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Accounting Policies of OCL India Ltd. Company

Mar 31, 2017

1.1 Property, plant and equipment (PPE) and Capital work in progress (CWIP)

The cost of an item of property, plant and equipment is recognised as an asset if, and only if, (a) it is probabale that future economic benefits associated with the item will flow to the entity; and (b) the cost of the item can be measured reliably. Property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Cost includes expenditure that are directly attributable to the acquisition of the items. In the case of assets acquired out of long term foreign currency borrowings disbursed before 31-03-2016, the exchange differences arising on account of settlement or restatement at the end of reporting period are capitalised and depreciated over the remaining useful life of assets. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company derecognises the replaced part and recognises the new part with its own associated useful life and it is depreciated accordingly. Likewise, when a major inspection/ repair is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria is satisfied. All other repair and maintenance costs are recognised in statement of profit and loss as incurred. The present value of the expected cost for decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

The cost of an item of property, plant and equipment held by the Company as a lessee under a finance lease is determined in accordance with Ind AS 17-Leases.

Capital work-in-progress includes cost of property, plant and equipment under installations / under development at the balance sheet date and are stated at cost less impairment losses, if any. Borrowing cost attributable to the acquisition of qualifying assets are also capitalised.

Property, plant and equipment are eliminated from financial statement, either on disposal or when retired from active use. Losses arising in the case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognised in the statement of profit and loss in the year of such retirement/ disposal.

The Company has elected to measure items of property, plant and equipment on the date of transition to Ind AS i.e. 1st April, 2015 at its fair value and is using that fair value as its deemed cost on that date. Items measured at fair value are plant and machinery, buildings, freehold lands and railway line. Leasehold lands, furniture & fixtures, office equipments and vehicles are carried at their previous GAAP carrying amount which are equivalent to its fair value.

Depreciation is calculated on a straight line basis over the estimated useful life of the assets as specified in Schedule II to the Companies Act, 2013. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item are depreciated separately. Property, plant and equipment which are added or disposed off during the year, depreciation is provided on pro-rata basis. Residual value and useful life of the assets are reveiwed periodically. Leasehold lands are amortised over the period of lease. In the following category of property, plant and equipment the depreciation is provided on technical evaluation of the remaining useful life which is different from the one specified in schedule II of the Companies Act, 2013.

- Plant & Machinery : 2 to 25 years

- Lease hold Land : 90 to 99 years

1.2 Investment Properties

Investment properties comprises freehold lands that are held for capital appreciation and recognized at cost less impairment loss, if any.

Investment properties are derecognised either when they are disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in statement of profit and loss in the period of derecognition.

1.3 Intangible Assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the asset can be measured reliably.

Intangible assets acquired separately are measured initially at cost. Subsequent to initial recognition, intangible assets are stated at cost less accumulated amortisation and accumulated impairment loss, if any.

The useful life of intangible assets are assessed as either finite or indefinite. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least once at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with the finite useful life are amortised over the useful economic life on straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Intangible assets are amortised as follows:

- Computer Software are amortised over 3 to 5 years

- Mining rights including decommissioning assets are amortised over residual economic life estimated as per the mining plan or finite life whichever is lower

Intangible assets with indefinite useful life, if any, are not amortised but tested for impairment annually.

Intangible assets are derecognised either when they have been disposed off or no future economic benefit is expected from its use or disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in statement of profit and loss in the period of derecognition.

Research and Development Expenditure

Expenditure incurred on Research and Development, other than on capital account, is charged to revenue.

1.4 Non current assets held for sale

The non-current asset classified as held for sale are measured at the lower of its carrying amount and fair value less costs to sell.

1.5 Impairment of non-financial assets

As at each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, if any, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

- In the case of an individual asset, at the higher of the fair value less cost to sell and the value in use ; and

- In the case of cash generating unit (a group of asset that generates identified, independent cash flow), at the higher of the cash generating unit’s fair value less cost to sell and the value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discounting rate that reflect the current market assessment of the time value of the money and the risk specific to the asset. In determining fair value less cost of disposal, recent market transaction is taken into account. If no such transaction can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

1.6 Inventories

Inventories are carried in the balance sheet as follows:

Raw materials, stores and spares, packing materials, loose tools are valued at lower of cost (net of cenvat credit) or net realisable value, after providing for obsolescence. For this purpose, cost is determined on FIFO / weighted average basis. Raw materials and other items held for use in production of finished goods are not written down below cost if the finished products in which they will be used are expected to be sold at or above cost.

Stocks of finished goods and work-in-progress are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty.

Stocks of traded goods are valued at lower of cost or net realisable value and for this purpose, cost is determined on FIFO / weighted average basis.

Goods-in-transit are valued at cost.

The cost of inventories comprises all costs of purchase (net of cenvat credit), costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Excise duty is accounted on the basis of both, payments made in respect of goods cleared as also provision made for goods lying in stock. Value of stock includes excise duty payable/ paid on finished goods.

1.7 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprises cash in hand, cash at banks 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 the statement of cash flows, cash and cash equivalents consist of cash in hand, cash at banks and short-term deposits, as defined above, net of outstanding bank overdrafts, if any, as they are considered an integral part of the cash management.

1.8 Foreign Currency Transactions

The Company’s financial statements are presented in Indian Rupee (?) which is also Company’s functional currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rates prevailing on the date of transaction. At each balance sheet date, foreign currency monetary items are reported using the closing exchange rate. Exchange rate differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company’s monetary items at the closing rate are recognised as income or expense in the period in which they arise.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rates prevailing at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are reported using the exchange rates prevailing at the date when fair value is determined.

The gain or loss arising on translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference (i.e. tanslation differences on items whose gain or loss is recognised in other comprehensive income or the statement of profit and loss is also recognised in other comprehensive income or the statement of profit and loss respectively).

In accordance with Ind AS 101, exchange differences arising on long-term foreign currency monetary items related to acquisition of property, plant and equipments (other than land) are capitalised and depreciated over the remaining useful life of such asset. Exchange rate differences arising on other long term foreign currency monetary items are accumulated in the ‘Foreign Currency Monetary Item Translation Difference Account’ and amortised over the remaining life of concerned monetary item.

1.9 Revenue Recognition

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being received.

The specific recognition criteria described below are met before revenue is recognised:

Sale of Goods

Revenue from the sale of goods is recognised when all significant risks and rewards of ownership of the goods are transferred to the buyer, as per the terms of the contract and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Export sales and respective export incentives are accounted for on the basis of date of bill of lading.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment. It excludes sales tax, Value added tax (VAT), trade discounts, rebates and returns but includes excise duty.

Rendering of Services

Revenue from sale of services is recognised as per the terms of the contract with customers based on stage of completion when the outcome of the transactions involving rendering of services can be estimated reliably. In case, the contract outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered and if it is probable that expenses were not recoverable, revenue is not recognised.

Interest Income

Interest income is recognised using the effective interest rate, which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset.

Dividend Income

Revenue is recognised when the right to receive the payment is established by the reporting date.

Other Claims / Receipts

Insurance claims and other receipts, where quantum of accruals cannot be ascertained with reasonable certainty, these receipts are accounted on receipt basis. Royalty for use of Brand name is accounted on the basis of actual sales by the user.

1.10 Government Grants

Grants from government including non-monetary grants at fair value, are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which are intended to compensate. Where the grant relates to an asset including non monetary grants at fair value, it is recognised as deferred income and recognised to income in equal amounts over the expected useful life of the related asset. Where the Company receives non-monetary grants, then the fair value of the non-monetary asset is assessed and both grant and asset are accounted at that fair value.

1.11 Employee Benefits

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 settled wholly before twelve months after the year end, 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.

Post employement benefits:

Defined contribution plans:

Retirement benefits in the form of contribution to Provident fund and Superannuation fund are defined contribution plans. The contributions are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the fund.

Other post-employment benefits such as farewell gift to employees, medical insurance premium to retired staff are also classified as defined contribution plans. The contributions are charged to statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable.

Defined benefit plans:

The Company operates defined benefit plan viz., gratuity. The costs of providing benefits under this plan are determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out for the plan using the projected unit credit method.

Other long-term employee benefits:

The Company’s net obligation in respect of other long - term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. It includes compensation for accumulated absences. The costs of providing benefits are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out using the projected unit credit method. A liability is recognised for the amount not expected to be settled wholly before twelve months after the year end.

1.12 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which it is incurred.

Borrowing costs include interest expense calculated using the effective interest rate method as described in Ind AS 109- Financial Instruments, finance charges in respect of finance leases are recognised in accordance with Ind AS 17- Leases and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

1.13 Leases :

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset even if that right is not explicitly specified in an arrangement.

Company as a Lessee

Finance leases that transfer substantially all of the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the statement of profit and loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by lessor are classified as operating leases. Lease rentals are charged to the statement of profit and loss on straight line basis

Company as a Lessor

The Company has recognised assets held under a finance lease as a receivable at an amount equal to the net investment in the lease. The finance income has been recognised on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

1.14 Earning per share:

Basic earnings per share is calculated by dividing the profit from continuing operations and total profits, both attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

1.15 Income Taxes

Income tax expense represents the sum of the tax currently payable and deferred tax. It is recognised in statement of profit and loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current Tax

Current income tax represents the tax currently payable on the taxable income for the year and any adjustment to the tax in respect of the previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

The carrying amount of deferred tax assets is reveiwed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates ( and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside the statement of profit and loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and liabilities are offset only if:

(i) entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.

Current and deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to items recognised in the Other Comprehensive Income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity, respectively.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal tax during the specified period.

1.16 Provisions, Contingent Liabilities and Contingent Assets General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Decommissioning liability

The Company records a provision for decommissioning costs of the mines for the extraction of materials. Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognised in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

Contingent Liabilities and Assets

Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are not recognised but disclosed in the financial statements when economic inflow is probable.

1.17 Fair Value Measurement:

The Company measures financial instruments, such as, derivatives 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or

(b) In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

1.18 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.

(i) 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.

Financial assets are classified, at initial recognition, in the same manner as described in subsequent measurement.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

(a) Financial assets at amortised cost

(b) Financial assets at fair value through other comprehensive income (FVTOCI)

(c) Financial assets at fair value through profit or loss (FVTPL)

(d) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

(a) Financial assets at amortised cost

A financial asset that meets the following two conditions is measured at amortised cost (net of any write down for impairment) unless the asset is designated at fair value through profit or loss under the fair value option.

(i) Business model test: The objective of the Company’s business model is to hold the financial asset to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realize its fair value changes).

(ii) Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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 in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

(b) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option.

(i) Business model test: The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

(ii) Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(c) Financial assets at fair value through profit or loss (FVTPL)

FVTPL is a residual category for financial assets. Any financial asset, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a financial asset, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’) that would otherwise arise from measuring financial assets and financial liabilities or recognising the gains or losses on them on different bases.

Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

(d) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.

If an equity investment is not held for trading, an irrecoverable election is made at initial recognition to measure it at fair value through other comprehensive income with only dividend income recognised in the statement of profit and loss.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from other comprehensive income to statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s financial statement) when:

(a) The rights to receive cash flows from the asset have expired, or

(b) 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:

(i) the Company has transferred substantially all the risks and rewards of the asset, or

(ii) 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 recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises 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.

Investment in joint ventures and subsidiaries:

The Company has accounted for its investment in joint ventures and subsidiaries at cost.

Impairment of financial assets

The Company applies expected credit losses (ECL) model for measurement and recognition of impairment loss on the following financial assets:

(a) Financial assets measured at amortised cost

(b) Financial assets measured at fair value through other comprehensive income (FVTOCI)

Expected Credit Losses are measured through either 12 month ECL or lifetime ECL and it is assessed as following:

(i) For recognition of impairment loss on financial assets, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in the subsequent period, credit quality of the instrument improves, such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

(ii) Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

The Company follows a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historical observed default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analysed.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

(ii) Financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include loans and borrowings, trade and other payables and derivative financial instruments. Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of profit and 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.

(b) Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in statement of profit and 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.

(c) Financial Guarantee Contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

(iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

(iv) Derivative financial instruments and hedge accounting

The Company enters into derivative contracts to hedge foreign currency risks and interest rate risks. 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. 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 profit or loss, except for the effective portion of cash flow hedges, which is recognised in other comprehensive income and later reclassified to statement of profit and loss when the hedge item affects profit or loss.

1.19 Distribution of dividend to equity shareholders

The Company recognises a liability to make distributions to equity shareholders when the distribution is authorised and the distribution is no longer at the discretion of the Company. The distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

The dividends declared to holders of equity instruments after the reporting period are not recognised as a liability at the end of the reporting period.

1.20 Segment Reporting

The Chief Operational Decision Maker monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements.

The operating segments have been identified on the basis of the nature of products/ services.

(i) Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.

(ii) Expenses that are directly identifiable with/ allocable to segments are considered for determing the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under unallocable expenditure.

(iii) Income which relates to the Company as a whole and not allocable to segments is included in unallocable income.

(iv) Segment result includes margins on inter-segment and sales which are reduced in arriving at the profit before tax of the Company.

(v) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.

Inter- Segment transfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

1.21 Current and Non-current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non current classification.

An asset is current when:

- It is expected to be realised or intended to be sold or consumed in normal operating cycle (twelve months),

- It is held primarily for the purpose of trading,

- It is expected to be realised within twelve months after the reporting period,

Or

- It is cash or cash equivalents 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.

A liability is current when:

- It is expected to be settled in normal operating cycle (twelve months),

- It is held primarily for the purpose of trading,

- It is due to be settled within 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 liabilities are classified as non-current.


Mar 31, 2016

1.1. Accounting Convention

The Financial Statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards notified under relevant provisions of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise.

1.3. Fixed Assets including intangible Assets

Land, Building, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation. Capital Work in Progress & Intangible Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II), Captive Power Plant, Bengal Cement Works & Solar Power Plant provided on reducing balance method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act,2013. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the assets'' economic benefit are consumed. The useful life has been estimated as 3-5 years in case of computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or quoted / fair value whichever is lower.

1.6. Inventories

Stocks of finished goods and work in progress are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / weighted average basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales and respective export incentives are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystallization. Income from services is accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for when the right to receive the same is established.

1.8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to Gratuity Fund and provision for Leave Encashment are made on the basis of actuarial valuation.

1.9. Government Grants and Subsidies:

Grants and subsidies from government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant or subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and recognised to income in equal amounts over the expected useful life of the related asset. Where the Company receives non-monetary grants the asset is accounted on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognised at a nominal value.

1.10. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.11. Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference is recognised in the Statement of Profit and Loss. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalised and depreciated over the remaining useful life of such asset. Exchange Differences arising on other long term foreign currency monetary items are accumulated in the ''Foreign Currency Monetary Item Translation Difference Account'' and amortised over the remaining life of concerned monetary item. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1 .1 2. Leases

Since significant portion of risks and rewards are retained by lessor in respect of assets taken on lease, they are classified as operating lease and the lease rentals are charged off to revenue account.

1.13. Deferred Tax

In accordance with Accounting Standard- AS22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.14. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.15. Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. Disclosure of Contingent Liabilities are made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets are neither recognised nor disclosed in the financial statement.


Mar 31, 2015

1.1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards notified under relevant provisions of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3. Fixed Assets including intangible Assets.

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation. Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II), Captive Power Plant, Bengal Cement Works & Solar Power Plants provided on reducing balance method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act,2013. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 years in case computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or quoted / fair value which ever is lower.

1.6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales and respective export incentives are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8. treatment of employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9. Research and development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.10. Foreign Currency transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1.11. Deferred Tax

In accordance with Accounting Standard- AS22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.13. Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2014

1.1 Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2 Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are ecognised in the period in which they materialise

1.3 Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation.Capital Work in Progress & ntangilbe Assets under development are shown at cost

1.4 Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-ll), Captive Power Plant & Bengal Cement Works is provided on reducing balance method . Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible assets is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 yeaRs in case computer software.

1.5 nvesments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investment are valued at cost or fair value which ever is lower.

1.6 nventories

Stocks of finished and partly finished products are valued at ower of cost or net realisable value and for this purpose, cost s determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7 Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customeRs Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but nclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis Dividend income is accounted for, when the right to receive the same is established.

1.8 Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9 Research and Development

Revenue expenses are charged off in the year in which it s incurred under the natural heads of account. Capital expenditure, when incured is added to the cost of fixed assets.

1.10 Foreign Curency Transactions

Foreign currency transactions are recorded at exchange ate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non- monetary items denominated in foreign currency are valued at the exchange rate prevailng on the date of transaction.

1.11 Defered Tax

n accordance with Accounting Standard-22 ''Taxes on ncome, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of eveRsal in subsequent year.

1.12 mpairment of Asets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount

1.13 Provisions, Contingent Liabiity and Contingent Asets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability s made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement

b) erm/ rights attached to ordinary shares

The Company has issued only one class of ordinary shares having a par value of XII- per share. Each holder of ordinary shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of DirectoRs is subject to the approval of the shareholdeRs in the ensuing Annual General Meeting.

During the year ended 31st March 2014, the amount of dividend per share recognised for disribution to ordinary shareholdeRs is Rs4/- (Previous year: Interim Dividend Rs2.50/- and Final dividend Rs1.50/- per share)

n event of liquidation of the company, the holdeRs of ordinary shares will be entited to receive remaining asets of the company after distribution of all preferential amounts

The distribution will be in proportion to the number of ordinary shares held by the shareholder

The debentures are secured by way of fiRst pari passu charge over fixed assets (present and future) of Cemet Division of the Company except those to Syndicate Bank are additionaly secured by way of fiRst pari-passu charge on Fixed Asets of Refractory Divison of the Company

# Secured by FiRst pari passu charge by way of mortgage and hypothecation over all immovable properties and moveable fixed assets of Cement Division, (both present and future) and further secured by second pari pasu charge on all current assets of the Company.

$ Secured by FiRst charge on fixed assets of the Cement Division of Company, both present and future to be shared pari passu with the provideRs of the other debt and existing lendeRs, further secured by way of second pari pasu charge on current assets of Cement Division.

@ Secured by FiRst rnking ortgage and Hypothecation all immovable & movable, present & future assets related to the Cement Division (excluding Current Assets) to be shared pari passu wih other lendeRs in respect of other debts and existing secured endeRs to the Cement Divison in respect of the existing debt

"Working capital facilities (fund based & non fund based limits) are secured by fiRst pari passu charge over stocks, stores, raw materials, inventories work in progress, finished goods and also book debts bills and moneys receivable of the Company by way of hypothecation. These facilities are further secured by second charge over the fixed assets of the Cement Division of the Company $ BuyeRs credit is secured by subservient charges on moveable fixed asets of cement divison of the company


Mar 31, 2013

1.1 Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2 Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3 Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation.Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4 Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-II) & Captive Power Plant is provided on reducing balance method . Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible assets is measured at cost and amortised so as to reflect the pattern in which the assets economic benefit are consumed. The useful life has been estimated as 3-5 years in case computer software.

1.5 Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary . Current Investment are valued at cost or fair value which ever is lower.

1.6 Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7 Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8 Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9 Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1.10 Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1.11 Deferred Tax

In accordance with Accounting Standard-22 ''Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12 Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds the recoverable amount.

1.13 Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2012

1.1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

1.2. Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

1.3. Fixed Assets including intangible Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31. 12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated amortization Capital Work in Progress & Intangilbe Assets under development are shown at cost.

1.4. Depreciation and Amortisation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works, Clinkerisation Unit at Rajgangpur (Line-ll) & Captive Power Plant is provided on reducing balance method. Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956. An intangible asset is measured at cost and amortised so as to reflect the pattern in which the asset's economic benefits are consumed. The useful life has been estimated as five years in case computer software.

1.5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at cost or fair value which ever is lower.

1.6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

1.7. Revenue Recognition and Accounting for Sales & Services

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export Sales are accounted for on the basis of date of Bill of Lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Income from services are accounted for when becomes due. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

1.8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

1.9. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

1. 10. Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/ liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Statement of Profit and Loss. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Statement of Profit & Loss. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

1. 11. Deferred Tax

In accordance with Accounting Standard-22 Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

1.12. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

1.13. Provisions, Contingent Liability and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made. Contingent Assets neither recognised nor disclosed in the financial statement.


Mar 31, 2011

A) Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

b) Use of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise

c) Fixed Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalised.

d) Depreciation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works and Clinkerisation Unit at Rajgangpur (Line-II) is provided on reducing balance method. Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956.

e) Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary. Current Investments are valued at Cost or Fair Value which ever is lower.

f) Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

g) Revenue Recognition and Accounting for Sales

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

h) Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

i) Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

j) Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Profit and Loss Account. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Profit & Loss Account. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

k) Taxation

Current Tax provision is made on the assessable income at the tax rate applicable to the relevant Assessment Year. The Deferred tax asset and Deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets arising on account of 'Timing Differences' are recognised, only to the extent there is a reasonable certainty of its realisation.

l) Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

m) Provisions and Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.


Mar 31, 2010

1. Accounting Convention

The financial statements are prepared under historical cost convention (except for certain fixed assets which are revalued), on a going concern basis and in accordance with applicable accounting standards prescribed under the Companies (Accounting Standards) Rules, 2006.

2. Use Of Estimates

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise.

3. Fixed Assets

Land, Buildings, Plant and Machinery relating to Cement and Refractory Works acquired/installed upto 31.12.81 were revalued as at 31.12.85. All other fixed assets are shown at cost (net of cenvat). Borrowing costs attributable to the acquisition of qualifying assets and all signifcant costs incidental to the acquisition of assets are capitalised.

4. Depreciation

Depreciation on Plant and Machinery added in Cement & Refractory after 31.12.81 is provided on straight line method and depreciation on all other assets including Kapilas Cement Works and Clinkerisation Unit at Rajgangpur (Line-II) is provided on reducing balance method . Depreciation has been calculated in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956.

5. Investments

Long term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered other than temporary . Current Investment are valued at Cost or Fair Value which ever is lower

6. Inventories

Stocks of finished and partly finished products are valued at lower of cost or net realisable value and for this purpose, cost is determined on absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realisable value after providing for obsolescence. Cost is determined on FIFO / Weighted Average Basis.

7. Revenue Recognition and Accounting for Sales

Revenue from domestic sale of goods is recognised when significant risks and rewards are transferred to the customers. Export sales are accounted for on the basis of date of bill of lading. Sales are net of trade discount and sales tax but inclusive of excise duty. Bonus or penalty linked to operating efficiency of products, where applicable, is accounted for upon crystalization. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

8. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund, Family Pension, Gratuity and Superannuation which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.

9. Research and Development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

10. Foreign Currency Transactions

Foreign currency transactions are recorded at exchange rate prevailing on the date of transaction/ realisation. Current assets/liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the Profit and Loss Account. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e., differences between the exchange rates at the reporting /settlement date and the exchange rate on the date of inception/last reporting date, is recognised in the Profit & Loss Account. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction.

11. Deferred Tax

In accordance with Accounting Standard-22 ‘Taxes on Income, deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

12. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

13. Provisions and Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outfow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.

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