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Accounting Policies of Prism Cement Ltd. Company

Mar 31, 2016

Corporate information

Prism Cement Limited, a Public Limited Company incorporated under the Companies Act, 1956, principally operates in three business segments : Cement, Tile, Bath and Kitchen (TBK) and Ready mixed Concrete (RMC). The equity shares of the Company are listed on the Bombay Stock Exchange and National Stock Exchange.

1.1 Basis of Preparation

The financial statements of the Company are consistently prepared and presented under historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013 (the Act), read together with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. In accordance with first proviso to section 129(1) of the Act and clause 6 of the General Instructions given in Schedule III to the Act, the terms used in these financial statements are in accordance with the Accounting Standards as referred to herein.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act. All the divisions of the Company have normal operating cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of assets and liabilities into current and non- current as required by Schedule III to the Act for preparation of financial statements.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, actual results could differ from these estimates. Differences on account of revision of estimates, actual results and existing estimates are recognised in periods in which the results are known / materialised in accordance with the requirements of the respective accounting standard, as may be applicable.

1.3 Revenue Recognition Sale of Goods

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Income from Services

Revenues from services are recognised as and when services are rendered on proportionate completion method. Income from services does not include Service Tax (ST).

Dividend Income

Dividend income is recognised for when the right to receive is established.

Interest Income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable on Yield To Maturity (YTM) basis.

1.4 Tangible Fixed Assets

Fixed assets are stated at cost less depreciation / amortisation and impairment loss, if any. The cost is inclusive of borrowing costs and incidental expenses incurred during construction period and is net off cenvat credit availed, discount and rebates.

Cost of acquisition of mining land is bifurcated into cost of land and cost of estimated mining reserves. Freehold and Leasehold Land includes mining land. Mines Development expenses comprise of mining infrastructure expenses and overburden removal cost.

Machinery spares, which are specific to particular machinery and whose use is expected to be irregular, are capitalised as Plant & Machinery. Gains and Losses arising from disposal of fixed assets and losses arising from retirement of fixed assets are recognised in the Statement of Profit and Loss.

1.5 Intangible Assets

Intangible assets are recognised only if they are separately identifiable and the Company expects to receive future economic benefits arising out of them. Such assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any.

1.6 Depreciation and Amortisation

i. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life and is provided on a straight-line basis over the useful life as prescribed in Schedule II to the Companies Act, 2013, unless otherwise specified.

ii Depreciable amount for assets is the cost of an asset less its estimated residual value.

iii Depreciation on additions to / deductions from fixed assets is provided on pro-rata basis from / to the date of acquisition / disposal.

iv Useful life of assets individually costing less than Rs. 10,000/- is considered as one year.

v Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets is provided prospectively over the remaining life of the assets.

vi Cost of mining reserve included in freehold / leasehold land, balance cost of leasehold mining land, mining rights and mines development expenses are amortised systematically based on principle of Unit of Production method.

vii In case of certain class of assets and components, the Company uses different useful life than those prescribed in Schedule

II to the Act. In such cases, the useful life has been assessed based on its technical expertise and past experience. The useful life of component of machineries varies from 2 years to 40 years. Details of other class of assets and their estimated useful lives are as under :

1.7 Research and Development

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the Company can demonstrate all the following :

- The technical feasibility of completing the intangible asset so that it will be available for use or sale

- Its intention to complete the asset

- Its ability to use or sell the asset

- How the asset will generate future economic benefits

- The availability of adequate resources to complete the development and to use or sell the asset

- The ability to measure reliably the expenditure attributable to the intangible asset during development.

1.8 Leases

Where the Company is lessee :

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of 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. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

Charges paid under operating lease arrangements, where all the risks and benefits incidental to ownership are retained by the lessor, are charged to Statement of Profit and Loss.

1.9 Impairment of Tangible and Intangible Assets

The carrying amounts of Tangible and Intangible assets are tested for impairment at each Balance Sheet date to determine if there is any indication of impairment, based on internal / external factors. If any such indication exists, an estimate of the recoverable amount of the asset / cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset''s or cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets are reflected at the recoverable amount.

1.10 Investments

Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Long-term investments are carried at cost. Diminution, if any, other than temporary, is provided for. Current investments are carried at lower of cost or fair value.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

1.11 Inventories

Raw materials, fuels, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a moving weighted average basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a moving weighted average basis. Excise duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories and depots as on the Balance Sheet date.

Traded Goods are valued on moving weighted average cost.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.12 Foreign Currency Transactions Initial Recognition

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Statement of Profit and Loss.

Conversion

Foreign currency monetary items are re translated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Forward contracts

Forward contracts are entered into to hedge the foreign currency risk of the underlying out standings. The premium or discount on such contracts is amortised as income or expense over the life of the respective contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period. The difference on account of exchange rate fluctuation is taken to Statement of Profit and Loss.

Synthetic Swap (under forward contracts)

Outstanding forward / future contracts against firm commitments and derivative contracts, other than stated above, are marked to market and the resulting loss, if any, is charged to the Statement of Profit and Loss. Gain, if any, on such marked to market is not recognised unless it is reversal of loss recognised earlier.

Exchange Differences

The Company has availed option provided under paragraph 46A of Accounting Standard 11: ''The Effects of Changes in Foreign Exchange Rates'', vide Notification dated December 29, 2011 issued by MCA. Exchange differences arising on principal amount of borrowings are not considered as borrowing costs and treated as part of exchange difference. Consequently, the exchange differences on long-term foreign currency monetary items, are dealt with in the following manner :

- Foreign exchange differences on long-term borrowings utilised for acquisition of depreciable asset is treated as an adjustment to the cost of depreciable asset and the same is depreciated over the balance useful life of the asset.

- Foreign exchange differences arising from other long-term monetary items are accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of the said asset/liability.

1.13 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or production of qualifying assets are capitalised as the cost of the respective assets. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred.

1.14 Government Grants

VAT subsidy from State Governments is recognised as a part of Sales under Revenue from Operations in the Statement of Profit and Loss on accrual basis i.e. when there is reasonable assurance that the conditions attached to them will be complied and subsidy will be received. The above criteria is also used for recognition of incentives under various scheme notified by the Government.

1.15 Employee Benefits

Superannuation and ESIC are defined contribution plans. Provident Fund is treated as defined contribution plan. A contribution is made to Regional Provident Fund Commissioner for certain employees. In case of other employees covered under the Provident Fund Trust of the Company, the management does not expect any material liability on account of interest shortfall to be borne by the Company. Gratuity benefits are treated as defined benefit plan. Gratuity obligation is worked out based on an actuarial valuation.

Employees are entitled to carry forward unutilised leave, the liability of which is arrived based on an actuarial valuation. Employees are also entitled to medical benefit for which premium is paid by the Company.

The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Statement of Profit and Loss. Incremental liability for leave entitlement and Gratuity is charged to the Statement of Profit and Loss. Actuarial gains / losses are immediately recognised in Statement of Profit and Loss and are not deferred. The current / non current bifurcation of liabilities towards employee benefits is done as per Actuary Report.

1.16 Taxes on Income

a) The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to it.

b) Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognised on timing differences that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. The effect on deferred tax assets and liabilities of change in tax rates is recognised in the Statement of Profit and Loss in the period of enactment of the change.

c) Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period.

1.17 Provision

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management''s estimate for the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current estimates of the management.

1.18 Contingent Liabilities and Contingent Assets

a) Contingent liabilities are disclosed separately by way of note to financial statements after careful evaluation by the management of the facts and legal aspects of the matter involved in case of :

i. a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

ii. a possible obligation, unless the probability of outflow of resources is remote.

b) Contingent Assets are neither recognised nor disclosed.

1.19 Segment Reporting

The Company identifies primary segments based on the products and does not have any secondary segments. The primary segments identified are as follows :

i. Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Ready mixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "Unallocated revenue / expenses / assets / liabilities".

However, segment information has been presented in the Consolidated Financial Statements as permitted by AS-17 on Segment Reporting.

1.20 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of Cash Flow Statement comprise cash at bank, cash / cheques in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less.

1.21 Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, share split, etc., if any that have changed the number of equity shares outstanding, without a corresponding change in resources. In addition, weighted average number of equity shares are net of own shares held through Trust.

b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.22 Expenditure on New Projects

Expenditure (including borrowing costs) directly attributable to setting up / construction of new projects are capitalised. Administrative and other General overhead expenses, which are specifically attributable to the setting up / construction activities, incurred during the construction period are capitalised as part of the indirect cost. Other indirect expenditure (including borrowing costs) incurred during such period which are not related to the setting up / construction activities are charged to Statement of Profit and Loss. Income earned during this period from setting up activities is deducted from the total of indirect expenditure.

1.23 Mines Restoration Expenditure

The Company provides for the estimated expenditure required to restore quarries and mines. The total estimate of restoration expenses is apportioned over the estimate of mineral reserves and a provision is made based on minerals extracted during the year. Mines restoration expenses are incurred on an on going basis and until the closure of the quarries and mines. The actual expenses may vary based on the nature of restoration and the estimate of restoration expenditure. On the basis of technical parameters, restoration expenses estimates are reviewed periodically.


Mar 31, 2015

1 Basis of Preparation

The financial statements of the Company are consistently prepared and presented under historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. In accordance with first proviso to section 129(1) of the Companies Act, 2013 and clause 6 of the General Instructions given in Schedule III to the Companies Act, 2013, the terms used in these financial statements are in accordance with the Accounting Standards as referred to herein.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. All the divisions of the Company have normal operating cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of assets and liabilities into current and non-current as required by Schedule III to the Companies Act, 2013 for preparation of financial statements.

2 Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, actual results could differ from these estimates. Differences on account of revision of estimates, actual results and existing estimates are recognised in periods in which the results are known/materialised in accordance with the requirements of the respective accounting standard, as may be applicable.

3 Revenue Recognition

Sale of goods

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Income from services

Revenues from services are recognised as and when services are rendered on proportionate completion method. Income from services does not include Service Tax (ST).

Dividend Income

Dividend income is recognised for when the right to receive is established.

Interest Income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable on Yield To Maturity (YTM) basis.

4 Tangible Fixed Assets

Fixed assets are stated at cost less depreciation / amortisation and impairment loss, if any. The cost is inclusive of borrowing costs and incidental expenses incurred during construction period and is net off cenvat credit availed, discount and rebates. Cost of acquisition of mining land is bifurcated into cost of land and cost of estimated mining reserves. Freehold and Leasehold Land includes mining land. Mines Development expenses comprise of mining infrastructure expenses and overburden removal cost.

Machinery spares, which are specific to particular machinery and whose use is expected to be irregular, are capitalised as Plant & Machinery. Gains and Losses arising from disposal of fixed assets and losses arising from retirement of fixed assets are recognised in the Statement of Profit and Loss.

5 Intangible assets

Intangible Assets are recognised only if they are separately identifiable and the Company expects to receive future economic benefits arising out of them. Such Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

6 Depreciation and Amortisation

i Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life and is provided on a straight-line basis over the useful life as prescribed in Schedule II to the Companies Act, 2013, unless otherwise specified.

ii Depreciable amount for assets is the cost of an asset less its estimated residual value.

iii Depreciation on additions to / deductions from fixed assets is provided on pro-rata basis from / to the date of acquisition / disposal.

iv Assets costing less than Rs. 10,000/- are fully depreciated in the year of acquisition.

v Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets is provided prospectively over the remaining life of the assets.

vi In case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II to the Companies Act, 2013. Such class of assets and their estimated useful lives are as under :

Assets Cement HRJ RMC

Mobile Phones 1 - 3 years

Motor Cars given to the employees as per the Company's Scheme or Vehicle used by 5 - 6 years Employees.

Leasehold Land and Mining surface rights Remaining period of the Lease

Truck Mixers, Loaders, Excavators and Truck - - 12.50% Dumpers

Mines Development Expenses 5 years from the Over a - month period of of commencement extraction of extraction on the basis of limestone / of Unit of coal from that Production area Method

Intellectual property right - 10.00% -

Technical Know-how - 14.29% -

Leasehold improvements Over the period of lease / rent agreement.

Machinery spares Over the - - useful life of the related assets

Assets acquired under Over the - - the finance lease primary lease period and secondary lease period if renewable at nominal cost, if any

Plant & Machinery- - - 6 years Concrete Pumps

The civil and other - - Over the costs attributable unexpired to the plants / office on leased premises period of the lease

Amortization of Unit of - - mining reserve Method (included in Freehold / Leasehold Land) and Leasehold Land

7 Research and Development

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the Company can demonstrate all the following :

- The technical feasibility of completing the intangible asset so that it will be available for use or sale

- Its intention to complete the asset

- Its ability to use or sell the asset

- How the asset will generate future economic benefits

- The availability of adequate resources to complete the development and to use or sell the asset

- The ability to measure reliably the expenditure attributable to the intangible asset during development.

8 Leases

Where the Company is lessee :

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of 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. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

Charges paid under operating lease arrangements, where all the risks and benefits incidental to ownership are retained by the lessor, are charged to Statement of Profit and Loss.

9 Impairment of tangible and intangible assets

The carrying amounts of Tangible and Intangible assets are tested for impairment at each Balance Sheet date to determine if there is any indication of impairment, based on internal / external factors. If any such indication exists, an estimate of the recoverable amount of the asset / cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset's or cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets are reflected at the recoverable amount.

10 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long - term investments are carried at cost. Diminution, if any, other than temporary, is provided for. Current investments are carried at lower of cost or fair value.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

11 Inventories

Raw materials, fuels, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a moving weighted average basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a moving weighted average basis. Excise duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories and depots as on the Balance Sheet date.

Traded Goods are valued on moving weighted average cost.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

12 Foreign Currency Transactions

Initial Recognition

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Statement of Profit and Loss.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Forward contracts

Forward contracts are entered into to hedge the foreign currency risk of the underlying outstanding at the Balance Sheet date. The premium or discount on such contracts is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period. The difference on account of exchange rate fluctuation is taken to Statement of Profit and Loss.

Synthetic Swap (under forward contracts)

Outstanding forward / future contracts against firm commitments and derivative contracts, other than stated above, are marked to market and the resulting loss, if any, is charged to the Statement of Profit and Loss. Gain, if any, on such marked to market is not recognised unless it is reversal of loss recognised earlier.

Exchange Differences

The Company has availed option provided under paragraph 46A of Accounting Standard 11: 'The Effects of Changes in Foreign Exchange Rates', vide Notification dated December 29, 2011 issued by MCA. Exchange differences arising on principal amount of borrowings are not considered as borrowing costs and treated as part of exchange difference. Consequently, the exchange differences on long-term foreign currency monetary items, are dealt with in the following manner:

- Foreign exchange differences on long term borrowings utilised for acquisition of depreciable asset is treated as an adjustment to the cost of depreciable asset and the same is depreciated over the balance useful life of the asset.

- Foreign exchange differences arising from other long term monetary items are accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of the said asset / liability.

13 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or production of qualifying assets are capitalised as the cost of the respective assets. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred.

14 Government Grants

VAT subsidy from State Governments is recognised as a part of Sales under Revenue from Operations in the Statement of Profit and Loss on accrual basis i.e. when there is reasonable assurance that the conditions attached to them will be complied and subsidy will be received.

15 Employee Benefits

Superannuation and ESIC are defined contribution plans. Provident Fund is treated as defined contribution plan. A contribution is made to Regional Provident Fund Commissioner for certain employees. In case of other employees covered under the Provident Fund Trust of the Company, the management does not expect any material liability on account of interest shortfall to be borne by the Company. Gratuity benefits are treated as defined benefit plan. Gratuity obligation is worked out based on an actuarial valuation.

Employees are entitled to carry forward unutilised leave, the liability of which is arrived based on an actuarial valuation. Employees are also entitled to medical benefit for which premium is paid by Company.

The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Statement of Profit and Loss. Incremental liability for leave entitlement and Gratuity is charged to the Statement of Profit and Loss. Actuarial gains / losses are immediately recognised in Statement of Profit and Loss and are not deferred. The current / non current bifurcation of liabilities towards employee benefits is done as per Actuary Report.

16 Taxes on Income

(a) The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to it.

(b) Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognised on timing differences that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realization in future. The effect on deferred tax assets and liabilities of change in tax rates is recognised in the Statement of Profit and Loss in the period of enactment of the change.

(c) Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period.

17 Provision

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management's estimate for the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current estimates of the management.

18 Contingent Liabilities

(a) Contingent liabilities are disclosed separately by way of note to financial statements after careful evaluation by the management of the facts and legal aspects of the matter involved in case of :

i. a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

ii. a possible obligation, unless the probability of outflow of resources is remote.

(b) Contingent Assets are neither recognised nor disclosed.

19 Segment Reporting

The Company has identified primary segments based on the products and does not have any secondary segments. The primary segments identified are as follows :

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "Unallocated revenue / expenses / assets / liabilities".

However, segment information has been presented in the Consolidated Financial Statements as permitted by AS-17 on Segment Reporting.

20 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of Cash Flow Statement comprise cash at bank, cash / cheques in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less.

21 Earnings Per Share

(a) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, share split, etc., if any that have changed the number of equity shares outstanding, without a corresponding change in resources. In addition, weighted average number of equity shares are net of own shares held through Trust.

(b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

22 Expenditure on New Projects

Expenditure (including borrowing costs) directly attributable to setting up / construction of new projects are capitalised. Administrative and other General overhead expenses, which are specifically attributable to the setting up / construction activities, incurred during the construction period are capitalised as part of the indirect cost. Other indirect expenditure (including borrowing costs) incurred during such period which are not related to the setting up / construction activities are charged to Statement of Profit and Loss. Income earned during this period from setting up activities is deducted from the total of indirect expenditure.

23 Mines Restoration Expenditure

The Company provides for the estimated expenditure required to restore quarries and mines. The total estimate of restoration expenses is apportioned over the estimate of mineral reserves and a provision is made based on minerals extracted during the year. Mines restoration expenses is incurred on an on going basis and until the closure of the quarries and mines. The actual expenses may vary based on the nature of restoration and the estimate of restoration expenditure. The total estimate of restoration expenses is reviewed periodically, on the basis of technical estimates.


Mar 31, 2014

1.1 Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, on the basis of going concern under the historical cost convention and also on accrual basis. These financial statements comply, in all material aspects, with the provisions of the Companies Ac, 1956 and he Companies Ac, 2013 (o he extent applicable) and also accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006, which continue o be applicable in respect of Section 133 of the Companies Ac, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI o he Companies Ac, 1956. All he divisions of the Company have normal operating cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of assets and liabilities into current and non-current as required by Schedule VI to the Companies Act, 1956 for preparation of Financial Statements.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosures relating to contingent liabilities as a he date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences on account of revision of estimates, Actual results and existing estimates are recognised in periods in which he results are known/ materialised in accordance with the requirements of the respective accounting standard, as may be applicable.

1.3 Revenue Recognition

Sale of goods

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Income from services

Revenues from services are recognised as and when services are rendered on proportionate completion method. Income does not include Service Tax.

Dividend income

Dividend income is recognised for when the right to receive is established.

Interest income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and he rate applicable on Yield To Maturity (YTM) basis.

1.4 Tangible Fixed Assets

Fixed assets are sated a cost less depreciation / amortisation and impairment loss, if any. The cost is inclusive of interest and incidental expenses incurred during construction period and is net off cenvat credit availed, discount and rebates.

Cost incurred to purchase mining land is bifurcated into cost of land and cost of estimated mining reserves.

Machinery spares, which are specific to particular machinery and whose use is expected o be irregular, are capitalised and depreciated over the useful life of the related asset.

1.5 Intangible Assets

Intangible Assets are recognised only if they are separately identifiable and he Company expects to receive future economic benefits arising out of them. Such Assets are sated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any.

1.6 Depreciation and Amortisation

i Depreciation on additions to / deductions from fixed assets is provided on portray basis from / to the date of acquisition / disposal.

ii Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets is provided prospectively over the remaining life of the assets.

iii Amortisation of mining reserves is calculated by using Unit of Production Method and he same is charged to Statement of Profit and Loss.

iv Depreciation is provided on straight line method a he rates specified in the Schedule XIV to the Companies Ac, 1956 except in the following cases where the rates are higher than the rates specified.

Cement Division :

a) For certain vehicles and mobiles used by employees : 15.25% and 25% respectively.

b) Expenses on mines development are capitalised and are amortised over at period of five years from the month of commencement of extraction of limestone from that area.

c) Leasehold land and mining surface rights are amortised from the month of commencement of commercial production, over the remaining lease period.

d) Assets acquired under the finance lease is amortised over the primary lease period and secondary lease period if renewable at nominal cost, if any.

a) Cost of acquisition of leasehold land is amortised over the remaining lease period.

b) The civil and other costs attributable to the plans / office on leased premises are capitalised and are being written off over the unexpired period of the lease.

a) Cost of acquisition of leasehold land is amortised over the period of lease.

b) For certain vehicles used by employees : 15.25%.

c) Expenses on mines development are capitalised and amortised over a period of extraction on the basis of Unit of Production Method.

1.7 Research and Development

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the Company can demonstrate all the following :

- The technical feasibility of completing the intangible asset so that it will be available for use or sale;

- Its intention to complete the asset;

- Its ability to use or sell the asset;

- How the asset will generate future economic benefits;

- The availability of adequate resources to complete the development and to use or sell the asset;

- The ability to measure reliably the expenditure attributable to the intangible asset during development.

1.8 Leases

Where the Company is lessee :

Finance leases, which effectively transfer to the Company substantially all he risks and benefits incidental to ownership of he leased item, are capitalised at the inception of the lease term at the lower of the fair value of he leased properly and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve at 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. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

Charges paid under operating lease arrangements, where all he risks and benefits incidental o ownership are retained by the lessor, are charged to Statement of Profit and Loss.

1.9 Impairment of tangible and intangible assets

Fixed assets are tested for impairment if here is any indication of impairment, based on Internal / external factors. Impairment loss, if any, is provided by a charge o Statement of Profit and Loss. If a he Balance Shee date here is an indication ha if a previously assessed impairment loss no longer exists, he recoverable amount is reassessed and he assets are reflected a he recoverable amount.

1.10 Investments

Investments, which are readily realisable and intended to be held for no more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Long term investments are carried a cost. Diminution, if any, other than emporary, is provided for. Current investments are carried at lower of cost or fair value.

On disposal of an investment, he difference between is carrying amount and ne disposal proceeds is charged or credited o the Statement of Profit and Loss.

1.11 Inventories

Raw materials, components, sores and spares are valued a lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are no written down below cost if he finished products in which they will be incorporated are expected o be sold at or above cost. Cost of raw materials, components and sores and spares is determined on a weighted average basis.

Work-in-progress and finished goods are valued a lower of cost and ne realisable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realisable value is he estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.12 Foreign Currency Transactions

Initial Recognition

Transactions in foreign currency are accounted a he exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Statement of Profit and Loss.

Conversion

Foreign currency monetary items are retranslated using he exchange rate prevailing a he reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using he exchange rate at the date of the transaction. Non-monetary items, which are measured a fair value or other similar Valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Forward Contracts

Forward contracts are entered into to hedge he foreign currency risk of the underlying outstanding at the Balance Sheet date. The premium or discount on such contracts is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period. The difference on account of exchange rate fluctuation is taken to Statement of Profit and Loss.

Exchange Differences

The Company has availed option provided under paragraph 46A of Accounting Standard 11 : ''The Effects of Changes in Foreign Exchange Rates'', vide Notification dated December 29, 2011 issued by MCA. Exchange differences arising on principal amount of borrowings are no considered as borrowing costs and treated as part of exchange difference. Consequently, he exchange differences on long-term foreign currency monetary items, are dealt within the following manner :

- Foreign exchange differences on long term borrowings utilised for acquisition of depreciable asset is treated as an adjustment to the cost of depreciable asset and the same is depreciated over the balance useful life of the asset.

- Foreign exchange differences arising from other long term monetary items are accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of the said asset / liability.

1.13 Borrowing Costs

Borrowing costs ha are directly attributable o he acquisition or production of qualifying assets are capitalised as he cost of the respective assets. Other borrowing costs are charged o he Statement of Profit and Loss in the year in which they are incurred.

1.14 Government Grants

VAT subsidy is accounted on accrual basis, based on the entitlement. The said subsidy is considered as a part of sales under Revenue from Operations in the Statement of Profit and Loss.

1.15 Employee Benefits

Superannuation and ESIC are defined contribution plans. Also Provident Fund is treated as defined contribution plan. A contribution is made o Regional Provident Fund Commissioner (RPFC) for certain employees and in case of other employees covered under the Provident Fund Trust of the Company, the management does not expect any material liability on account of interest shortfall to be borne by the Company. Gratuity benefits are treated as defined benefit plan. Gratuity obligation is worked out based on actuarial valuation.

Employees are entitled to carry forward unutilised leave, he liability of which is arrived based on an actuarial Valuation. Employees are also entitled to medical benefit for which premium is paid by the Company.

The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Statement of Profit and Loss. Incremental liability for leave entitlement and gratuity is charged to the Statement of Profit and Loss.

1.16 Taxes on Income

a) The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to it.

b) Deferred tax is calculated at the rates and laws ha have been enacted or substantively enacted as of the Balance Sheet date and is recognised on timing differences ha originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Other deferred tax assets are recognised only to the extent here is a reasonable certainly of realisation in future. The effect on deferred tax assets and liabilities of change in tax rates is recognised in the Statement of Profit & Loss in the period of enactment of the change.

c) Minimum Alternate Tax (MAT) paid in a year is charged to the statement of Profit and Loss as current tax. The Company recognises MAT credit available as an asset only o he extent ha here is convincing evidence ha he Company will pay normal income tax during the specified period.

1.17 Provision

A provision is recognised when an enterprise has a present obligation as a result of pas even and it is probable ha an outflow of resources will be required to steal the obligation in respect of which a reliable estimate can be made. Provisions are no discounted to is present value and are determined based on management''s estimate for the amount required to steal the obligation at the balance shee date. These are reviewed at each balance shee date and adjusted to reflect the current estimates of the management.

1.18 Contingent Liabilities

a) Contingent Liabilities are disclosed separately by way of note to financial statements after careful evaluation by the management of the facts and legal aspects of the matter involved in the case of:

i probable obligation arising from the past even, when it is no probable that an outflow of resources will be required to settle the obligation.

ii possible obligation, unless the probability of out flow of resources is remote.

b) Contingent Assets are neither recognised nor disclosed.

A Contingent Liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

1.19 Segment Reporting

The Company has identified primary segments based on the products and does no have any secondary segments. The primary segments identified are as follows :

i Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Ready-mixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are no allocable to segments on reasonable basis have been included under "Unallocated revenue /expenses/assets/liabilities''.

However, segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard - 17 on Segment Reporting.

1.20 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash a bank, cash / cheques in than, demand deposits with banks and other short-term investments with an original maturity of three months or less.

1.21 Earnings Per Share (EPS)

a) Basic earnings per share are calculated by dividing he net profit or loss for the period attributable to equity shareholders (after deducing preference dividends and attributable axes) by he weighed average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for evens such as bonus issue, share split, etc., if any ha have changed he number of equity shares outstanding, without a corresponding change in resources. In addition, weighted average number of equity shares are ne of own shares held through Trust.

b) For the purpose of calculating diluted earnings per share, he net profit or loss for the period attributable to equity shareholders and he weighed average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2013

1.1 Basis of Preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

1.2 Method of Accounting and Revenue Recognition

Accounts are maintained on an accrual basis and at historical cost.

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Dividend income is recognised for when the right to receive is established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable on Yield To Maturity (YTM) basis.

1.3 Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognised in periods in which the results are known/materialised.

1.4 Fixed Assets

Fixed assets are stated at cost less depreciation/amortisation and impairment loss, if any. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvat credit availed.

The fixed assets are tested for impairment if there is any indication of impairment, based on internal/external factors. Impairment loss, if any, is provided by a charge to Profit and Loss Statement.

Machinery spares, which are specific to a particular machinery and whose use is expected to be irregular, are capitalised and depreciated over the useful life of the related asset.

Assets acquired under lease are treated as operating/finance lease as per the provisions of Accounting Standard - 19 "Leases" issued by the Institute of Chartered Accountants of India.

1.5 Depreciation and Amortisation

i Depreciation on additions to/deductions from fixed assets is being provided on pro-rata basis from/to the date of acquisition/disposal.

ii Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets is provided prospectively over the remaining life of the assets.

iii The cost incurred to purchase mining land is bifurcated into cost of land and cost of estimated mining reserves for the purpose of depreciation. Amortisation of mining reserves is calculated by using Unit of Production Method and the same is charged to Profit and Loss Statement.

iv Depreciation is provided on Straight Line Method at the rates specified in the Schedule XIV to the Companies Act, 1956 except in the following cases where the rates are higher than Schedule XIV of the Companies Act, 1956.

Cement Division :

a. For certain vehicles and mobiles used by employees : 15.25% and 25% respectively.

b. Expenses on mines development are capitalised and are amortised over a period of five years from the month of commencement of extraction of limestone from that area.

c. Leasehold land and mining surface rights are amortised from the month of commencement of commercial production, over the remaining lease period.

d. Assets acquired under the finance lease is amortised over the primary lease period and secondary lease period if renewable at nominal cost, if any.

a. Cost of acquisition of leasehold land is amortised over the remaining period of lease.

b. For certain vehicles used by employees : 15.25%.

c. Expenses on mines development are capitalised and amortised over a period of extraction on the basis of Unit of Production Method.

1.6 Research and Development

Revenue expenditure on research phase is recognised as an expense when it is incurred. Expenditure on development phase is capitalised as per Accounting Standard - 26.

1.7 Investments

Long Term Investments are carried at cost. Diminution, if any, other than temporary, is provided for. Current investments are carried at lower of cost or fair value.

1.8 Inventories

Inventories are valued at lower of cost and net realisable value. They are valued after considering for obsolescence and other losses. The cost is worked out on weighted average basis.

1.9 Foreign Currency Transactions

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Profit and Loss Statement.

Forward contracts are entered into to hedge the foreign currency risk of the underlying outstanding at the Balance Sheet date. The premium or discount on such contracts is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period. The difference on account of exchange rate fluctuation is taken to Profit and Loss Statement.

The Company has availed option provided under paragraph 46A of Accounting Standard - 11 : ''The Effects of Changes in Foreign Exchange Rates'', vide Notification dated December 29, 2011 issued by MCA. Exchange differences arising on principal amount of borrowings are not considered as borrowing costs and treated as part of exchange difference. The exchange differences on long-term foreign currency monetary items, are dealt with in the following manner :

i Foreign exchange differences on long term borrowings utilised for acquisition of depreciable asset is treated as an adjustment to the cost of depreciable asset and the same is depreciated over the balance useful life of the asset.

ii Foreign exchange differences arising from other long term monetary items are accumulated in a Foreign Currency Monetary Item Translation Difference Account, and amortised over the balance period of the said asset/liability.

1.10 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or production of qualifying assets are capitalised as the cost of the respective assets. Other borrowing costs are charged to the Profit and Loss Statement in the year in which they are incurred.

1.11 Government Grants

VAT subsidy is accounted on accrual basis, based on the entitlement. The said subsidy is considered as a part of sales under Revenue from Operations in the Profit and Loss Statement.

1.12 Employee Benefits

Superannuation and ESIC are defined contribution plans. Also Provident Fund is treated as defined contribution plan. A contribution is made to Regional Provident Fund Commissioner (RPFC) for certain employees and in case of other employees covered under the Provident Fund Trust of the Company. The management does not expect any material liability on account of interest shortfall to be borne by the Company in the later case. The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Profit and Loss Statement.

Gratuity benefits are treated as defined benefit plan. Gratuity obligation is worked out based on actuarial valuation. Employees are entitled to carry forward unutilised leave, the liability of which is arrived based on an actuarial valuation. Employees are also entitled to medical benefit for which premium is paid by Company. Incremental liability for leave entitlement and gratuity is charged to the Profit and Loss Statement.

1.13 Taxes on Income

The Company provides current tax based on the provisions of the Income Tax Act applicable to it. Timing differences between book profit and taxable profit is accounted as deferred tax. Deferred Tax Asset, if any, is recognised considering prudence.

1.14 Provision and Contingent Liabilities

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management''s estimate for the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current estimates of the management.

A Contingent Liability is disclosed for other disputed matters, unless the possibility of an outflow of resources embodying the economic benefit is remote.

1.15 Segment Reporting

The Company has identified primary segments based on the products and does not have any secondary segments. The primary segments identified are as follows :

i Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Readymixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "Unallocated revenue/expenses/asset/liabilities".

However, segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard - 17 on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.


Mar 31, 2011

Basis of Preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Method of Accounting and Revenue Recognition

Accounts are maintained on an accrual basis and at historical cost.

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Dividend income is recognised for when the right to receive is established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognised in periods in which the results are known/materialised.

Fixed Assets

Fixed assets are stated at cost less depreciation/amortisation and impairment loss, if any. The cost is inclusive of interest and incidental expenses incurred during construction year and is net of cenvat credit availed.

The fixed assets are tested for impairment if there is any indication of impairment, based on internal/external factors. Impairment loss, if any, is provided by a charge to Profit and Loss Account.

Machinery spares, which are specific to machinery and whose use is expected to be irregular, are capitalised and depreciated over the useful life of the related asset.

Assets acquired under lease are treated as operating/finance lease as per the provisions of Accounting Standard -19 "Leases" issued by the Institute of Chartered Accountants of India.

Depreciation and Amortisation

(i) Depreciation on additions to/deductions from fixed assets is being provided on pro-rata basis from/to the date of acquisition/disposal.

(ii) Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets upto 2005-06 is provided prospectively over the remaining life of the assets.

(iii) Depreciation is provided on straight line method at the rates specified in the Schedule XIV to the Companies Act, 1956 except in the following cases where the rates are higher than Schedule XIV of the Companies Act, 1956.

Cement Division:

a. For certain vehicles used by employees -15.25%.

b. Expenses on mines development are capitalised and are amortised over a period of five years from the month of commencement of extraction of limestone from that area.

c. Leasehold land and mining surface rights are amortised from the month of commencement of commercial production, over the remaining lease period.

d. Assets acquired under the finance lease is amortised over the lease period including renewal at nominal cost, if any.

a. Cost of acquisition of leasehold land is amortised over the remaining lease period.

b. The civil and other costs attributable to the plants/office on leased premises are capitalised and are being written off over the unexpired period of the lease.

HRJ Division IH&R Johnson (India)]:

a. Cost of acquisition of leasehold land is amortised over the period of lease.

b. For certain vehicles used by employees -15.25%.

Research and Development

Revenue expenditure on research phase is recognised as an expense when it is incurred. Expenditure on development phase is capitalised as per Accounting Standard - 26.

Investments

Long Term Investments are carried at cost. Diminution, if any, other than temporary, is provided for Current investments are carried at lower of cost or fair value.

Inventories

Inventories are valued at lower of cost and net realisable value after providing for obsolescence and other losses, wherever considered necessary. The cost is worked out on weighted average basis.

Foreign Currency Transactions

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Profit and Loss Account.

Forward contracts are entered into to hedge the foreign currency risk of the underlying outstanding at the Balance Sheet date. The premium or discount on such contracts is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period.

Borrowing Cost

Borrowing costs that are directly attributable to the acquisition or production of qualifying assets are capitalised as the cost of the respective assets. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

Employee Benefits

Superannuation and ESIC are defined contribution plans. Also Provident Fund is treated as defined contribution plan as contribution is made to Regional Provident Fund Commissioner (RPFC) for certain employees and for other employees there is sufficient surplus available with the Provident Fund Trust. Gratuity benefits are treated as defined benefit plan. Gratuity obligation is worked out based on actuarial valuation.

Employees are entitled to carry forward unutilised leave, the liability of which is arrived based on an actuarial valuation. Employees are also entitled to medical benefit for which premium is paid by Company.

The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Profit and Loss Account. Incremental liability for leave entitlement and gratuity is also charged to the Profit and Loss Account.

Taxes on Income

The Company provides current tax based on the provisions of the Income Tax Act applicable to it. Timing differences between book profit and taxable profit is accounted as deferred tax. Deferred Tax Asset, if any, is recognised considering prudence.

Provision and Contingent Liabilities

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on managements estimate for the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current estimates of the management.

A Contingent Liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

Segment Reporting

The Company has identified primary segments based on the products and does not have any secondary segments. The primary segments identified are as follows :

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "Unallocated revenue/expenses/assets/liabilities".


Mar 31, 2010

Basis of Preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Method of Accounting and Revenue Recognition

Accounts are maintained on an accrual basis and at historical cost.

Sales are recognised on passing of risks and rewards attached to the goods. Sales include excise duty but do not include Value Added Tax (VAT) and Central Sales Tax (CST).

Dividend income is recognised for when the right to receive is established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognised in periods in which the results are known/materialised.

Fixed Assets

Fixed assets are stated at cost less depreciation / amortisation and impairment loss, if any. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvat credit availed.

The fixed assets are tested for impairment if there is any indication of impairment, based on internal/external factors. Impairment loss, if any, is provided by a charge to Profit and Loss Account.

Machinery spares, which are specific to machinery and whose use is expected to be irregular, are capitalised and depreciated over the useful life of the related asset.

Depreciation and Amortisation

(i) Depreciation on additions to / deductions from fixed assets is being provided on pro-rata basis from / to the date of acquisition / disposal.

(ii) Depreciation on foreign exchange differences on borrowings utilised for acquisition of assets upto 2005-06 is provided prospectively over the remaining life of the assets.

(iii) Depreciation is provijded on straight line method at the rates specified in the Schedule XIV to the Companies Act, 1956 except in tlje following cases where the rates are higher than Schedule XIV of the Companies Act, 1956.

Cement Division:

a. For certain vehicles used by employees - 15.25%,

b. Expenses on mines development are capitalised and are amortised over a period of five years from the month of commencement of extraction of limestone from that area.

c. Leasehold land and mining surface rights are amortised from the month of commencement of commercial production, over the remaining lease period.

Investments

Long Term Investments are carried at cost. Diminution, if any, other than temporary, is provided for. Current investments are carried at lower of cost or fair value.

Inventories

Inventories are valued at lower of cost and net realisable value after providing for obsolescence and other losses, wherever considered necessary. The cost is worked out on weighted average basis.

Foreign Currency Transactions

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of the transaction. The exchange differences arising on restatement or on settlement are recognised in the Profit and Loss Account.

Forward contracts are entered into to hedge the foreign currency risk of the underlying outstanding at the Balance Sheet date. The premium or discount on such contracts is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as an income or expense for the period.

Borrowing Cost

Borrowing costs that are directly attributable to the acquisition or production of qualifying assets are capitalised as the cost of the respective assets. Other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

Employee Benefits

Superannuation and ESIC are defined contribution plans. Also Provident Fund is treated as defined contribution plan, on account of the surplus available with the Provident Fund Trust. Gratuity benefits are treated as defined benefit plan. Gratuity liability is provided based on actuarial valuation.

Employees are entitled to carry forward unutilised leave, the liability of which is arrived based on an actuarial valuation. Employees are also entitled to medical benefit for which premium is paid by Company.

The contribution made by the Company for Provident Fund, Superannuation and Medical Premium is charged to the Profit & Loss Account. Incremental liability for leave encashment and gratuity is also charged to the Profit & Loss Account.

Taxes on Income

The Company provides current taxbased on the provisions of the Income Tax Act applicable to it. Timing differences between book profit and taxable profit is accounted as deferred tax. Deferred Tax Asset, if any, is recognised considering prudence.

Provision and Contingent Liabilities

A provision is recognised When an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on managements estimate for the amount required to settlfe the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current estimates of the management.

A Contingent Liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

Segment Reporting

The Company has identified primary segments based on the products and does not have any secondary segments. The primary segments identified are as follows:

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship td> the operating activities of the segment. Revenue, expenses, assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "Unallocated revenue / expenses / assets / liabilities".