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Accounting Policies of Ramco Industries Ltd. Company

Mar 31, 2016

1. Basis of preparation and presentation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles {“GAAP”} in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2014, prescribed by the Central Government (as amended). However, certain claims are accounted for as and when admitted by the appropriate authorities.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the year, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as at the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, provision for doubtful debts/ advances, future obligations in respect of retirement benefit plans etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

3. Revenue recognition

i. Revenue from sale of goods is recognized when all significant risks and rewards of ownership is transferred to the buyer under the terms of the contract and we retain no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exist regarding the amount of consideration that will be derived from sale of the goods.

Sales exclude excise duty and sales tax.

ii. Industrial Promotion Assistance (IPA) is recognized when the Company’s right to receive the same is established with reasonable certainty.

iii. Other income is accounted on accrual basis as and when the right to receive arises.

iv. Dividend income is accounted in the period in which the right to receive the same is established.

v. Interest income on deposits is recognized at the agreed rate on time proportion basis.

vi. Income from Wind mills:

a. Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The monetary value of the power generated at wind farms that are consumed at factories are not recognized as revenue because it is inter-divisional transfer.

The value of unadjusted units as on the Balance Sheet date has been included under Other Current Assets.

b. Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in Income from Wind power generation.

4. Tangible Fixed assets

Fixed assets are stated at original cost less accumulated depreciation, accumulated amortization and cumulative impairment. Pre-operative expenses including administrative and other general overhead expenses which are specifically attributable to the project, incurred up to the date of commencement of commercial operation are capitalized as a part of the cost of the fixed asset. Gains or losses arising from disposal of fixed assets, measured as the difference between the net disposal proceeds and the carrying amount of such assets, are recognized in the statement of profit and loss.

5. Depreciation

i. Own Assets

Depreciation has been provided based on Straight-line basis as per the useful life prescribed in Schedule II of the Companies Act, 2013

Depreciation on additions/ deductions is calculated pro-rata from / to the month of additions/ deductions.

ii. Leasehold Land

Land acquired under long-term lease is classified under “Tangible assets” and is amortized over the primary lease period

6. Intangible Assets and Amortization

Intangible assets are recognized 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 are amortized over their estimated useful life on Straight-line method as follows:

- Computer Software - Over a period of 5 years

Amortization on impaired assets is adjusted in the future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.

Internally generated software, if any, is not capitalized and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

7. Impairment of assets

As at each Balance Sheet date, the carrying amount of asset is tested for impairment so as to determine:

i. the provision for impairment loss, if any; and

ii. the reversal of impairment loss recognized in previous periods, if any,

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

a) in the case of an individual asset, at the higher of the net selling price and the value in use; and

b) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit’s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life.)

8. Investments

i. All Investments being non-current and non-trade are valued at cost.

ii. The carrying amount of long term investments is determined on an individual investment basis.

iii. As at the balance sheet date, provision for diminution is made to recognize the decline other than temporary, in the value of investments.

iv. The Company discontinues the use of the equity method from the date when its investment ceases to be an Associate and accounted in accordance with Accounting Standard (AS) 13, Accounting for investments. Accordingly, in CFS the carrying amount of the Investment on that date of cessation of Associate is considered as cost.

9. Inventories

i. Raw-materials, stores, spares and packing materials etc. are valued at cost, computed on a moving weighted average basis including the cost incurred in bringing the inventories to their present location and condition or net realizable value whichever is lower.

ii. Work-in-progress is valued at weighted average cost, including the cost of conversion with systematic allocation of production and administration overheads.

iii. Finished goods are valued at cost or net realizable value whichever is lower. Cost includes cost of conversion and other costs incurred in bringing the inventory to their present location and condition including excise duty.

10. Foreign currency transactions and forward contracts

i. The reporting currency of the Company is Indian Rupee.

ii. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate.

iii. The exchange differences on settlement/ restatement are included in pre-operative expenses up to the date of commercial operation and recognized as income or expense thereafter in the period in which they arise.

iv. Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting

Standard (AS) 11 “The Effects of Changes in Foreign Exchange Rates’’. Exchange differences arising on such contracts are recognized in the period in which they arise. Gains and losses arising on account of roll over/cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/cancellation takes place. The premium paid/ received on a foreign currency forward contract is accounted as expenses/income over the period of the contract.

11. Employee Benefits

a. Short-term employee benefits :

Short-term employee benefits viz., Salaries, Wages, are recognized as an expense at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.

b. Post Employment Benefits :

i. Defined Contribution plans:

Contributions to Provident fund and Superannuation fund are recognized as an expense in the profit and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employee’s basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employee’s eligible annual basic salary subject to a maximum of '' 1 Lac per annum and is remitted to “Ramco Industries Limited Superannuation Scheme” administered by trustees and managed by Life Insurance Corporation of India The balance amount, if any, is paid as salary at the option of the company. There are no other obligation other than the above defined contribution plan.

ii. Defined Benefit Plan :

Gratuity:

The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement and death while in employment or on termination of employment of an amount equivalent to 15 Day’s basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes annual contributions to “Ramco Industries Limited Employees Gratuity Fund” administered by Trustees and managed by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the “projected unit credit method”.

Leave Encashment :

The Company has a policy of providing encashment of unveiled leave for its employees. The obligation for the leave encashment is recognized based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized at the present value of the amount payable determined based on actuarial valuation using “projected unit credit method”.

c. Long-term employee benefits :

The obligation for long term employee benefits such as long term compensated absences is recognized in the similar manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

d. Employee Separation Costs :

Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is charged to Profit and Loss Statement in the year of exercise of option by the employee.

12. Lease

Lease rentals are expensed off with reference to the lease terms.

13. Borrowing costs

Specific borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized as part of the cost of those assets as per AS 16. All other borrowing costs are charged to revenue.

14. Research and Development Expenditure

Expenditure on Research & Development of revenue nature incurred by the Company is charged to statement of Profit and Loss account under the respective revenue heads, while those of capital nature are treated as fixed assets, under respective asset heads.

15. Taxes on income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/ appeals.

Minimum Alternate Tax (MAT) credit is recognized as an asset to the extent there is convincing evidence that the company will pay normal income tax during the specified period. When the MAT credit becomes eligible to be recognized as an Asset viz., “MAT credit entitlement”, the same is created by way of credit to the Statement of Profit and loss and shown as “MAT credit Recognition”.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

16. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is possible that there will be an outflow of resources. Un-provided contingent liabilities are disclosed in the accounts by way of notes. Contingent assets are not recognized.

17. Segment Accounting

i. The Company identifies business segment as the primary segment as per AS-17. Under the primary segment, there are three reportable segments viz., Building products, Textile and Power generation from Windmills. These were identified considering the nature of the products, the differing risks and returns. The valuation of inter segment transfers are based on prevailing market prices.

ii. Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include general corporate income and expenses which are not allocated to any business segment.

iii. The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

18. Subsidies and Government Grants

Revenue related grants are recognized on accrual basis wherever there is reasonable certainty and are disclosed under “Revenue from operations”.

Receivables of such grants are shown under “Other current asset”.

Capital related grants is accounted as “Capital Reserve” under Reserves and Surplus upon fulfillment of conditions attached thereto and is not adjusted against Fixed Assets.

Interest Subsidy under Technology Up gradation Fund Scheme (TUF) is credited to the Interest on borrowings under the head “Finance costs”.

19. Earnings Per Share

Earnings per share (EPS) is calculated by taking into account, the net profit after tax, divided by the weighted average number of Equity Shares outstanding as on the Balance Sheet date.

20. Operating cycle for current/non-current classification

Operating cycle for the business activities of the Company is taken as twelve months for classification of its assets and liabilities into current/non-current.


Mar 31, 2015

1. Basis of preparation and presentation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles {"GAAP"} in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2014, prescribed by the Central Government (as amended). However, certain claims are accounted for as and when admitted by the appropriate authorities.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the year, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as at the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, provision for doubtful debts/ advances, future obligations in respect of retirement benefit plans etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

3. Revenue recognition

i. Revenue from sale of goods is recognized when all significant risks and rewards of ownership is transferred to the buyer under the terms of the contract and we retain no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exist regarding the amount of consideration that will be derived from sale of the goods.

Sales exclude excise duty and sales tax.

ii. Industrial Promotion Assistance (IPA) is recognized when the Company''s right to receive the same is established with reasonable certainty.

iii. Other income is accounted on accrual basis as and when the right to receive arises.

iv. Dividend income is accounted in the period in which the right to receive the same is established.

v. Interest income on deposits is recognized at the agreed rate on time proportion basis.

vi. Income from Wind mills:

a. Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The monetary value of the power generated at wind farms that are consumed at factories are not recognised as revenue because it is inter- divisional transfer.

The value of unadjusted units as on the Balance Sheet date has been included under Other Current Assets.

b. Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in Income from Wind power generation.

4. Tangible Fixed assets

Fixed assets are stated at original cost less accumulated depreciation, accumulated amortisation and cumulative impairment.

Pre-operative expenses including administrative and other general overhead expenses which are specifically attributable to the project, incurred up to the date of commencement of commercial operation are capitalized as a part of the cost of the fixed asset.

Gains or losses arising from disposal of fixed assets, measured as the difference between the net disposal proceeds and the carrying amount of such assets, are recognised in the statement of profit and loss.

5. Depreciation

i. Own Assets

Depreciation has been provided based on Straight-line basis as per the useful life prescribed in Schedule II of the Companies Act, 2013.

Depreciation on additions/ deductions is calculated pro-rata from / to the month of additions/ deductions.

ii. Leasehold Land

Land acquired under long-term lease is classified under "tangible assets" and is amortised over the primary lease period.

6. Intangible Assets and Amortisation

Intangible assets are recognized 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 are amortized over their estimated useful life on Straight-line method as follows:

– Computer Software – Over a period of 3 years

Amortisation on impaired assets is adjusted in the future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.

Internally generated software, if any, is not capitalized and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

7. Impairment of assets

As at each Balance Sheet date, the carrying amount of asset is tested for impairment so as to determine:

i. the provision for impairment loss, if any; and

ii. the reversal of impairment loss recognized in previous periods, if any,

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

a) in the case of an individual asset, at the higher of the net selling price and the value in use; and

b) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit''s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life.)

8. Investments

i. All Investments being non-current and non-trade are valued at cost.

ii. The carrying amount of long-term investments is determined on an individual investment basis.

iii. As at the balance sheet date, provision for diminution is made to recognize the decline other than temporary, in the value of investments.

9. Inventories

i. Raw-materials, stores, spares and packing materials etc. are valued at cost, computed on a moving weighted average basis including the cost incurred in bringing the inventories to their present location and condition or net realizable value whichever is lower.

ii. Work-in-progress is valued at weighted average cost, including the cost of conversion with systematic allocation of production and administration overheads.

iii. Finished goods are valued at cost or net realizable value whichever is lower. Cost includes cost of conversion and other costs incurred in bringing the inventory to their present location and condition including excise duty.

10. Foreign currency transactions and forward contracts

i. The reporting currency of the Company is Indian Rupee.

ii. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate.

iii. The exchange differences on settlement/ restatement are included in pre-operative expenses up to the date of commercial operation and recognised as income or expense thereafter in the period in which they arise.

iv. Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates''''. Exchange differences arising on such contracts are recognized in the period in which they arise. Gains and losses arising on account of roll over/cancellation of forward contracts are recognized as income/expenses of the period in which such roll over/cancellation takes place. The premium paid/ received on a foreign currency forward contract is accounted as expenses/income over the period of the contract.

11. Employee Benefits

a. Short-term employee benefits :

Short-term employee benefits viz., Salaries, Wages, are recognized as an expense at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.

b. Post Employment Benefits :

i. Defined Contribution plans :

Contributions to Provident fund and Superannuation fund are recognized as an expense in the profit and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employee''s basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employee''s eligible annual basic salary subject to a maximum of Rs. 1 Lac per annum and is remitted to "Ramco Industries Limited Superannuation Scheme" administered by trustees and managed by Life Insurance Corporation of India. The balance amount, if any, is paid as salary at the option of the company. There are no other obligation other than the above defined contribution plan.

ii. Defined Benefit Plan :

Gratuity:

The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement and death while in employment or on termination of employment of an amount equivalent to 15 Day''s basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes annual contributions to "Ramco Industries Limited Employees Gratuity Fund" administered by Trustees and managed by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the "projected unit credit method".

Leave Encashment :

The Company has a policy of providing encashment of unavailed leave for its employees. The obligation for the leave encashment is recognised based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized at the present value of the amount payable determined based on actuarial valuation using "projected unit credit method".

c. Long-term employee benefits :

The obligation for long-term employee benefits such as long-term compensated absences is recognized in the similar manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

d. Employee Separation Costs :

Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is charged to Profit and Loss Statement in the year of exercise of option by the employee.

12. Lease

Lease rentals are expensed off with reference to the lease terms.

13. Borrowing costs

Specific borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized as part of the cost of those assets as per AS 16. All other borrowing costs are charged to revenue.

14. Research and Development Expenditure

Expenditure on Research & Development of revenue nature incurred by the Company is charged to statement of Profit and Loss account under the respective revenue heads, while those of capital nature are treated as fixed assets, under respective asset heads.

15. Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/ appeals.

Minimum Alternate Ta x (MAT) credit is recognized as an asset to the extent there is convincing evidence that the company will pay normal income tax during the specified period. When the MAT credit becomes eligible to be recognized as an Asset viz., "MAT credit entitlement", the same is created by way of credit to the Statement of Profit and loss and shown as "MAT credit Recognition".

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

16. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is possible that there will be an outflow of resources. Un-provided contingent liabilities are disclosed in the accounts by way of notes. Contingent assets are not recognized.

17. Segment Accounting

i. The Company identifies business segment as the primary segment as per AS-17. Under the primary segment, there are three reportable segments viz., Building products, Textile and Power generation from Windmills. These were identified considering the nature of the products, the differing risks and returns. The valuation of inter segment transfers are based on prevailing market prices.

ii. Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include general corporate income and expenses which are not allocated to any business segment.

iii. The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

18. Subsidies and Government Grants

Revenue related grants are recognised on accrual basis wherever there is reasonable certainty and are disclosed under "Revenue from operations".

Receivables of such grants are shown under "Other current asset".

Capital related grants is accounted as "Capital Reserve" under Reserves and Surplus upon fulfillment of conditions attached thereto and is not adjusted against Fixed Assets.

Interest Subsidy under Technology Up gradation Fund Scheme (TUF) is credited to the Interest on borrowings under the head "Finance costs".

19. Earnings Per Share

Earnings per share (EPS) is calculated by taking into account, the net profit after tax, divided by the weighted average number of Equity Shares outstanding as on the Balance Sheet date.

20. Operating cycle for current/non-current classification

Operating cycle for the business activities of the Company is taken as twelve months for classification of its assets and liabilities into current/non-current.


Mar 31, 2014

1. Basis of preparation and presentation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles {"GAPP"} in compliance with the provisions of the Companies Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006, prescribed by the Central Government (as amended). However, certain claims are accounted for as and when admitted by the appropriate authorities.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the year, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as at the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, provision for doubtful debts/ advances, future obligations in respect of retirement benefit plans etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

3. Revenue recognition

i. Revenue from sale of goods is recognised when all significant risks and rewards of ownership is transferred to the buyer under the terms of the contract and we retain no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exist regarding the amount of consideration that will be derived from sale of the goods.

Sales exclude excise duty and sales tax.

ii. Other income is accounted on accrual basis as and when the right to receive arises.

iii. Dividend income is accounted in the period in which the right to receive the same is established.

iv. Interest income on deposits is recognised at the agreed rate on time proportion basis.

v. Income from Wind mills:

a. Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The value of unadjusted units as on the Balance Sheet date has been included under Other Current Assets.

b. Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in Value of power generated from wind farms.

4. Tangible Fixed assets

Fixed assets are stated at original cost less accumulated depreciation, accumulated amortisation and cumulative impairment.

Pre-operative expenses including administrative and other general overhead expenses which are specifically attributable to the project, incurred up to the date of commencement of commercial operation are capitalised as a part of the cost of the fixed asset.

Gains or losses arising from disposal of fixed assets, measured as the difference between the net disposal proceeds and the carrying amount of such assets, are recognised in the statement of profit and loss.

5. Depreciation

i. Owned Assets

Depreciation is provided under straight line method at the rates prescribed in Schedule XIV of the Companies Act, 1956, in respect of Fibre Cement Sheet Plants at Arakkonam, Karur, Maksi, Silvassa, Corporate Office and Textiles Division.

Depreciation is provided under written down value method at the rates prescribed in Schedule XIV of the Companies Act, 1956, in respect of Fibre Cement Sheet Plants at Kharagpur, Vijayawada, Bhuj, Gangaikondan, Bihiya, Calcium Silicate Board Plants at Arakkonam and Jaipur, Clinker Cement Grinding unit at Kharagpur and Wind Electric Generators.

Depreciation on additions/deductions is calculated pro-rata from/ to the month of additions/deductions. Assets costing less than Rs. 5,000/- each are fully depreciated in the year of purchase.

Depreciation charge for impaired assets is adjusted in the future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.

ii. Leasehold Land

Land acquired under long-term lease is classified under "tangible assets" and is amortised over the primary lease period

6. Intangible Assets and Amortisation

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 are amortised under straight line method as follows:

Amortisation on impaired assets is adjusted in the future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.

Internally generated software, if any, is not capitalised and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

7. Impairment of assets

As at each Balance Sheet date, the carrying amount of asset is tested for impairment so as to determine:

a) the provision for impairment loss, if any; and

b) the reversal of impairment loss recognised in previous periods, if any,

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:

a) in the case of an individual asset, at the higher of the net selling price and the value in use; and

b) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit''s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life.)

8. Investments

All Investments being non-current and non-trade are valued at cost. Provision for diminution is made to recognise the decline other than temporary, in the value of investments.

9. Inventories

a) Raw-materials, stores, spares and packing materials etc. are valued at cost, computed on a moving weighted average basis including the cost incurred in bringing the inventories to their present location and condition or net realisable value whichever is lower.

b) Work-in-progress is valued at weighted average cost, including the cost of conversion with systematic allocation of production and administration overheads.

c) Finished goods are valued at cost or net realisable value whichever is lower. Cost includes cost of conversion and other costs incurred in bringing the inventory to their present location and condition including excise duty.

10. Foreign currency transactions and forward contracts

i. The reporting currency of the Company is Indian Rupee.

ii. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. I

iii. The exchange differences on settlement/ restatement are included in pre-operative expenses up to the date of commercial operation and recognised as income or expense thereafter in the period in which they arise.

iv. Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates". Exchange differences arising on such contracts are recognised in the period in which they arise. Gains and losses arising on account of roll over/cancellation of forward contracts are recognised as income/expenses of the period in which such roll over/cancellation takes place. The premium paid/ received on a foreign currency forward contract is accounted as expenses/income over the period of the contract.

11. Employee Benefits

a. Short-term employee benefits :

Short-term employee benefits viz., Salaries, Wages etc., are recognised as an expense at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.

b. Post Employment Benefits :

i. Defined Contribution plans

Contributions to Provident fund and Superannuation fund are recognised as an expense in the profit and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employee''s basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employee''s eligible annual basic salary subject to a maximum of Rs. 1 lakh per annum to LIC. There are no other obligations other than the above defined contribution plans.

ii. Defined Benefit Plan :

Gratuity:

The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement and death while in employment or on termination of employment of an amount equivalent to 15 Day''s basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes annual contributions to funds administered by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the "projected unit credit method".

Leave Encashment:

The Company has a policy of providing encashment of unavailed leave for its employees. The obligation for the leave encashment is recognised based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognised at the present value of the amount payable determined based on actuarial valuation using "projected unit credit method".

c. Long-term employee benefits :

The obligation for Long-term employee benefits such as Long-term compensated absences is recognised in the similar manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

12. Lease

Lease rentals are expensed off with reference to the lease terms.

13. Borrowing costs

Specific borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalised as part of the cost of those assets as per AS 16. All other borrowing costs are charged to revenue.

14. Research and Development Expenditure

Expenditure on Research and Development of revenue nature incurred by the Company is charged to statement of Profit and Loss account under the respective revenue heads, while those of capital nature are treated as fixed assets, under respective asset heads.

15. Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/ appeals.

Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses are recognised and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

16. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is possible that there will be an outflow of resources. Un-provided contingent liabilities are disclosed in the accounts by way of notes. Contingent assets are not recognised.

17. Segment Accounting

i. The Company identifies business segment as the primary segment as per AS-17. Under the primary segment, there are three reportable segments viz., Building products, Textile and Power generation from Windmills. These were identified considering the nature of the products, the differing risks and returns. The valuation of inter segment transfers are based on prevailing market prices.

ii. Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include general corporate income and expenses which are not allocated to any business segment.

iii. The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

18. Subsidies and Government Grants

Revenue related grants are recognised on accrual basis wherever there is reasonable certainty. Investment Subsidy/Grant received/ receivable from the Government is treated as Capital Reserve or Revenue receipt based on the nature of subsidy/grant as per AS 12.

Interest Subsidy under Technology Upgradation Fund Scheme (TUF) is credited to the Interest and Finance Charges.

19. Earnings Per Share

Earnings per share (EPS) is calculated by taking into account, the net profit after tax, divided by the weighted average number of Equity Shares outstanding as on the Balance Sheet date.

20. Operating cycle for current/non-current classification

Operating cycle for the business activities of the Company is taken as twelve months for classification of its assets and liabilities into current/non-current.


Mar 31, 2013

A. Basis of preparation of f inancial statements

1. The Company generally follows mercantile system of accounting and recognizes signifi cant items of Income and Expenditure on accrual basis.

2. The fi nancial statements are prepared under the Historical Cost convention and the accounts are prepared in accordance with the generally accepted accounting principles, the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. Employee Benef its

1. Short-term employee benefi ts viz., Salaries, Wages, are recognized as an expense at the undiscounted amount in the profi t and loss account for the year in which the related service is rendered.

2. Defi ned Contribution plan viz., Contributions to Provident fund and Superannuation fund are recognized as an expense in the profi t and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employee''s basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employee''s eligible annual basic salary subject to a maximum of Rs..1 Lac per annum to LIC. There are no other obligations other than the above defi ned contribution plans.

3. Defi ned Benefi t Plan:

Gratuity:

The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement and death while in employment or on termination of employment of an amount equivalent to 15 Day''s basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes annual contributions to funds administered by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the "projected unit credit method".

Leave Encashment:

The Company has a policy of providing encashment of unavailed leave for its employees. The obligation for the leave encashment is recognised based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized at the present value of the amount payable determined based on actuarial valuation using "projected unit credit method".

C. Tangible Assets

1. Tangible Fixed Assets are stated at cost of acquisition (net of CENVAT / VAT wherever applicable) less accumulated depreciation / amortisation and impairment losses if any, except freehold land which is carried at cost less impairment losses if any. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of fi xed asset is added to its book value only if it increases the future benefi ts from the asset beyond its previously assessed standard of performance. All other expenses on fi xed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profi t and loss for the period during which such expenses are incurred.

2. The lands acquired under lease are amortized equally over the lease period and such amount is included in depreciation.

3. Depreciation is provided under Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act 1956, in respect of Fibre Cement Sheet Plants at Arakonam, Karur, Maksi, Silvassa and Corporate Offi ce and Textiles Division.

4. Depreciation is provided under Written Down Value Method at the rates prescribed in Schedule XIV of the Companies Act 1956, in respect of Fibre Cement Sheet Plants at Kharagpur, Vijayawada, Bhuj, Gangaikondan & Bihiya, Calcium Silicate Board Plant at Arakonam, Clinker Grinding unit at Kharagpur and Wind Electric Generators.

5. Gains or losses arising from disposal of fi xed assets are measured as the difference between the net disposal proceeds and the carrying amount of such assets are recognised in the statement of profi t and loss.

D. Intangible Assets

The costs of computer software that are installed are accounted at cost for acquisition of such software and are carried at cost less accumulated amortisation and impairment, if any. Internally generated software is not capitalized and the expenditure is refl ected in the statement of profi t and loss in the year in which the expenditure is incurred.

E. Valuation of Inventories

1. Raw-materials, stores, spares and packing materials are valued at cost, including the cost incurred in bringing the inventories to their present location and condition or net realizable value whichever is lower.

2. Process Stock is valued at cost including the cost of conversion. The cost of conversion includes direct costs, including a systematic allocation of production and administration overheads.

3. Finished goods are valued at cost or net realizable value whichever is lower. Cost includes cost of conversion and other costs ncurred in bringing the inventory to its present location and condition. In accordance with the Accounting Standard (AS-2) excise duty have been included in the valuation. This has no impact on the profi ts.

F. Revenue recognition

1. Revenue is recognised to the extent that is probable that the economic benefi ts will fl ow to the Company and the revenue can be reliably measured.

2. Sale of products is recognised when the signifi cant risks and rewards of ownership of the goods have been passed to the buyer.

3. Revenue from operation exclude Excise duty, Education Cess, Secondary and Higher Education Cess, VAT and CST.

4. Dividend income is recognised when the Company''s right to receive dividend is established by the reporting date.

5. Income from Wind mills:

a. Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The value of unadjusted units as on the Balance Sheet date has been included under Other Current Assets.

b. Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in Value of power generated from wind farms.

G. Investments

All Investments being non-current and non-trade are valued at cost. Provision for dimunition is made to recognize the decline other than temporary, in the value of investments.

H. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is possible that there will be an outfl ow of resources. Un-provided contingent liabilities are disclosed in the accounts by way of notes. Contingent assets are not recognized.

I. Research and Development Expenditure

Expenditure on Research & Development of revenue nature incurred by the Company is charged to statement of Profi t and Loss account under the respective revenue heads, while those of capital nature are treated as fi xed assets, under respective asset heads.

J. Lease

Lease rentals are expensed off with reference to the lease terms.

K. Borrowing Costs

Specifi c borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized as part of the cost of those assets as per AS 16. All other borrowing costs are charged to revenue.

L. Earnings per Share

Earnings per share (EPS) is calculated by taking into account, the net profi t after tax, divided by the weighted average number of Equity Shares outstanding as on the Balance Sheet date.

M. Tax on Income

The tax provision is considered as stipulated in AS 22 (Accounting for taxes on income) and includes both current and deferred tax The Company recognizes the deferred tax liability based on the accumulated timing difference using the current tax rate

N. Foreign Currency Transactions

1. Transactions in foreign currency are accounted at the exchange rates prevailing at the time of transactions

2. Covered liabilities in foreign currencies are accounted at the rate at which they have been covered. Uncovered liabilities in foreign currency are accounted at the rates as on the balance sheet date

3. The difference between forward rate and exchange rate at the inception of a forward exchange contract is recognized as ncome or expenses over the life of the contract

4. Exchange difference in respect of uncovered foreign currency liabilities are recognized in the profi t and loss account.

O. Segment Reporting

1. The Company identifi es business segment as the primary segment as per AS-17. Under the primary segment, there are three reportable segments viz., Building products, Textile and Power generation from Windmills. These were identifi ed considering the nature of the products, the differing risks and returns. The valuation of inter segment transfers are based on prevailing market prices

2. Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include general corporate income and expenses which are not allocated to any business segment.

3. The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the fi nancial statements of the Company as a whole

P. Subsidies and Government Grants

Revenue related grants are recognised on accrual basis wherever there is reasonable certainty. Investment Subsidy/Grant received/ receivable from the Government is treated as Capital Reserve or Revenue receipt based on the nature of subsidy/grant as per AS 12 nterest Subsidy under Technology Upgradation Fund Scheme (TUF) is credited to the Interest and Finance Charges

Q. Impairment of assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profi t and loss in the year in which an asset is identifi ed as impaired

R. Use of Estimates

The preparation of fi nancial statements in accordance with the generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates in the future periods


Mar 31, 2012

A. Basis of preparation of financial statements

1. The Company generally follows mercantile system of accounting and recognizes significant items of Income and Expenditure on accrual basis.

2. The financial statements are prepared under the Historical Cost convention and the accounts are prepared in accordance with the generally accepted accounting principles, the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company.

3. From the beginning of the reporting period, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the company, for preparation and presentation of its financial statements which has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. Current year and previous year figures have been reported in Lakhs with two decimals.

B. Employee Benefits

1. Short-term employee benefits viz., Salaries, Wages are recognized as an expense at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.

2. Defined Contribution plan viz., Contributions to Provident fund and Superannuation fund are recognized as an expense in the profit and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employee's basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employee's eligible annual basic salary subject to a maximum of Rs 1 Lac per annum to LIC. There are no other obligations other than the above defined contribution plans.

3. Defined Benefit Plan:

Gratuity:

The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement and death while in employment or on termination of employment of an amount equivalent to 15 day's basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The company makes annual contributions to funds administered by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the projected unit credit method.

Leave Encashment:

The Company has a policy of providing encashment of unveiled leave for its employees. The obligation for the leave encashment is recognized based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized at the present value of the amount payable determined based on actuarial valuation using projected unit credit method.

C. Tangible Assets

1. Tangible Fixed Assets are stated at cost of acquisition (net of CENVAT / VAT wherever applicable) less accumulated depreciation / amortization and impairment losses if any, except freehold land which is carried at cost less impairment losses if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the asset beyond its previously assessed standard of performance. All other expenses on fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

2. The lands acquired under lease are amortized equally over the lease period and such amount is included in depreciation.

3. Under Straight Line Method in respect of Fibre Cement Sheet Plants at Arakonam, Karur, Maksi, Silvassa and Corporate Office and Textiles Division.

4. Under Written Down Value Method in respect of Fibre Cement Sheet Plants at Kharagpur, Vijayawada, Bhuj, Gangaikondan & Bihiya, Calcium Silicate Board Plant at Arakonam, Plastic Storage Container units at Silvassa and Maksi, Clinker Grinding unit at Kharagpur and Wind Electric Generators.

5. Gains or losses arising from disposal of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of such assets are recognized in the statement of profit and loss.

D. Intangible Assets

The costs of computer software that are installed are accounted at cost for acquisition of such software and are carried at cost less accumulated amortization and impairment, if any. Internally generated software is not capitalized and the expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

E. Valuation of Inventories

1. Raw-materials, stores, spares and packing materials are valued at cost, including the cost incurred in bringing the inventories to their present location and condition or net realizable value whichever is lower.

2. Process Stock is valued at cost including the cost of conversion. The cost of conversion includes direct costs, including a systematic allocation of production and administration overheads.

3. Finished goods are valued at cost or net realizable value whichever is lower. Cost includes cost of conversion and other costs incurred in bringing the inventory to its present location and condition. In accordance with the Accounting Standard (AS-2) excise duty have been included in the valuation. This has no impact on the profits.

F. Revenue recognition

1. Revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

2. Sale of products is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer.

3. Revenue from operation exclude Excise duty, Education Cess, Secondary and Higher education cess, VAT and CST.

4. Dividend income is recognized when the company's right to receive dividend is established by the reporting date.

5. Income from Wind mills:

a. Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The monetary value of the units so adjusted, calculated at the prevailing EB rates net of wheeling charges has been included in power & fuel. The value of unadjusted units as on the Balance Sheet date has been included under loans and advances.

b. Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in value of power generated from wind farms.

G. Investments

All Investments being non-current and non-trade are valued at cost. Provision for diminution is made to recognize the decline other than temporary, in the value of investments.

H. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is possible that there will be an outflow of resources. Un-provided contingent liabilities are disclosed in the accounts by way of notes. Contingent assets are not recognized.

I. Research and Development Expenditure

Expenditure on Research & Development of revenue nature incurred by the Company is charged to statement of Profit and Loss account under the respective revenue heads, while those of capital nature are treated as fixed assets, under respective asset heads.

J. Lease

Lease rentals are expensed off with reference to the lease terms.

K. Borrowing Costs

Specific borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized as part of the cost of those assets as per AS 16. All other borrowing costs are charged to revenue.

L. Earnings per Share

Earnings per share (EPS) is calculated by taking into account, the net profit after tax, divided by the number of Equity Shares outstanding as on the Balance Sheet date.

M. Tax on Income

The tax provision is considered as stipulated in AS 22 (Accounting for taxes on income) and includes both current and deferred tax liability. The company recognizes the deferred tax liability based on the accumulated timing difference using the current tax rate.

N. Foreign Currency Transactions

1. Transactions in foreign currency are accounted at the exchange rates prevailing at the time of transactions.

2. Covered liabilities in foreign currencies are accounted at the rate at which they have been covered. Uncovered liabilities in foreign currency are accounted at the rates as on the balance sheet date.

3. The difference between forward rate and exchange rate at the inception of a forward exchange contract is recognized as income or expenses over the life of the contract.

4. Exchange difference in respect of uncovered foreign currency liabilities are recognized in the profit and loss account.

O. Segment Reporting

1. The company identifies business segment as the primary segment as per AS-17. Under the primary segment, there are three reportable segments viz., Building products, Textile and Power generation from Windmills. These were identified considering the nature of the products, the differing risks and returns. The valuation of inter segment transfers are based on prevailing market prices.

2. Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include general corporate income and expenses which are not allocated to any business segment.

3. The company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

P. Subsidies and Government Grants:

Revenue related grants are recognized on accrual basis wherever there is reasonable certainty. Investment Subsidy/Grant received/ receivable from the Government is treated as Capital Reserve or Revenue receipt based on the nature of subsidy/grant as per AS 12.

Interest Subsidy under Technology Up gradation Fund Scheme (TUF) is credited to the Interest and Finance Charges.

Q. Impairment of assets

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired.

R. Use of Estimates

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


Mar 31, 2011

A Basis of preparation of financial statements

1 The Company generally follows mercantile system of accounting and recognizes significant items of Income and Expenditure on accrual basis.

2 The financial statements are prepared under the Historical Cost convention and the accounts are prepared in accordance with the generally accepted accounting principles, the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company.

B Sales

Net Sales exclude Excise Duty, Secondary and Higher Education Cess and VAT/CST.

C Employee Benefits

1 Short-term employee benefits viz., Salaries, Wages, are recognized as an expense at the undiscounted amount in the profit and loss account for the year in which the related service is rendered.

2 Defined Contribution plan viz., Contributions to Provident fund and Superannuation fund are recognized as an expense in the profit and loss account for the year in which the employees have rendered services. The Company contributes to Provident fund administered by the Government on a monthly basis at 12% of employees basic salary. The Company also contributes for superannuation a sum equivalent to 15% of the employees eligible annual basic salary subject to a maximum of Rs.1 Lac per annum to funds administered by trustees and managed by LIC. There are no other obligations other than the above defined contribution plans.

3 Defined Benefit Plan:

Gratuity:The Company has its own approved Gratuity Fund. It is in the form of lump sum payments to vested employees on resignation, retirement, death while in employment or on termination of employment of an amount equivalent to 15 Days basic salary payable for each completed year of service. Vesting occurs upon completion of 5 years of continuous service. The Company makes annual contributions to funds administered by Trustees and managed by Life Insurance Corporation of India, based on the Actuarial Valuation by an independent external actuary as at the Balance sheet date using the projected unit credit method.

Leave Encashment: The Company has a policy of encashing unavailed leave for its employees. The obligation for the leave encashment is recognised based on an independent external actuarial valuation at the Balance Sheet date. The expense is recognized at the present value of the amount payable determined based on actuarial valuation using projected unit credit method.

D Fixed Assets:

Fixed Assets are accounted at acquisition cost (net of CENVAT / VAT wherever applicable) less accumulated depreciation. Depreciation has been provided at the rates specified under rules / Schedule XIV to the Companies Act 1956 at the time of acquisition of the asset:

Under Straight Line Method in respect of Fibre Cement Sheet Plants at Arakkonam, Karur, Maksi, Silvassa and Corporate Office and Textiles Division.

Under Written Down Value Method in respect of Fibre Cement Sheet Plants at Kharagpur, Vijayawada, Bhuj & Gangaikondan, Calcium Silicate Board Plant at Arakkonam, Plastic Storage Container units at Silvassa and Maksi, Clinker Grinding unit at Kharagpur and Wind Electric Generators.

The land acquired under lease are amortized equally over the lease period and such amount is included in depreciation.

E Valuation of Inventories:-

1 Raw-materials, stores, spares and packing materials are valued at cost, computed on a moving weighted average basis except Fibre, which is valued at lot basis, including the cost incurred in bringing the inventories to their present location and condition or net realizable value whichever is lower.

2 Process Stock is valued at cost including the cost of conversion. The cost of conversion includes direct costs, including a systematic allocation of production and administration overheads.

3 Finished goods are valued at cost or net realizable value whichever is lower. Cost includes cost of conversion and other costs incurred in bringing the inventory to its present location and condition. In accordance with the Accounting Standard (AS-2) excise and customs duty have been included in the valuation. This has no impact on the profits.

F Investments

All Investments being long term and non-trade are valued at cost. Provision for diminution is made to recognize the decline

other than temporary, in the value of investments.

G Contingent Liabilities

Provisions including substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is possible that there will be an outflow of resources. Un-provided contingent liabilities disclosed in the accounts by way of notes. Contingent assets are not recognized.

H Research and Development Expenditure

Expenditure on Research & Development of revenue nature incurred by the Company is charged to Profit and Loss account under the respective revenue heads, while those of capital nature are treated as fixed assets.

I Income from Windmill

1 Under wheeling and banking arrangement:

Units generated from windmills are adjusted against the consumption of power at our factories. The monetary value of the units so adjusted, calculated at the prevailing EB rates net of wheeling charges has been included in Power & Fuel. The value of unadjusted units as on the Balance Sheet date has been included under Loans and Advances.

2 Under Power purchase agreement:

Units generated from windmills are sold to State Electricity Board at agreed rates and the income is included in Value of power generated from wind farms. J Lease

Lease rentals are expensed off with reference to the lease terms. K Borrowing Costs

Specific borrowing costs that are directly attributable to the acquisition and construction of qualifying assets are capitalized as part of the cost of those assets as per AS 16. All other borrowing cost are charged to revenue. L Earnings per Share

Earnings per share (EPS) is calculated by taking into account, the net profit after tax, divided by the number of Equity Shares outstanding as on the Balance Sheet date.

M Income Tax

The tax provision is considered as stipulated in AS 22 (Accounting for taxes on income) and includes both current and deferred tax liability. The Company recognizes the deferred tax liability based on the accumulated timing difference using the current tax rate.

N Foreign Currency Transactions

1. Transactions in foreign currency are accounted at the exchange rates prevailing at the time of transactions.

2. Covered liabilities in foreign currencies are accounted at the rate at which they have been covered. Uncovered liabilities in foreign currency are accounted at the rates as on the balance sheet date.

3. The difference between forward rate and exchange rate at the inception of a forward exchange contract is recognized as income or expenses over the life of the contract.

4. Exchange difference in respect of uncovered foreign currency liabilities are recognized in the profit and loss account.

O Segment Reporting

In terms of Accounting Standard (AS 17) relating to Segment reporting, the Company reports segment wise turnover / Income, Profit before interest and tax and return on capital employed as part of the financial statements.

P Subsidies and Government Grants:

Investment Subsidy/Grant received from the Government is treated as Capital Reserve or Revenue receipt based on the nature of subsidy/grant as per AS 12.

Interest Subsidy under Technology Upgradation Fund Scheme (TUF) is credited to the Interest and Finance Charges.

Q Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss account. 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 asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

 
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