income are
accounted for on an accrual basis.
3. Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost for the purpose of valuation of Raw Materials and Stores and Spare
Parts has been computed on the weighted average method. Cost for the
purpose of valuation of Finished Goods and Material- in-Process has
been computed on the basis of cost of material, labour and other costs
incurred in bringing the inventories to their present location and
condition. Scrap and Waste have been valued at net realisable value.
4. Investments
Long Term Investments are stated at cost. Provision is made for
diminution, other than temporary in the value of such investments.
Current Investments are stated at cost or fair value, whichever is
lower, computed category wise.
5. Fixed Assets
(a) Fixed assets are stated at their original cost of
acquisition/installation net of accumulated depreciation, amortisation
and impairment losses, except freehold land which is carried at cost.
Leasehold land is amortised over the lease period.
(b) Capital work in progress is stated at cost (including borrowing
cost where applicable and adjustment
for exchange differences) incurred during the construction/
installation/ preoperative period relating to items or projects in
progress.
(c) Expenditure during construction period is included under capital
work in progress and allocated to the respective fixed assets.
6. Impairment of assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of the cash flow expected to arise from the continuing
use of the asset and its eventual disposal. A provision for impairment
loss is made when the recoverable amount of the asset is lower than the
carrying amount.
7. Depreciation
I. Tangible Assets
Depreciation is provided on the straight line method at the rates and
in the manner specified in Schedule XIV to the Companies Act, 1956. The
useful lives of continuous process plants as defined therein have been
assessed technically and depreciation is provided accordingly.
Depreciation on the increase in the value of fixed assets due to
revaluation is computed on the basis of remaining useful life as
estimated by the valuer on the straight line method. Depreciation of
Fixed Assets on land which ownership belongs to KSTPS, Kota is
amortised over the period of agreement for extraction of fly ash
between the Company and.
II. Intangible Assets
(a) Mining rights are amortised over the period of the leases.
(b) Computer software is amortised over a period of 5 years.
8. Employee Benefits
(i) Defined contribution plan : Employee benefits in the form of
superannuation fund and the state governed provident fund are defined
contribution plan. The contribution under the scheme is recognised
during the period in which the employee renders the related services.
(ii) Defined Benefit Plan: The employee''s gratuity fund and leave
encashment schemes are the
Company''s defined benefit plans. The present value of the obligations
under such defined benefit plans is determined based on actuarial
valuations using the Projected Unit Credit Method.
9. Foreign Currency Transactions
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the date of transaction. Monetary assets and
liabilities in foreign currency outstanding at the close of the year
are converted to Indian currency at exchange rates prevailing at the
year end. The resulting gain or loss (other than for capital assets) is
recognised in the statement of Profit and Loss. The gain or loss
relating to long term monetary items for financing acquisition of
capital asset is adjusted to the acquisition cost of such assets and
depreciated over their remaining useful lives.
Foreign exchange contracts used to hedge foreign currency transactions
are initially recognised at exchange rates prevailing on the date of
the contracts. Foreign currency contracts pertaining to acquisition of
capital asset remaining unsettled at the end of the year are translated
at the year end rate and differences between the rates of the contract
and year end rates are added to or deducted from the cost of the assets
and depreciated over the balances of the useful life of the assets and
the premium arising at the inception of such forward contract is
amortised over the life of the contract.
10. Government Grants
Government Grants are accounted for where there is reasonably certainty
that the ultimate collection will be made. Government Grants of the
nature of Project Subsidies are credited to Capital Reserve. Grants
related to specific fixed assets are deducted from the gross value of
the concerned assets in arriving at their book values. Revenue Grants
are credited to Statement of Profit & Loss or deducted from the related
expenses.
11. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related/attributed to the acquisition/ construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for their intended use and other borrowing costs are charged
to the Statement of Profit & Loss.
12. Research & Development Expenditure
Revenue Expenditure on Research and Development is charged as expenses
under the head ''Research and Development in the year in which it is
incurred. Capital expenditure incurred on equipment and facilities that
are acquired for research and development activities is capitalised and
depreciated according to the policy followed by the Company.
13. Provisions and Contingent Liabilities/Assets
Provision in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of the obligations. Contingent liabilities, if material, are
disclosed by way of notes to the accounts. Contingent assets are not
recognised or disclosed in the financial statements.
14 Taxation
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from ''timing differences between book and
taxable profits for the year is accounted for using the tax rates and
laws that have been enacted or substantially enacted as on the balance
sheet date. Deferred tax assets are recognised as income and carried
forward only to the extent that there is virtual certainty that the
assets will be adjusted in future. Pursuant to the approval of the
shareholders and the Hon''ble Rajasthan High Court''s order dated 30th
November, 2007 deferred tax liabilities from the year 2007-08 and
onwards are met from Securities Premium Account as disclosed in note
no. 4.
Mar 31, 2012
1. Accounting Concepts
The financial statements have been prepared in compliance with all
material aspects with the notified accounting standard by the Companies
Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. These accounts are prepared on
the historical cost basis adjusted by revaluation of certain fixed
assets and on the accounting principles of going concern. The
accounting policies are consistent with those used in the previous
year.
2. Recognition of Income and Expenditure Expenses and income
considered payable and receivable respectively are accounted for on
accrual basis.
3. Inventories
Inventories are valued at lower of cost and net realisable value. Cost
for the purpose of valuation of Raw Materials and Stores and Spare
Parts has been computed on weighted average method. Cost for the
purpose of valuation of Finished Goods and Materials-in-Process is
computed on the basis of cost of material, labour and other costs
incurred in bringing the inventories to their present location and
condition. Scrap and Waste have been valued at net realisable value.
4. Investments
Long Term Investments are stated at cost. Provision is made for
diminution, other than temporary in the value of such investments.
Current Investments are stated at cost or fair value, whichever is
lower computed category wise.
5. Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation adjusted by revaluation of certain fixed
assets, net of accumulated depreciation, amortisation and impairment
losses, except freehold land which is carried at cost. Leasehold land
is amortised over the lease period.
6. Expenditure During Construction Period Expenditure during
construction period are included under capital work in progress and the
same is allocated to the respective fixed assets on the completion of
the construction /erection/ installation period.
7. Impairment of Assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of cash flow expected to arise from the continuing use of
the asset and its eventual disposal. The provision for impairment loss
is made when recoverable amount of the asset is lower than the carrying
amount.
8. Depreciation
I. Tangible Assets
Depreciation is provided on the straight line method at the rates and
in the manner specified in Schedule XIV to the Companies Act, 1956.
Continuous process plants as defined therein have been taken on
technical assessment and depreciation is provided accordingly.
Depreciation on increase in value of fixed assets due to revaluation of
fixed assets is computed on the basis of remaining useful life as
estimated by the valuer on straight line method. Depreciation of Fixed
Assets on which ownership belongs to KSTPS, Kota is amortised over the
period of agreement.
II. Intangible Assets
(a) Mining right is amortised over the period of lease.
(b) Computer software is amortised over a period of 5 years.
9. Employee Benefits
(i) Defined contribution plan : Employee benefits in the form of
superannuation fund, state governed provident fund scheme are defined
contribution plan. The contribution under the scheme is recognised
during the period in which the employee renders the related services.
(ii) Defined Benefit Plan: The employees' gratuity fund and leave
encashment schemes are the company's defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation using the Projected Unit Credit Method.
10. Exchange Fluctuation
Foreign Currency transactions are recorded at the rate of exchange
prevailing on the date of transactions. Foreign Currency
Loans/Liabilities are restated at the rates prevailing at the year end.
Exchange differences are adjusted in the Profit & Loss Account.
11. Government Grants
Government Grants are accounted for where there is reasonably certainty
that the ultimate collection will be made. Government Grants of nature
of Project Subsidy are credited to Capital Reserve. Grants related to
specific fixed assets are deducted from the gross value of the
concerned assets in arriving at its book value. Other Revenue Grants
are credited to Profit & Loss Account or deducted from related
expenses.
1 2. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related/ attributed to the acquisition/ construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
13. Research & Development Expenditure
Revenue Expenditure on Research and Development is charged as expenses
under the head "Research and Development" in the year in which it is
incurred. Capital expenditure incurred on equipment and facilities that
are acquired for research and development activities is capitalised and
is depreciated according to the policy followed by the Company.
14. Provisions and Contingent Liabilities/Assets Provision in respect
of present obligations arising out of past events are made in the
accounts when reliable estimate can be made of the amount of the
obligations. Contingent liabilities, if material, are disclosed by way
of notes to accounts. Contingent assets are not recognised or disclosed
in the financial statements.
15 Taxation
Provision for current tax is made after taking into consideration
benefits admissible under the provision 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 substantially enacted as on the balance
sheet date. The deferred tax assets is recognised as income and carried
forward only to the extent there is a virtual certainty that the assets
will be adjusted in future. Pursuant to the approval of the
shareholders and Hon'ble Rajasthan High Court's order dated 30th
November, 2007 deferred tax liabilities from the year 2007-08 and
onwards are met from Securities Premium Account as disclosed in note
no. 8.
Mar 31, 2011
1. Accounting Concepts The financial statements have been prepared in
compliance with all material aspects with the notified accounting
standard by the Companies Accounting Standard Rules, 2006 (as amended)
and the relevant provisions of the Companies Act, 1956. These accounts
are prepared on the historical cost basis adjusted by revaluation of
certain fixed assets and on the accounting principles of going concern.
The accounting policies are consistent with those used in the previous
year.
2. Recognition Of Income And Expenditure Expenses and income
considered payable and receivable respectively are accounted for on
accrual basis.
3. Inventories Inventories are valued at lower of cost and net
realisable value. Cost for the purpose of valuation of Raw Materials
and Stores and Spare Parts has been computed on weighted average
method. Cost for the purpose of valuation of Finished Goods and
Materials-in-Process is computed on the basis of cost of material,
labour and other costs incurred in bringing the inventories to their
present location and condition. Scrap and Waste have been valued at net
realisable value.
4. Investments Long Term Investments are stated at cost. Provision is
made for diminution, other than temporary in the value of such
investments. Current Investments are stated at cost or fair value,
whichever is lower computed category wise.
5. Fixed Assets Fixed assets are stated at their original cost of
acquisition/installation adjusted by revaluation of certain fixed
assets, net of accumulated depreciation, amortization and impairment
losses, except freehold land which is carried at cost. Leasehold land
is amortised over the lease period.
6. Expenditure During Construction Period
Expenditure during construction period are included under capital work
in progress and the same is allocated to the respective fixed assets on
the completion of the construction /erection/installation period.
7. Impairment Of Assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of cash flow expected to arise from the continuing use of
the asset and its eventual disposal. The provision for impairment loss
is made when recoverable amount of the asset is lower than the carrying
amount.
8. Depreciation
I. Tangible Assets
Depreciation is provided on the straight line method at the rates and
in the manner specified in Schedule XIV to the Companies Act, 1956.
Continuous process plants as defined therein have been taken on
technical assessment and depreciation is provided accordingly.
Depreciation on increase in value of fixed assets due to revaluation of
fixed assets is computed on the basis of remaining useful life as
estimated by the valuer on straight line method. Depreciation of Fixed
Assets on which ownership belongs to KSTPS, Kota is amortised over the
period of agreement.
II. Intangible Assets
(a) Mining right is amortized over the period of lease.
(b) Computer software is amortised over a period of 5 years.
9. Employee Benefit
(i) Defined contribution plan:
Employee benefits in the form of superannuation fund, state governed
provident fund scheme are defined contribution plan. The contribution
under the scheme is recognised during the period in which the employee
renders the related services.
(ii) Defined Benefit Plan :
The employees gratuity fund and leave encashment schemes are the
companys defined benefit plan. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the Projected Unit Credit Method.
10. Exchange Fluctuation
Foreign Currency transactions are recorded at the rate of exchange
prevailing on the date of transactions. Foreign Currency
Loans/Liabilities are restated at the rates prevailing at the year end.
Exchange differences are adjusted in the Profit & Loss Account.
11. Government Grants
Government grants are accounted for where there is reasonably certainty
that the ultimate collection will be made. Government grants of the
nature of Project Subsidy are credited to Capital Reserve. Other
Revenue grants are credited to Profit & Loss Account or deducted from
related expenses.
12. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related/attributed to the acquisition/ construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
13. Provisions And Contingent Liabilities/Assets Provision in respect
of present obligations arising out of past events are made in the
accounts when reliable estimate can be made of the amount of the
obligations. Contingent liabilities, if material, are disclosed by way
of notes to accounts. Contingent assets are not recognised or disclosed
in the financial statements.
14 Taxation
Provision for current tax is made after taking into consideration
benefits admissible under the provision 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 substantially enacted as on the balance
sheet date. The deferred tax assets is recognised as income and carried
forward only to the extent there is a virtual certainty that the assets
will
be adjusted in future. Pursuant to the approval of the shareholders and
Honble Rajasthan High Courts order dated 30th November, 2007 deferred
tax liabilities from the year 2007-08 and onwards are met from
Securities Premium Account as disclosed in note no. 5.
Mar 31, 2010
1. Accounting Concepts
The financial statements have been prepared in compliance with all
material aspects with the notified accounting standard by the Companies
Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. These accounts are prepared on
the historical cost basis adjusted by revaluation of certain fixed
assets and on the accounting principles of going concern. The
accounting policies are consistent with those used in the previous
year.
2. Recognition Of Income And Expenditure
Expenses and income considered payable and receivable respectively are
accounted for on accrual basis.
3. Inventories
Inventories are valued at lower of cost and net realisable value. Cost
for the purpose of valuation of Raw Materials and Stores and Spare
Parts has been computed on weighted average method. Cost for the
purpose of valuation of Finished Goods and Materials- in-Process is
computed on the basis of cost of material, labour and other costs
incurred in bringing the inventories to their present location and
condition.
4. Investments
Long Term Investments are stated at cost. Provision is made for
diminution, other than temporary in the value of such investments.
Current Investments are stated at cost or fair value, whichever is
lower computed category wise.
5. Fixed Assets
Fixed assets are stated at their original cost of
acquisition/installation adjusted by revaluation of certain fixed
assets, net of accumulated depreciation, amortization and impairment
losses, except freehold land which is carried at cost.
6. Expenditure During Construction Period
Expenditure during construction period are included under capital work
in progress and the same is allocated to the respective fixed assets on
the completion of the construction/erection/installation period.
7. Impairment Of Assets
The Management periodically assesses using external and internal
sources whether there is any indication that an asset may be impaired.
Impairment of an asset occurs where the carrying value exceeds the
present value of cash flow expected to arise from the continuing use of
the asset and its eventual disposal. The provision for impairment loss
is made when recoverable amount of the asset is lower than the carrying
amount.
8. Depreciation
(i) Tangible Assets
Depreciation is provided on the straight line method at the rates and
in the manner specified in Schedule XIV to the Companies Act, 1956.
Continuous process plants as defined therein have been taken on
technical assessment and depreciation is provided accordingly.
Depreciation on increase in value of fixed assets due to revaluation of
fixed assets is computed on the basis of remaining useful life as
estimated by the valuer on straight line method. Depreciation of Fixed
Assets on which ownership belongs to KSTPS, Kota is amortised over the
period of agreement.
(ii) Intangible Assets
(a) Mining right is amortized over the period of lease.
(b) Computer software is amortised over a period of 5 years.
9. Employee Benefit
(i) Defined contribution plan:
Employee benefits in the form of superannuation fund, state governed
provident fund scheme are defined contribution plan. The contribution
under the scheme is recognised during the period in which the employee
renders the related services.
(ii) Defined Benefit Plan:
The employees gratuity fund and leave encashment schemes are the
companys defined benefit plan. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the Projected Unit Credit Method.
10. Exchange Fluctuation
Foreign Currency transactions are recoded at the rate of exchange
prevailing on the date of transactions. Foreign Currency
Loans/Liabilities are restated at the rates prevailing at the year end.
Exchange differences are adjusted in the Profit & Loss Account.
11. Government Grants
Government grants are accounted for where there is reasonably certainty
that the ultimate collection will be made. Government grants of the
nature of Project Subsidy are credited to Capital Reserve. Other
Revenue grants are credited to Profit & Loss Account or deducted from
related expenses.
12 Bonnwmg Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related/attributed to the acquisition/ construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
13 Provisions And Contingent liabilities Assets
Provision in respect of present obligations arising out of past events
are made in the accounts when reliable estimate can be made of the
amount of the obligations. Contingent liabilities, if material, are
disclosed by way of notes to accounts. Contingent assets are not
recognised or disclosed in the financial statements.
14 Taxation
Provision for current tax is made after taking into consideration
benefits admissible under the provision 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 substantially enacted as on the balance
sheet date. The deferred tax assets is recognised as income and carried
forward only to the extent there is a virtual certainty that the assets
will be adjusted in future. Pursuant to the approval of the
shareholders and Honble Rajasthan High Courts order dated 30th
November, 2007 deferred tax liabilities from the year 2007-08 and
onwards are met from Securities Premium Account as disclosed in note
no. 4.
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