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Accounting Policies of UltraTech Cement Ltd. Company

Mar 31, 2015

(i) Basis of Accounting and preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting inaccordance with the Generally Accepted Accounting Principles in India (Indian GAAP).These financial statements comply in all material aspects with the Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act 1956 ("the 1956 Act"), as applicable and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

The accounting policiesadopted in the preparation of these financial statements are consistent with those of the previous year.

(ii) Use of estimates:

The preparation of financial statements in conformity with the Indian GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements,the reported amounts of revenues and expenses during the reporting period and the disclosures relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognised in the period in which the results are known or materialise.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

(iii) Fixed Assets:

Fixed assets (whether Tangible or Intangible) are stated at costless accumulated depreciation / amortisation / impairment loss (if any), net of Modvat / Cenvat (wherever claimed). The cost of fixed assets includes taxes, duties, freight, borrowing cost, if capitalisation criteria are met and other incidental expenses incurred in relation to their acquisition/bringing the assets for their intended use.

Spares which can be used only in connection with a particular Plant and Equipment of the Company and use is expected to be irregular, are capitalised at cost, net of Cenvat / Modvat (wherever claimed).

Fixed Assets held for disposal are stated at lower of net book value and net realisable value and disclosed separately in the financial statements under other current assets.

Losses arising from the retirement of, and gains/losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

(iv) Expenditure during construction period:

Expenditure/ Income, during construction period (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed assets) is included under Capital Work-in-Progress and the same is allocated to the respective fixed assets on the completion of their construction.

(v) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Borrowing cost includes interest expense, amortisation of discounts, ancillary costs incurred in connection with borrowing of funds and exchange difference arising from foreign currency borrowings to the extent they are regarded as an adjustment to the Interest cost.

(vi) Depreciationand Amortisation:

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 lives as prescribed in Schedule II to the Companies Act, 2013.

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

The useful life of an asset is the period over which an asset is expected to be available for use by an entity, or the number of production or similar units expected to be obtained from the asset by the entity.

In case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II to the Companies Act, 2013. The useful lifehas been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset on the basis of management's best estimation of getting economic benefits from those class of assets. The Company uses its technical expertise along with historical and industry trends for arriving the economic life of an asset. Such class of assets and their estimated useful lives are as under:

No. Natureof Asset Useful life of the assets

1 Thermal Power Generation Plants 25 Years

2 Office Equipment 4 Years

3 Furniture and Fixtures 7 Years

4 Mobile Phones 3 Years

5 Company Vehicles (other than those provided to the employees) 5 Years

6 Motor Cars given to the employees as per the Company s Scheme 4-5 Years

7 Leasehold Land and Mining Lease Period of the Lease

8 Assets not owned by the Company As per period specified in the agreement, else 5 years

9 Expenditure incurred on Jetty Over the period of the relevant agreement such that the cumulative amortisation is not less than the cumulative rebate availed by the Company.

10 Servers and Networks 3 Years

11 Software 3 Years

12 Spares which are capitalised Allocated on Systematic basis over the useful life of related fixed assets

13 Assets individually costing less than or equal to Rs. 10,000 In the year of purchase

Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of Projects from the date of commencement of commercial production. Depreciation on deductions / disposals is provided on a pro-rata basisupto the month preceding the month of deduction / disposal.

(vii) Impairment of Assets:

The carrying amount of assetsare reviewed at each balance sheet date, if there is an indication of impairment based on internal and external factors.

An asset is treated as impaired when the carrying amount of the asset exceeds its recoverable amount. An asset's recoverable amount is the higher of an assets net selling price and 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 discounting rate is a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which the asset is identified as impaired. Impairment loss recognised in prior years is reversed when there is an indication that impairment loss recognised for the asset no longer exists or has decreased.

(viii) Derivatives:

Derivative instrument are used to hedge risk associated with foreign currency fluctuations, interest rates and commodity prices. The derivative contracts are closely linked with underlying transactions and are intended to be held till maturity. The Company does not enter into any derivative contracts for speculations or trading purposes.

With effect from current year, the Company has adopted AS 30 - "Financial Instrument - Recognition and Measurement", to the extent that adoption did not conflict with exiting accounting standards and other regulatory requirements. Accordingly the Company test each contracts which are entered on the basis of highly probable forecast transactions and decided whether to designate as an effective hedge.

To designate a forward/swaps or options contract as an effective hedge, the management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk.

The gain or losses on designated hedging contract that qualify as an effective hedge is recorded in the hedging reserve account until the transactions are complete. Upon completion or cessation of hedging relationship as an effective, net cumulative gain / losses are transferred to Statement of Profit & Loss.

The gain or losses on the contracts which do not qualify for hedge accounting or considered as ineffective hedge transactions are charged to Statement of Profit & Loss.

(ix) Investments:

a) Presentation & disclosure

Investments which are readily realisable and are intended to be held for not more than one yearare classified as current investments. All other investments are classified as long-term investments / non-current investments.

b) Recognition & measurement

Long-term investments are stated at cost after deducting provisions made, if any, for diminution in value of investments other than temporary, determined separately for each individual investment.

The carrying cost of long-term investment in subsidiary having mining rights for the mineral resources is determined net-off amortisation pertaining to the minerals extracted from the mines, calculated in proportion to the quantity extracted during the period out of the total estimated mineral reserve size. The total estimated reserve size is reviewed periodically, on the basis of technical estimates.

Current investments, except current maturities of Long- term investments, are stated at lower of cost and fair value determined for each category of investments.

c) Disposal

On disposal of an investment, the difference between the carrying amount and the disposal proceeds, net of expenses, is recognised in the Statement of Profit and Loss.

(x) Foreign Currency Transactions:

a) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the year-end rates.

b) In respect of forward exchange contracts, premium or discount, being the difference between the forward exchange rate and the exchange rate at the inception of contract is recognised as expense or income over the life of the contract.

c) Exchange difference including premium or discount on forward exchange contracts, relating to borrowed funds, liabilities and commitments in foreign currency for acquisition of fixed assets, arising till the assets are ready for their intended use, are adjusted to cost of fixed assets. Any other exchange difference either on settlement or translation is recognised in the Statement of Profit and Loss.

d) Investment in equity capital of overseas companies registered outside India are carried in the Balance Sheet at the rates at which transactions have been executed.

(xi) Inventories:

Inventories are valued as follows:

a) Raw material, fuel, stores & spare parts and packing materials:

Valued at lower of cost and net realisable value (NRV). However, these items are considered to be realisable at cost, if the finished products, in which they will be used, are expected to be sold at or above cost. Cost is determined on weighted average basis.

b) Work-in- progress (WIP), finished goods, stock-in-trade and trial run inventories:

Valued at lower of cost and NRV. Finished goods and WIP cost includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed onweighted average basis.

c) Waste / Scrap:

Waste / Scrap inventory is valued at NRV.

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

(xii) Employee Benefits:

a) Short term employee benefits

Short term employee benefits are recognised as an expense on accrual basis.

b) Defined Contribution Plan

Contributionspayable to recognised provident fund, approved superannuation scheme and national pension scheme, which are substantially defined contribution plans, are recognised as expense in the Statement of Profit and Loss, as they are incurred.

Contributions as specified by law are paid to the provident fund set up as irrevocable trust. The Company is generally liable for annual contribution and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contribution and shortfall, if any, as an expense in the year incurred.

c) Defined Benefit Plan

The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post-retirement medical benefits, are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Gratuity is funded with an approved fund. Actuarial gains/losses, if any, are recognised immediately in the Statement of Profit and Loss.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

d) Other Long Term Benefits

Long-term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Actuarial gains / losses, if any, are recognised immediately in the Statement of Profit and Loss.

e) Presentation of Non-funded obligation of defined benefit plans and other long term benefits, as long term and short term liability is on the basis of actuary's report.

(xiii) Employee Share based payments:

The Company follows intrinsic value method for valuation of Employee Stock Option in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 {erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999} and the Guidance Note on Accounting for Employee Share based payments, issued by the Institute of Chartered Accountants of India. The excess of market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Statement of Profit and Loss over the period of vesting, adjusting for the actual and expected vesting.

(xiv) Income Taxes:

Income Tax expenses comprise current tax and deferred tax charge or credit.

Current Tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.

Deferred Tax reflects the impact of timing difference between accounting income and taxable income during the current year and reversal of timing differences for the earlier years. Deferred tax charge or credit and corresponding deferred tax liabilities or assets are measured using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation and items relating to capital losses which is recognised based on virtual certainty, supported by continuing evidence that there will be sufficient future taxable income available to realise the asset.

Minimum Alternate Tax (MAT):

MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by ICAI, the said asset is created by way of a credit to the Statement of Profit and Loss and is shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(xv) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

a) Sales are recognised on transfer of significant risks and rewards of ownership of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts,rebates and returns but include excise duty. Sales exclude self-consumption of finished goods.

b) Income from services is recognised (net of service tax as applicable) as they are rendered, based on agreement/arrangement with the concerned parties.

c) Dividend income is accounted for when the right to receive the income is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable. Income other than dividend and interest on Investments is recognised on maturity or sale.

d) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

(xvi) 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. The total estimate of restoration expenses is reviewed periodically, on the basis of technical estimates.

(xvii) Government Grants and Subsidies:

a) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached thereto and that the grants will be received.

b) Capital Government grants or subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and other capital grants are credited to Capital Reserve.

c) Other Government grants or subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

(xviii) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events and it is probable that an outflow of resourceswill be required to settle the obligation, in respect of which a reliable estimate can be made.These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as Contingent Liabilities.

Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor disclosed, in the financial statements.

(xix) Earnings Per Share:

The basic Earnings Per Share ("EPS") is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit/(loss) after tax for the year attributable to the equity shareholders divided by the weighted average number of equity shares outstanding during the year after adjusting for the effects of all dilutive potential equity shares.

(xx) Segment Reporting:

a) Identification of Segments:

Primary segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geography in which major operating divisions of the Company operate.

b) Segment Policies:

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

(xxi) Research and development expenditure:

Revenue expenditure pertaining to research is expensed as incurred. Capital expenditure incurred on development is capitalised if such expenditure leads to creation of an asset, otherwise such expenditure is charged to the Statement of Profit and Loss.

(xxii) Operating lease:

Leases where significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis over the lease term.

(xxiii) Classification of Assets and Liabilities into Current/Non-current:

All assets and liabilities are presented as Current or Non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation, the Company has ascertained its operating cycle as 12 months for the purpose of Current / Non-current classification of assets and liabilities.

(xxiv) Cash and Cash Equivalents:

Cash and cash equivalents for the purpose of Cash Flow Statement includes Cash in hand, Balances with Banks and Fixed deposits with banks.


Mar 31, 2013

(i) Basis of Accounting:

The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India. These financial statements comply in all material aspects with the Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules, 2006 (as amended), to the extent applicable, other pronouncements of the Institute of Chartered Accountants of India (ICAI), the relevant provisions of the Companies Act, 1956 and applicable guidelines issued by the Securities and Exchange Board of India (SEBI).

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

(ii) Use of estimates:

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognised in the period in which the results are known or materialise.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

(iii) Fixed Assets:

Fixed assets (whether Tangible or Intangible) are stated at cost less accumulated depreciation/amortisation/ impairment loss (if any), net of Modvat / Cenvat (wherever claimed). The cost of fixed assets includes taxes, duties, freight, borrowing cost, if capitalisation criteria are met, and other incidental expenses incurred in relation to their acquisition/bringing the assets for their intended use.

Spares which can be used only in connection with a particular Plant & Machinery of the Company and use is expected to be irregular, are capitalised at cost net of Cenvat / Modvat (wherever claimed)

Fixed Assets held for disposal are stated at lower of net book value and net realisable value and disclosed separately in the financial statements under other current assets.

Losses arising from the retirement of and gains / losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

(iv) Expenditure during construction period:

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

(v) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Borrowing cost consists of interest expense and other financial costs incurred in connection with borrowing of funds.

The difference between the face value and the issue price of ''Discounted Value Non-Convertible Debentures'', being in the nature of interest, is charged to the Statement of Profit and Loss, on a compound interest basis determined with reference to the yield inherent in the discount.

(vi) Depreciation and Amortisation:

Depreciation is provided on straight-line basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except for some assets which are at higher rates consequent to management estimate of the useful life of the same, as stated under:

Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of Projects from the date of commencement of commercial production. Depreciation on deductions/ disposals is provided on a pro-rata basis upto the month preceding the month of deduction/disposal.

(vii) Impairment of Assets:

The carrying amount of assets are reviewed at each balance sheet date, if there is an indication of impairment based on internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An asset''s recoverable amount is the higher of an assets net selling price and 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. Net selling price is the amount obtainable from sale of the asset in an arm''s length transaction between knowledgeable, willing parties, less the costs of disposal.

An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which the asset is identified as impaired. Impairment loss recognised in prior years is reversed when there is an indication that impairment loss recognised for the asset no longer exists or has decreased.

(viii) Foreign Currency Transactions:

a) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the year-end rates.

b) In respect of forward exchange contracts, premium or discount, being the difference between the forward exchange rate and the exchange rate at the inception of contract is recognised as expense or income over the life of the contract.

c) Exchange difference including premium or discount on forward exchange contracts, relating to borrowed funds, liabilities and commitments in the foreign currency for acquisition of fixed assets, arising till the assets are ready for their intended use, are adjusted to cost of fixed assets. Any other exchange difference either on settlement or translation is recognised in the Statement of Profit and Loss.

d) Investment in equity capital of companies registered outside India are carried in the Balance Sheet at the rates at which transactions have been executed.

(ix) Derivatives:

Financial Derivative Instruments

Derivative instruments are used to hedge risk associated with foreign currency fluctuations and interest rates. The derivative contracts are closely linked with the underlying transactions and are intended to be held till maturity. These are accounted on the date of their settlement and realised gain/loss in respect of settled contracts is recognised in the Statement of Profit and Loss.

Commodity Hedging

The realised gain or loss in respect of commodity hedging contracts, the pricing period of which has expired or contracts cancelled during the year, are recognized in the Statement of Profit and Loss. However, in respect of contracts, the pricing period of which extends beyond the Balance Sheet date, suitable provision for likely loss, if any, is made in the accounts.

(x) Investments:

Investments, that are intended to be held for not more than one year, are classified as current investments. All other investments are classified as long-term investments/non-current investments.

Long-term investments are carried at cost after deducting provisions made, if any, for diminution in value of investments other than temporary, determined separately for each individual investment. Current investments are carried at lower of cost and fair value determined for each category of investments.

(xi) Inventories:

Inventories are valued as follows:

a) Raw material, fuel, stores & spare parts and packing materials:

Valued at lower of cost and net realisable value (NRV). However, these items are considered to be realisable at cost, if the finished products, in which they will be used, are expected to be sold at or above cost. Cost is determined on weighted average basis.

b) Work-in-progress (WIP), finished goods, stock-in-trade and trial run inventories:

Valued at lower of cost and NRV. Finished goods and WIP cost includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis

c) Waste / Scrap is valued at NRV

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

(xii) Employee Benefits:

a) Short term employee benefits

Short term employee benefits are recognised as an expense on accrual basis.

b) Defined Contribution Plan

Contributions payable to recognised provident fund and approved superannuation scheme, which are substantially defined contribution plans, are recognised as expense in the Statement of Profit and Loss, as they are incurred.

Contributions as specified by law are paid to the provident fund set up as irrevocable trust. The Company is generally liable for annual contribution and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contribution and shortfall, if any, as an expense in the year incurred.

c) Defined Benefit Plan

The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post retirement medical benefits, are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Gratuity is funded with an approved fund. Actuarial gains/ losses, if any, are recognised immediately in the Statement of Profit and Loss.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

d) Other Long-term Benefits

Long-term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Actuarial gains/losses, if any, are recognised immediately in the Statement of Profit and Loss.

e) Presentation of Non funded obligation of defined benefit plans and other long term benefits, as long term and short term liability is on the basis of actuary''s report.

(xiii) Employee Share based payments:

The Company follows intrinsic value method for valuation of Employee Stock Options. In accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share based payments, issued by the Institute of Chartered Accountants of India. The excess of market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Statement of Profit and Loss over the period of vesting, adjusting for the actual and expected vesting.

(xiv) Income Taxes:

Income Tax expenses comprise current tax and deferred tax charge or credit.

Current Tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the provisions of the Income-tax Act, 1961.

Deferred Tax reflects the impact of timing difference between accounting income and taxable income during the current year and reversal of timing differences for the earlier years. Deferred tax charge or credit and corresponding deferred tax liabilities or assets are measured using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation which is recognised based on virtual certainty, that the assets will be realised in future.

(xv) Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

a) Sales are recognised on transfer of significant risks and rewards of ownership of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but include excise duty.

b) Income from services is recognised as they are rendered, based on agreement/arrangement with the concerned parties.

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

d) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

(xvi) 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.

The total estimate of restoration expenses is reviewed periodically, on the basis of technical estimates.

(xvii) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events 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. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor disclosed, in the financial statements.

(xviii) Earnings Per Share:

The basic Earnings Per Share ("EPS") is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit / (loss) after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(xix) Government Grants and Subsidies:

a) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached thereto and that the grants will be received.

b) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and other capital grants are credited to Capital Reserve.

c) Other Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

(xx) Segment Reporting Policies:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geography in which major operating divisions of the Company operate.

(xxi) Research and development expenditure:

Revenue expenditure on research and development is expensed as incurred. Capital expenditure incurred on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

(xxii) Operating lease:

Leases where significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases and lease rentals thereon are charged to the Statement of Profit and Loss.

(xxiii) Current / Non-Current:

All assets and liabilities are presented as Current or Non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation, the Company has ascertained its operating cycle as 12 months for the purpose of Current / Non current classification of assets and liabilities.

(xxiv) Cash and Cash Equivalents:

Cash and cash equivalents for the purpose of Cash Flow Statement includes cash in hand, Balances with Banks and Fixed deposits with banks.


Mar 31, 2012

(i) Basis of Accounting:

The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India. These financial statements comply in all material aspects with the Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules, 2006 (as amended), to the extent applicable, other pronouncements of the Institute of Chartered Accountants of India (ICAI), with the relevant provisions of the Companies Act, 1956 and applicable guidelines issued by the Securities and Exchange Board of India (SEBI).

(ii) Use of estimates:

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognised in the period in which the results are known or materialise.

Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

(iii) Fixed Assets:

Fixed assets (whether Tangible or Intangible) are stated at cost less accumulated depreciation / amortisation / impairment loss (if any), net of Modvat / Cenvat (wherever claimed). The cost of fixed assets includes taxes, duties, freight, borrowing cost, if capitalisation criteria are met and other incidental expenses incurred in relation to their acquisition / bringing the assets for their intended use.

Fixed Assets held for disposal are stated at lower of net book value and net realisable value.

(iv) Expenditure during construction period:

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

(v) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred

The difference between the face value and the issue price of 'Discounted Value Non-Convertible Debentures', being in the nature of interest, is charged to the statement of Profit and Loss, on a compound interest basis determined with reference to the yield inherent in the discount.

(vii) Impairment of Assets:

The carrying amount of assets are reviewed at each balance sheet date, if there is an indication of impairment based on internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An asset's recoverable amount is the higher of an assets net selling price and 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. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which the asset is identified as impaired. Impairment loss recognised in prior years is reversed when there is an indication that impairment loss recognised for the asset no longer exists or has decreased.

(viii) Foreign Currency Transactions:

a) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the year-end rates.

b) In respect of forward exchange contracts, premium or discount, being the difference between the forward exchange rate and the exchange rate at the inception of contract is recognised as expense or income over the life of the contract.

c) Exchange difference including premium or discount on forward exchange contracts, relating to borrowed funds, liabilities and commitments in the foreign currency for acquisition of fixed assets, arising till the assets are ready for their intended use, are adjusted to cost of fixed assets. Any other exchange difference either on settlement or translation is recognised in the Statement of Profit and Loss.

d) Investment in equity capital of companies registered outside India are carried in the Balance Sheet at the rates at which transactions have been executed.

(ix) Derivatives:

Financial Derivative Instruments

Derivative instruments are used to hedge risk associated with foreign currency fluctuations and interest rates. The derivative contracts are closely linked with the underlying transactions and are intended to be held till maturity. These are accounted on the date of their settlement and realised gain/loss in respect of settled contracts is recognised in the Statement of Profit and Loss.

Commodity Hedging

The realised gain or loss in respect of commodity hedging contracts, the pricing period of which has expired or contracts cancelled during the year, are recognised in the Statement of Profit and Loss. However, in respect of contracts, the pricing period of which extends beyond the Balance Sheet date, suitable provision for likely loss, if any, is made in the accounts.

(x) Investments:

Investments, that are intended to be held for not more than one year, are classified as current investments. All other investments are classified as long term investments/non-current investments.

Long-term investments are carried at cost after deducting provisions made, if any, for diminution in value of investments other than temporary, determined separately for each individual investment. Current investments are carried at lower of cost and fair value determined for each category of investments.

(xi) Inventories:

Inventories are valued at the lower of cost and net realisable value except waste / scrap which is valued at net realisable value. The cost is calculated on weighted average method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

Cost includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

(xii) Employee Benefits:

a) Short term employee benefits

Short term employee benefits are recognised as an expense on accrual basis.

b) Defined Contribution Plan

Contributions payable to recognised provident fund and approved superannuation scheme, which are substantially defined contribution plans, are recognised as expense in the Statement of Profit and Loss, as they are incurred.

Contributions as specified by law are paid to the provident fund set up as irrevocable trust. The Company is generally liable for annual contribution and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contribution and shortfall, if any, as an expense in the year incurred.

c) Defined Benefit Plan

The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post retirement medical benefits, are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Gratuity is funded with an approved fund. Actuarial gains/losses, if any are recognised immediately in the Statement of Profit and Loss.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

d) Other Long Term Benefits

Long-term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Actuarial gains/ losses, if any, are recognised immediately in the Statement of Profit and Loss.

(xiii) Employee Share based payments:

The Company follows intrinsic value method for valuation of Employee Stock Options. In accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the excess of market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Statement of Profit and Loss over the period of vesting, adjusting for the actual and expected vesting.

(xiv) Income Taxes:

Income Tax expenses comprise current tax and deferred tax charge or credit.

Current Tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax reflects the impact of timing difference between accounting income and taxable income during the current year and reversal of timing differences for the earlier years. Deferred tax charge or credit and corresponding deferred tax liabilities or assets are measured using the tax rates and laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation which are recognised based on virtual certainty, that the assets will be realised in future.

(xv) Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

a) Sales are recognised on transfer of significant risks and rewards of ownership of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but include excise duty.

b) Income from services is recognised as they are rendered, based on agreement/arrangement with the concerned parties.

c) Dividend income is accounted for when the right to receive the income is established. Interest income is recognised on accrual basis.

d) Export incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

(xvi) 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.

The total estimate of restoration expenses is reviewed periodically, on the basis of technical estimates.

(xvii) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events 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. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor disclosed, in the financial statements.

(xviii) Earnings Per Share:

The basic Earnings Per Share ("EPS") is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit / (loss) after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(xix) Government Grants and Subsidies:

a) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached thereto and that the grants will be received.

b) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and capital grants for projects are credited to Capital Reserve.

c) Revenue Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

(xx) Segment Reporting Policies:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geography in which major operating divisions of the Company operate.

(xxi) Research and development expenditure:

Revenue expenditure on research and development is expensed as incurred. Capital expenditure incurred on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

(xxii) Operating lease:

Leases where significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases and lease rentals thereon are charged to the Statement of Profit and Loss.

(xxiii) Current / Non current:

All assets and liabilities are presented as Current or Non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation, the Company has ascertained its operating cycle as 12 months for the purpose of Current / Non current classification of assets and liabilities.


Mar 31, 2011

1. Basis of Accounting:

The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified under the Companies (Accounting Standard) Rules, 2006 (as amended), to the extent applicable, other pronouncements of the Institute of Chartered Accountants of India and with the relevant provisions of the Companies Act, 1956.

2. Use of estimates:

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Any revision to accounting estimates is recognised prospectively in the current and future periods. Difference between actual results and estimates are recognised in the period in which the results are known or materialise.

3. Fixed Assets:

Fixed assets, whether tangible or intangible, are stated at cost less accumulated depreciation / impairment loss (if any), net of Modvat / Cenvat (wherever claimed). The cost of fixed assets includes taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the assets for their intended use.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date are disclosed under Capital Work-in-Progress.

Fixed Assets held for disposal are stated at lower of net book value and net realisable value.

4. Treatment of expenditure during construction period:

Expenditure / Income, during construction period is included under Capital-Work-in-Progress and the same is allocated to the respective Fixed Assets on the completion of their construction.

5. Foreign Currency Transactions:

(i) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the year-end rates.

(ii) In respect of Forward exchange contracts, premium or discount, being the difference between the forward exchange rate and the exchange rate at the inception of contract is recognised as expense or income over the life of the Contract.

(iii) Exchange difference including premium or discount on forward exchange contracts, relating to borrowed funds, liabilities and commitments in the foreign currency for acquisition of fixed assets, arising till the assets are ready for their intended use, are adjusted to cost of fixed assets. Any other exchange difference either on settlement or translation is recognised in the Profit and Loss account.

(iv) Investments in equity capital of companies registered outside India are carried in the Balance Sheet at the rates at which transactions have been executed.

6. Derivatives:

Financial Derivative Instruments

Derivative instruments are used to hedge risk associated with foreign currency fluctuations and interest rates. The derivative contracts are closely linked with the underlying transactions and are intended to be held to maturity. These are accounted on the date of their settlement and realised gain/loss in respect of settled contracts is recognised in the Profit and Loss Account.

Commodity Hedging

The realised gain/loss in respect of commodity hedging contracts, the pricing period of which has expired or contracts cancelled during the year are recognized in the Profit and Loss Account. However, in respect of contracts, the pricing period of which extends beyond the Balance Sheet date, suitable provision for likely loss, if any, is made in the accounts.

7. Investments:

Investments are classified into long term investments and current investments. Long-term investments are carried at cost after deducting provisions made, if any, for diminution in value of investments other than temporary, determined separately for each individual investment.

Current investments are carried at lower of cost and fair value, determined separately for each individual investment.

8. Inventories:

Inventories are valued at the lower of weighted average cost and estimated net realisable value except waste/scrap which is valued at net realisable value.

Cost of finished goods and process stock includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

9. Depreciation and Amortisation:

Depreciation is charged in the Accounts on the following basis:

(A) Tangible Assets:

(i) Depreciation is provided on the straight-line basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except for some of assets at the rates based on the useful life of the assets as determined by the management, which are higher than the rates specified in Schedule XIV to the Companies Act, 1956, as stated under:

(a) Company Vehicles other than those provided to the employees at 20% per annum.

(b) Roads, Culverts, Walls, Buildings etc. within factory premises at 3.34% per annum.

(c) Computer and Office Equipments at 25% per annum

(d) Furnitures and Fixtures - 7 years

(e) Mobile Phones - 3 years

(f) Motor Cars given to the employees as per the Company's Scheme are depreciated over the Scheme period.

(ii) Assets acquired up to September 30, 1987, are depreciated at the rates prevailing at the time of acquisition.

(iii) The value of leasehold land and mining lease is amortised over the period of the lease.

(iv) Assets not owned by the Company are amortised over a period of five years or the period specified in the agreement.

(v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the cumulative amortisation is not less than the cumulative rebate availed by the Company.

(vi) Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of project from the date of commencement of commercial production, while depreciation on deductions/disposals is provided on a pro-rata basis upto the month preceding the month of deductions/disposals.

(B) Intangible Assets:

Specialised softwares are amortised over a period of 3 years.

10. Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognised in prior years is recorded when there is an indication that impairment loss recognised for the asset no longer exists or has been decreased.

11. Employee Benefits:

(i) Short term employee benefits

Short term employee benefits are recognised as an expense on accrual at the undiscounted amount in the Profit and Loss Account.

(ii) Defined Contribution Plan

Contributions payable to recognised provident fund and approved superannuation scheme, which are defined contribution plans, are recognised as expense in the Profit and Loss Account; as they are incurred.

Contributions as specified by the law are paid to the provident fund set up as irrevocable trust by the holding company. The Company is generally liable for annual contribution and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contribution and shortfall, if any, as an expense in the year incurred.

(iii) Defined Benefit Plan

The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post retirement medical benefits, are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Gratuity is funded with an approved fund. Actuarial gains/losses, if any, are recognised immediately in the Profit and Loss Account.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

(iv) Other Long Term Benefits

Long-term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Actuarial gains/ losses, if any, are recognised immediately in the Profit and Loss Account.

12. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

The difference between the face value and the issue price of 'Discounted Value Non-Convertible Debentures', being in the nature of interest, is charged to the profit and loss account, on a compound interest basis determined with reference to the yield inherent in the discount.

13. Taxation:

Current Tax is measured on the basis of estimated taxable income for the current accounting period and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation which are recognised based on virtual certainty, that the assets will be realised in future.

14. Revenue Recognition:

(i) Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but includes excise duty.

(ii) Income from services is recognised as they are rendered, based on agreement/arrangement with the concerned parties.

(iii) Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognised on accrual basis.

(iv) Export Incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

15. 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.

The total estimate of restoration expenses is reviewed periodically, on the basis of technical estimates.

16. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events 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. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor disclosed, in the financial statements.

17. Employees Share based payments:

The Company follows intrinsic value method for valuation of Employees Stock Options. The excess of the market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Profit and Loss account over the period of vesting, adjusting for the actual and expected vesting.

18. Earnings Per Share:

The basic Earnings Per Share ("EPS") is computed by dividing the net profit after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

19. Government Grants and Subsidies:

(i) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the condition attached thereto and that the grants will be received.

(ii) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and capital grants for projects are credited to Capital Reserve.

(iii) Revenue Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

20. Segment Reporting Policies:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geography in which major operating divisions of the Company operate.

21. Research and development expenditure:

Revenue expenditure on research and development is expensed as incurred. Capital expenditure incurred on research and development is capitalised as fixed assets and depreciated in accordance with the depreciation policy of the Company.

22. Operating lease:

Leases where significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases and lease rentals thereon are charged to the Profit and Loss Account.












Mar 31, 2010

1. Basis of Accounting:

The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified under the Companies (Accounting Standard) Rules, 2006 (as amended), other pronouncements of the Institute of Chartered Accountants of India, the relevant provisions of the Companies Act, 1956 and guidelines issued by Securities and Exchange Board of India.

2. Use of Estimates:

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financia statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Any revision to accounting estimates is recognised prospectively in the current and future periods. Difference between actual results and estimates are recognised in the period in which the results are known or materialise.

3. Fixed Assets:

Fixed assets, whether tangible or intangible, are stated at cost less accumulated depreciation, net of Modvat / Cenvat (wherever claimed), less accumulated depreciation. The cost of fixed assets includes taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the assets for their intended use.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date are disclosed under Capital Work-in-Progress.

4. Treatment of Expenditure during Construction Period:

Expenditure / Income, during construction period is included under Capital-Work-in-Progress and the same is allocated to the respective Fixed Assets on the completion of their construction.

5. Foreign Currency Transactions:

(i) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the year-end rates.

(ii) In respect of Forward exchange contracts, premium or discount, being the difference between the forward exchange rate and the exchange rate at the inception of contract is recognised as expense or income over the life of the Contract.

(iii) Exchange difference including premium or discount on forward exchange contracts, relating to borrowed funds, liabilities and commitments in the foreign currency for acquisition of fixed assets, arising till the assets are ready for their intended use, are adjusted to cost of fixed assets. Any other exchange difference either on settlement or translation is recognised in the Profit and Loss account.

(iv) Investments in equity capital of companies registered outside India are carried in the Balance Sheet at the rates at which transactions have been executed.

6. Financial Derivatives:

Derivative financial instruments are used to hedge risk associated with foreign currency fluctuations and interest rates. The derivative contracts are closely linked with the underlying transactions and are intended to be held to maturity. These are accounted on the date of their settlement and realised gain/loss in respect of settled contracts is recognised in the Profit and Loss Account.

7. Investments:

nvestments are classified into long term investments and current investments. Long-term investments are carried at cost after deducting provisions, if any, made for diminution other than temporary, determined separately for each individual investment.

Current investments are carried at lower of cost or fair value, determined separately for each individual investment.

8. Inventories:

nventories are valued at the lower of weighted average cost and estimated net realisable value except waste / scrap which is valued at net realisable value.

Cost of finished goods and process stock includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Obsolete, defective and unserviceable inventories are duly provided for.

9. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to the Profit and Loss Account.

b) Lease transactions entered into on or after April 1, 2001:

i) Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term.

(Also refer to the policy on Depreciation and Amortisation below)

10. Depreciation and Amortisation:

Depreciation is charged in the Accounts on the following basis:

(A) Tangible Assets:

(i) Depreciation is provided on the straight-line basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except for the following:

(a) Company Vehicles other than those provided to the employees at 20% per annum.

(b) Motor Cars given to the employees as per the Company s Scheme are depreciated over the Scheme period.

(c) Roads, Culverts, Walls, Buildings etc., within factory premises at 3.34 % per annum.

(d) Computer and Office Equipments at 25% per annum.

(e) Furnitures and Fixtures at 14.29% per annum.

(f) Mobile Phones at 33.33% per annum.

(ii) Assets acquired upto September 30, 1987, are depreciated at the rates prevailing at the time of acquisition.

(iii) The value of leasehold land and mining lease is amortised over the period of the lease.

(iv) Assets not owned by the Company are amortised over a period of five years or the period specified in the agreement.

(v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the cumulative amortisation is not less than the cumulative rebate availed by the Company.

(vi) Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of project from the date of commencement of commercial production, while depreciation on deductions / disposals is provided on a pro-rata basis upto the month preceding the month of deductions / disposals.

(B) Intangible Assets:

Specialise softwares are amortised over a period of 3 years.

1. Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date, if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognised in prior years is recorded when there is an indication that impairment loss recognised for the asset no longer exists or has been decreased.

12. Employee Benefits:

(i) Defined Contribution Plan

Contributions payable to recognised provident fund and approved superannuation scheme, which are defined contribution plans, are recognised as expense in the Profit and Loss Account; as they are incurred.

(ii) Defined Benefit Plan

The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post retirement medical benefits, are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Gratuity is funded with an approved fund. Actuarial gains/losses, if any, are recognised immediately in the Profit and Loss Account.

Obligation is measured at the present value of estimated future cash flows using a discount rate that is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

(iii) Other Long Term Benefits

Long-term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, at the end of each financial year. Actuarial gains/losses, if any, are recognised immediately in the Profit and Loss Account.

1 3. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

The difference between the face value and the issue price of Discounted Value Non-Convertible Debentures , being in the nature of interest, is charged to the profit and loss account, on a compound interest basis determined with reference to the yield inherent in the discount.

14. Taxation:

Current Tax is measured on the basis of estimated taxable income for the current accounting period and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax resulting from timing differences between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is reasonable certainty, except for carried forward losses and unabsorbed depreciation which are recognised based on virtual certainty, that the assets will be realised in future.

1 5. Revenue Recognition:

(i) Sales Revenue is recognised on transfer of significant risks and rewards of ownership of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and returns but includes excise duty.

(ii) Income from services is recognised as they are rendered, based on agreement/arrangement with the concerned parties.

(iii) Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognised on accrual basis.

(iv) Export Incentives, insurance, railway and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

1 6. 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.

Provision for Mines Restoration is reviewed annually, on the basis of technical estimates.

1 7. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources which can be measured only by using of substantial degree of estimation.

Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor disclosed, in the financial statements.

1 8. Employees Share based payments:

The Company follows intrinsic value method for valuation of Employees Stock Options. The excess of the market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Profit and Loss account over the period of vesting, adjusting for the actual and expected vesting.

1 9. Earnings Per Share:

The basic Earnings Per Share ( EPS ) is computed by dividing the net profit after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

20. Government Grants and Subsidies:

(i) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the condition attached thereto and that the grants will be received.

(ii) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets.

(iii) Revenue Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs.

21. Segment Reporting Policies:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geography in which major operating divisions of the Company operate.

 
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