Enter the first few characters of Company and click 'Go'

Accounting Policies of KCP Ltd. Company

Mar 31, 2022

1. Company overview and significant accounting policies

1.1 Company Overview

The KCP Limited (âthe companyâ) a public limited company incorporated and domiciled in India and has its registered office at Chennai. The securities of the company are listed in National stock exchange of India limited.

The company is engaged in the business of manufacture and sale of cement, heavy engineering, power generation for captive use and hospitality.

These financial statements for the year ended March 31, 2022 are presented in Indian rupees (INR) and rounded to nearest lakhs, were approved and authorized by the board of directors for issue on May 18, 2022.

1.2 Basis Of Preparation Of Financial Statements

These financial statements are prepared in accordance with the Indian accounting standards (âIND ASâ), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, as per the provision of The Companies Act 2013 (âthe actâ) and the guidelines of The Securities and Exchange Board of India (SEBI). The IND AS are prescribed under section 133 of the act read with rule 3 of the Companies (India Accounting standards) Rule 2015 and relevant amendments rules issued thereafter. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to existing accounting standard requires a change in the accounting policy hitherto in use.

The company assets and liabilities have been classified as current or non-current as per the companyâs operating cycle and other criteria set out below.

An asset is classified as current if:

(a) it is expected to be realized or sold or consumed in the Companyâs normal operating cycle;

(b) it is held primarily for the purpose of trading;

(d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current if:

(a) it is expected to be settled in normal operating cycle;

(b) it is held primarily for the purpose of trading;

(d) it has no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between acquisition of assets for processing and their realization in cash and cash equivalents. The Companyâs normal operating cycle is twelve months.

1.3 Use of Estimates, Judgements and Assumptions

The preparation of financial statements, in conformity with the IND AS, requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future period. The application of Accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed below.

â¢ Estimation of fair value of unlisted securities.

â¢ Defined benefit obligation.

â¢ Estimation of useful life of Property, Plant and Equipment.

â¢ Estimation and evaluation of provisions and contingencies relating to tax litigations.

â¢ Expected Credit Losses.

â¢ Revenue recognition in case of Engineering job work contracts.

â¢ Measurement of Lease liabilities and Right of Use Asset

â¢ Estimation of uncertainties relating to the global health pandemic from COVID-19

The COVID -19 pandemic continues to be human tragedy declared as global pandemic by the World Health Organisation with adverse impact on economy and business. The company has considered the possible effects, if any, that may result from Covid-19 on the carrying amounts of financial assets, inventory, receivables, advances, etc., as well as liabilities accrued. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the Company has used internal and external sources of information. The Company has reviewed the assumptions used and based on current estimates expects the carrying amount of these assets will be recovered. The impact of COVID-19 on the Companyâs financial statements may differ from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions

1.4 Recent Pronouncements

Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 23 March 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.

Ind AS 16 - Property Plant and Equipment -Proceeds before intended use

The amendment clarifies that the excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant and equipment.

The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2022. The Company has evaluated the amendment and there is no impact on its financial statements.

Ind AS 37 - Provisions, Contingent liabilities and Contingent assets - Onerous contracts - cost of fulfilling a contract

The amendment specifies that the âcost of fulfillingâ a contract comprises the âcosts that relate directly to the contractâ. Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (for example, direct labour and materials) or an allocation of other costs that relate directly to fulfilling contracts (for example, an allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling that contract among others).

The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2022, although early adoption is permitted. The Company has evaluated the amendment and the impact is not expected to be material on its financial statements.

1.5. Significant Accounting PoliciesI. Revenue Recognition

The company derives revenues primarily from sale of goods comprising Cement, Engineering Job work, Power, Hospitality in the brand name of Mercure.

The company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects consideration which the entity expects to receive in exchange for those goods or services excluding the amount collected on behalf of the third parties.

Engineering job work can be either âmaterial cum serviceâ contracts or service contracts.

Performance obligation in case of âmaterial cum servicesâ is satisfied at a point in time. Consequently revenue is recognized when customer obtains control over promised goods and the entity has satisfied performance obligation. In case of âservice contractsâ revenue is recognized based on performances completed to date by using either âInput methodâ or âoutput methodâ as prescribed for measuring progress of performance obligation under IND AS 115.

The company accounts for Discount such as Quantity discounts, performance discounts and selling commission to dealers as a reduction from revenue based on target achievement by customer towards earning the discount/commission.

Trade receivables and contract balances: -

The company classifies the right to consideration in exchange for transferring control over goods or services either as a trade receivable or as contract asset. Trade Receivable is a right to consideration that is unconditional and contract assets is a right to consideration that is conditional on something other than passage of time.

Other income: -

a) Dividend income:- Dividend is recognized in statement of profit or loss only when the right to receive payment is established, it is probable that economic benefits associated with the dividend will flow to the company and the amount of dividend can be reliably measured.

b) Interest income:- Interest income is recognized as it accrues in the statement of profit or loss using effective interest rate.

II. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of that asset. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. Interest income earned on the temporary investment of specific borrowing is deducted from the borrowing cost eligible for capitalization. Borrowing costs also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

All other borrowing costs are charged to revenue in the period in which they are incurred.

III. Government Grants

Grants from government are recognized when there is a reasonable assurance that grant will be received, and the company will comply with all stipulated conditions.

Grants relating to revenue items will be presented separately as âOther incomeâ in statement of profit or loss or deducted in reporting the related expense.

Grants relating to assets are treated as deferred income under non-current liabilities and credited to statement of profit or loss on straight-line basis over the expected useful life of the related assets under other income.

IV. Employee Benefits

Employee benefits includes short term employee benefits, Post employment benefits, Other long term benefits and Termination benefits.

Short term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

Post employment benefits:-

a) Defined contribution plans: These benefits include Pension, superannuation and Employee State Insurance (ESI).

Entity contributes at statutorily prescribed minimum rates, monthly to Provident fund, ESI and will have no legal obligation to pay further contribution if fund doesnât have sufficient assets to pay all employee benefits relating to employee service in current and prior periods. Whereas yearly contribution is paid to Life insurance corporation towards superannuation Pension, monthly contributions are made in the case of Provident Fud and ESI. Thus, PF, Superannuation, ESI benefits are defined contribution plans. These contributions are recognized in statement of profit and loss by way of charge against income.

b) Defined benefits plans- Leave Absences and Gratuity

Cost of providing these benefits is determined using projected unit credit method by actuary at the end of each reporting period. It has two components, one is service cost and other is remeasurements. Service cost comprises a) current service cost including gains/ loss on curtailment or settlements, b) past service cost in case of plan amendment c) net Interest expense or income. Remeasurements comprise actuarial gains/losses, return on plan assets excluding interest and effect of change in assets ceiling. Service cost is recognized in statement of profit or loss while remeasurements are in other comprehensive income.

c) Defined benefits plans- Covid Death

Family of the employees who have died due to Covid are provided with monthly pension till the deemed superannuation date of the deceased employee,

by subscribing to the customized insurance policy through lumpsum payment to the insurer.

The Plan assets created by the insurer are remeasured at the end of accounting period for recognition of gain or loss through FVTPL.

V. Property, Plant And Equipment

a) Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and borrowings costs attributable to acquisition of qualifying property, plant and equipment up to the date the asset is ready for its intended use and initial estimate cost of decommissioning & restoring the site on which it is located.

Freehold land is not depreciated.

b) Construction Period Expenses on Projects:- All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

c) An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

d) Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives.

e) The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

f) The company follows the process of componentization for property, plant and equipment. Accordingly, the company has identified a part

of an asset as a separate component in whole asset value (beyond certain value) and useful life of the part is different from the useful life of the remaining asset. The useful life is assessed based on technical advice, taking into account the nature of the asset/component of an asset, the estimated usage of the asset /component of an asset on the basis of managementâs best estimation of getting economic benefits from those class of assets / components of an asset. The Company uses its technical expertise along with historical and industry trends for arriving the economic life of an asset/ component of an asset.

g) Machinery spares which can be used only in connection with a particular item of Fixed Assets and the use of which is irregular, are capitalized at cost.

h) Non current assets held for sale:- Assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. The determination of fair value less cost to sell includes use of management estimates and assumptions. Noncurrent assets and disposal group that cease to be classified as âHeld for saleâ shall be measured at the lower of carrying amount before the the noncurrent assets and disposal group was classified as âHeld for saleâ and the recoverable amount at the date of subsequent decision not to sell.

i) Tangible assets not ready for the intended use on the date of Balance Sheet are disclosed as âCapital work-in progressâ. Advances given towards acquisition /construction of fixed assets outstanding at each Balance Sheet date are disclosed as Capital Advances under âOther NonCurrent Assetsâ.

j) Developmental stripping cost: - Developmental stripping cost incurred in order to obtain access to quantities of mineral reserves that will be mined in future periods are capitalized as a part of mining assets. Capitalization of stripping cost ends when commercial production of mineral reserves begins.

VI. Mine closure, site restoration and decommissioning obligations:

An obligation for restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing extraction from mines.

The company recognises unavoidable obligations, legal or assumed, to restore the mines upon exhaustion of reserves/end of lease period whichever is earlier.

The obligation is estimated on the basis of cash flows expected to be incurred as per applicable mining regulations, which mainly includes cost of plantation, fencing, biodiversity management, sustainable development, rainwater harvesting, etc.

The estimate of expenses are escalated for inflation, and then discounted at a discount rate that reflects the current market assessment of the time value of money and the risks, such that the amount of provision reflects the present value of the expenditures expected to be required to be settle the obligation.

The company records a corresponding asset associated with the liability for final reclamation and mine closure. The obligation and corresponding assets are recognised in the period in which the liability is incurred. The asset representing the total site restoration cost as per mine closure plan is recognised as a separate item in PPE and amortised over the balance project/mine life.

The value of the provision is progressively increased over time as the effect of discounting unwinds creating an expense recognised as financial expenses.

Subsequent adjustments to the obligation for changes in the estimated cashflows/disbursement period/ discount rate are made against fixed assets and depreciation/amortisation is modified prospectively.

VII. Intangible Assets

An intangible asset is an identifiable non-monetary asset without physical substance. It is measured at the consideration paid for its acquisition and stated at the end of each year net of amortization and impairment. Intangible assets are amortized over their individual estimated lives of 4-7 years. Amortization methods and useful lives are reviewed at the end of financial year.

VIII. Investment Property

Investment properties are measured initially at cost, including transactions costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

Investment properties are de-recognized either when they have been disposed-off or when they are permanently withdrawn from use and no future

economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of de-recognition.

IX. Depreciation: -

Depreciation is provided in accordance with the useful life as prescribed under Part C of Schedule-II to the Companies Act, 2013 as follows: -

â¢ In respect of assets existing as on 30-6-1988,under the written down value method; and

â¢ In respect of assets acquired on or after 1-71988, under the straight-line method except for decommissioning cost.

Decommissioning cost is depreciated using depletion method.

Useful life for parts of Assets having significant cost, is assessed based on technical estimate which is different from the life given under the Schedule-II to The Companies Act, 2013, as given below.

No.	Description of the Asset	Estimated useful lives (Years)
1	Transformers	30
2	Economisers in Boilers in CPP; Turbine, Generators, sluice Gates, Switchgears and cables in Hydel plant	25
3	Electrical components like panels, Motors, Insulators which are components of plant and machinery	10
4	Economisers in Boilers and water preheater in Waste heat recovery plant; Evaporators in CPP	5

X. Financial Instrument Initial Recognition: -

The company recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instruments. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are directly measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities

that are not at fair value through profit or loss, are added to the fair value on initial recognition.

Subsequent Recognition & Classification: -Financial assets carried at amortized cost:

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the contractual terms of the financial asset gives rise on specified dates to cash flow that are solely payments of principal and interest on the principal outstanding.

Financial assets at fair value through other comprehensive income: A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial asset and contractual terms of the financial asset give rise on specified dates to cash flows that solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss: A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

Financial liabilities: Financial liabilities are subsequently carried at amortised cost using the effective interest method.

Impairment: -

The company recognizes loss allowances using the expected credit loss (ECL) model for financial assets and unbilled revenues which are not fair valued through profit or loss. Loss allowance for trade receivables and unbilled revenue with no significant finance component is measured at an amount equal to life time ECL using provision matrix as shown below. This estimation of ECL should consider past events, current conditions and reasonable & supportable forecasts.For all other financial assets, expected credit loss are measured at an amount equal to 12-month ECL unless there is significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.

The amount of expected credit loss (or reversal) that is required to adjust the loss allowance at the reporting date is recognized as impairment gain or loss in the statement of profit or loss.

De-recognition of financial instrument: -Financial assets:

A financial asset shall be derecognised when, and only when

â¢ the contractual rights to the cash flows from the financial asset expire, or

â¢ it transfers the financial asset and the transfer qualifies for de-recognition.

On de-recognition of a financial asset in its entirely, the difference between the carrying amount and the consideration received shall be recognised in profit or loss.

Financial Liabilities:

A financial liability shall be derecognised when, and only when, obligation specified in the contract is discharged or cancelled or expires. The difference between the carrying amount of a financial liability extinguished or transferred and consideration paid shall be recognised in profit or loss.

XI. Inventories

Inventories are valued at the lower of cost and estimated net realisable value (net of allowances) after providing for obsolescence and other losses, where considered necessary. The cost comprises cost of purchase, cost of conversion and other costs including appropriate production overheads in the case of finished goods and work-in-progress, incurred in bringing such inventories to their present location and condition. Trade discounts or rebates are deducted in determining the costs of purchase.Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. The cost net of taxes subsequently recoverable from tax authorities) of raw materials, stores & spares is determined on moving weighted average basis.

Stock of Scrap- Engineering Unit

â¢ Purchased scrap and internally generated scrap for use in production are both valued at weighted average cost of purchased scrap.

â¢ In respect of other scrap, the stock of scrap is not valued. As and when sales are made stocks are adjusted.

XII. Cash Flow Statement

Cash flows are reported using the indirect method, whereby the profit for the period is adjusted for the

effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions/banks, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Xiii. Foreign Currency

Functional currency: The functional currency of the company is Indian Rupee.

Transactions and translations: -Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction.

â¢ Foreign currency denominated monetary assets/ liabilities- are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in net profit in the statement of profit and loss.

â¢ Foreign currency denominated non-monetary assets/ non-liabilities are translated at the exchange rate prevalent at the date of the transaction.

â¢ Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise.

XIV. Investment In Subsidiaries And Joint Venture

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.

XV. Income Tax

Income tax expense comprises current and deferred

income tax. Income tax expense is recognized in the net profit in the statement of profit or loss except to the extent that it relates to items recognized in Other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no longer probable that related tax benefits will be realized.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Where the Company is entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure, the Company accounts for such allowances as tax credits, which means that the allowance reduce income tax payable and current tax expense. A deferred tax asset is recognized for unclaimed tax credits that are carried forward as deferred tax assets.

XVI. Earnings Per Share (Eps)

The companyâs Basic EPS is calculated by dividing profit or loss from continuing operations attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period as per IND AS-33.

The diluted EPS of an entity is calculated on the same basis as basic EPS, after adjusting for the effects of dilutive potential ordinary shares unless the effect of the potential dilutive equity shares is anti-dilutive.

XVII. Provisions, Contingent Liabilities And Contingent Assets

Provision:

A provision is recorded when the company has a present legal or constructive obligation as a result of past

events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated. Provisions will be reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision shall be reversed. The estimated liability for product warranties is recorded when products are sold based on technical evaluation. Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Provisions are discounted when time value of money is material. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expenses.

Contingent liabilities:

Contingent liability is recognised when it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

Onerous contracts:

Onerous contract is a contract in which the unavoidable cost of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Company estimates and provides provision at the lower of the following for onerous contracts.

a) Net Cost of fulfilling the contract; or

b) Compensation, penalties arising from the failure to fulfil it i.e. Cost of terminating the contract.

Contingent assets:

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. A contingent asset is disclosed when the inflow of economic benefit is probable.

XVIII. LEASES

The Companyâs lease asset consists of lease for Land, buildings and vehicles. The Company assesses whether a contract is or contains a lease, at inception of a

contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and

(iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and leases of low value assets.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straightline basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made.

A lease liability is re-measured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The re-measurement normally also adjusts the leased assets.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

XIX. SEGMENT REPORTING

The company publishes this financial statement along with the consolidated financial statements. In accordance with IND AS 108, Operating segments, the company has disclosed the segment information in the consolidated financial statements.

Mar 31, 2018

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

1. Company overview and significant accounting policies

1.1. Company overview

The KCP Limited (âthe companyâ) a public limited company incorporated and domiciled in India and has its registered office at Chennai. The securities of the company were listed in National Stock Exchange of India Limited.

The Company is engaged in the business of manufacture and sale of cement, heavy engineering, power generation for captive use and hospitality. The financial statements for the year ended March 31, 2018 were approved by the Board of Directors for issue on 28 th May, 2018.

1.2. Basis for preparation of financial statements

These financial statements are prepared in accordance with Indian Accounting Standards (IND AS) notified under section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016 and guidelines issued by the Securities and Exchange Board of India (SEBI).

Up to the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006, the Companies (Accounting Standards) Amendment Rules, 2016 and the relevant provisions of the Companies Act, 2013. These are the Company''s first Ind AS financial statements. The Date of transition to Ind AS is April 1, 2016. The company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 âFirst time adoption of Indian Accounting Standards''. The transition was carried out from Indian Accounting principles generally accepted in India, as prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliations and descriptions of the effect of the transition has been summarized.

The financial statement has been prepared on the historical cost convention under accrual basis of accounting except for certain financial assets and liabilities (as per the accounting policy below), which have been measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

I. USE OF ESTIMATES

The preparation of financial statements in conformity with the IND AS requires the management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future period. The application of Accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed below.

- Estimation of fair value of unlisted securities.

- Defined benefit obligation.

- Estimation of useful life of Property, Plant and Equipment.

- Estimation and evaluation of provisions and contingencies relating to tax litigations.

- Expected Credit Losses.

II. REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances rebates and amounts collected on behalf of third parties. It includes Excise Duty but excludes Value Added Tax, Sales Tax, and Goods and Services Tax (GST).

a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

b) Dispatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, with contracted sale prices.

c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

d) The revenue from sale of Renewable Energy credit is recognized on delivery thereof or sale of right therein, as the case may be, in terms of the contract with the buyers.

e) The revenue from sale of thermal power is recognized based on actual billing to the State Board at the end of each billing cycle.

f) Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of dividend can be reliably measured.

g) Other Income: Revenue in respect of other income are recognized when there is a reasonable certainty as to its realization.

III. BORROWING COST

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. Borrowing costs also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

All other borrowing costs are charged to revenue in the period in which they are incurred.

IV. GOVERNMENT GRANTS

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Grants related to revenue items are presented as part of profit or loss under general heading such as other income or they are deducted in reporting the related expenses.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the company with no future related costs are recognized in profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

V. EMPLOYEE BENEFITS

Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.

a) Defined Contribution Plans:

The Company''s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

b) Defined Benefit Plans:

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

- Net interest expense or income in Profit and Loss Statement and

- Re-measurement in other comprehensive income.

c) Provident fund and Employeesâ state insurance scheme:

Eligible employees of The KCP Limited receive benefits from a provident fund and employees'' state insurance scheme which is a defined contribution plan. Both the eligible employee and the company make monthly contributions to the provident fund and employees'' state insurance equal to a specified percentage of the covered employee''s salary.

d) Superannuation:

Certain employees of The KCP Limited are participants in a defined contribution plan. The company has no further obligations to the plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

e) Short-term employee benefits

f) Other long term employee benefits

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of the expected future payments to be made in respect of services provided by employee up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields of Government Bond at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

VI. PROPERTY, PLANT AND EQUIPMENT

TANGIBLE FIXED ASSETS

a) Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and borrowings costs attributable to acquisition of qualifying property, plant and equipment up to the date the asset is ready for its intended use and initial estimate of cost of decommissioning, dismantling and removing the item & restoring the site on which it is located . Freehold land is not depreciated.

b) Construction Period Expenses on Projects : All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

b) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

c) Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives.

d) The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

e) The company follows the process of componentization for property, plant and equipment. Accordingly, the company has identified a part of an asset as a separate component in whole asset value and useful life of the part is different from the useful life of the remaining asset. The useful life has been assessed based on technical advice, taking into account the nature of the asset / component of an asset, the estimated usage of the asset / component of an asset on the basis of management''s best estimation of getting economic benefits from those class of assets /components of an asset. The Company uses its technical expertise along with historical and industry trends for arriving the economic life of an asset/ component of an asset.

f) Machinery spares which can be used only in connection with a particular item of Fixed Assets and the use of which is irregular, are capitalized at cost.

g) Fixed assets retired from active use and held for disposal are stated at the lower of their net book value and net realizable value and are disclosed separately under âOther Current Assetsâ.

h) Tangible assets not ready for the intended use on the date of Balance Sheet are disclosed as âCapital work-in-progressâ. Advances given towards acquisition / construction of fixed assets outstanding at each Balance Sheet date are disclosed as Capital Advances under âOther Non-Current Assetsâ.

i) Stripping Costs:

Developmental stripping costs

Developmental stripping costs in order to obtain access to quantities of mineral reserves that will be mined in future periods are capitalized as part of mining assets. Capitalization of stripping costs ends when commercial production of mineral reserves begins.

INTANGIBLE ASSETS

Intangible assets are initially recorded at the consideration paid for acquisition and stated net of amortized value and impairment. Intangible assets are amortized over their individual estimated lives of 4-7 years. Amortization methods and useful lives are reviewed periodically in each financial year end.

INVESTMENT PROPERTY

The cost includes the cost of replacing parts. It also includes borrowing costs for long term construction projects if the recognition criteria are met. When significant parts of the property are required to be replaced at intervals, the company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognized in profit or loss as incurred.

Investment properties are de-recognized either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of de-recognition.

DEPRECIATION

Depreciation is provided in accordance with the useful life as prescribed under Part C of Schedule II to the Companies Act, 2013 as follows:-

- In respect of assets existing as on 30-6-1988, under the written down value method; and

- In respect of assets acquired on or after 1-71988, under the straight line method except for decommissioning cost. Decommissioning cost is depreciated using depletion method.

VII. IMPAIRMENT

a. Financial assets:

The company recognizes loss allowances using Expected Credit Loss (ECL) model for the financial assets which are not fair valued through Profit and Loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL.

For all other financial assets ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.

The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

b. Non-financial assets i.e. Intangible assets and Property, plant & equipment:

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount in the statement of Profit and loss. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. An impairment loss is reversed in the Statement of Profit and loss if there has been a change in the estimates used to determine the recoverable amount. Non-Financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of the each reporting period.

VIII. FINANCIAL INSTRUMENTS

a. Initial Recognition:

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instruments. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are directly measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities that are not at fair value through profit or loss, are added to the fair value on initial recognition.

b. Subsequent Recognition:

Financial assets carried at amortized cost

Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial asset and contractual terms of the financial asset give rise on specified dates to cash flows that solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

Financial liabilities:

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables measuring within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

c. De-recognition of financial assets and liabilities:

Financial assets:

A financial asset shall be derecognized when, and only when

- the contractual rights to the cash flows from the financial asset expire, or

- it transfer the financial asset and the transfer qualifies for de-recognition.

On de-recognition of a financial asset in its entirely, the difference between the carrying amount and the consideration received shall be recognized in profit or loss.

Financial Liabilities:

A financial liability shall be derecognized when, and only when, obligation specified in the contract is discharged or cancelled or expires. The difference between the carrying amount of a financial liability extinguished or transferred and consideration paid should be recognized in profit or loss.

IX. INVENTORIES

Inventories are valued at the lower of cost and estimated net realizable value (net of allowances) after providing for obsolescence and other losses, where considered necessary. The cost comprises cost of purchase, cost of conversion and other costs including appropriate production overheads in the case of finished goods and work-in-progress, incurred in bringing such inventories to their present location and condition. Trade discounts or rebates are deducted in determining the costs of purchase. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. The cost (net of taxes subsequently recoverable from tax authorities) of raw materials, stores & spares and traded goods is determined on moving weighted average basis.

Stock of Scrap - Engineering Unit

- Purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scarp.

- In respect of other scrap, the stock of scrap is not valued and adjusted. As and when sales are made stocks are adjusted.

X. CURRENT AND NON-CURRENT CLASSIFICATION

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

a) Cash or cash equivalent is treated as current, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. In respect of other assets, it is treated as current when it is:

- expected to be realized or intended to be sold or consumed in the normal operating cycle held primarily for the purpose of trading and

- expected to be realized within twelve months after the reporting period.

b) All other assets are classified as non-current.

c) A liability is treated as current when:

- it is expected to be settled in the normal operating cycle it is held primarily for the purpose of trading

- it is due to be settled within twelve months after the reporting period, or

- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

d) All other liabilities are classified as non-current.

e) Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

XI. CASH AND CASH EQUIVALENTS

XII. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby the profit for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

XIII. FOREIGN EXCHANGE TRANSACTIONS

Functional Currency of the company is Indian Rupee. These financial statements are presented in Indian Rupees, rounded off to Lakhs.

Transactions and translations:

Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year in determining net profit for the period.

- Foreign currency denominated monetary assets/ liabilities- are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in net profit in the statement of profit and loss.

- Foreign currency denominated non-monetary assets/ non-liabilities - are translated at the exchange rate prevalent at the date of the transaction.

- Exchange differences arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

XIV. INVESTMENT IN SUBSIDIARIES AND JOINT VENTURES

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.

XV. TAXES ON INCOME

Tax expense comprises of current and deferred taxes. The income tax expense (income) for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

a) The current income tax is the amount of income taxes payable in respect of the taxable profit (tax loss) for a period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities

b) Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

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

Where the Company''s entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure, the Company accounts for such allowances as tax credits, which means that the allowance reduce income tax payable and current tax expense. A deferred tax asset is recognized for unclaimed tax credits that are carried forward as deferred tax assets.

XVI. EARNING PER SHARE

The company''s Basic EPS is calculated by dividing profit or loss from continuing operations attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period as per IND AS-33, Earnings per Share.

XVII. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS Provision:

A provision is recorded when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated. The estimated liability for product warranties is recorded when products are sold based on technical evaluation.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Provisions are discounted when time value of money is material. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expenses.

Contingent liabilities:

Wherever there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because (a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (b) the amount of the obligation cannot be measured with sufficient reliability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.

Contingent assets:

Wherever there is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed when the inflow of economic benefit is probable.

XVIII) SEGMENT REPORTING:

Operating segments are defined as components of the entity for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance, the company''s chief operating decision maker is the Executive Chairman.

The company has identified business segments as reportable segments. The business segments comprise 1) Cement unit. 2) Engineering Unit. 3) Power Generation unit and 4) Hotel.

Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly attributable to each reporting segment have been allocated on the basis of associated revenue of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as un-allocable expenses.

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un-allocable. Property, Plant and equipment that are used interchangeably among segments are not allocated to reportable segments.

Mar 31, 2017

ENDED 31ST MARCH 2017 1. GENERAL

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, Companies (Accounting Standards) Amendment Rules, 2016 and the relevant provisions of the Companies Act, 2013.

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

2.1 PROPERTY, PLANT AND EQUIPMENT Tangible fixed assets

a) Property, Plant and Equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated at cost of acquisition or construction less accumulated depreciation / amortization and impairment losses, if any. The cost comprises the purchase price (net of Cenvat and VAT credit wherever applicable) and all costs directly attributable to acquisition until the property, plant and equipment are ready for use, as intended by management. Subsequent expenditures related to an item of tangible asset are added to its gross book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.

2.2 Intangible assets

Intangible assets are initially recorded at the consideration paid for acquisition and stated in the account each year net of amortized value. Intangible assets are amortized over their individual estimated lives of 4-7 years.

b) Machinery spares which can be used only in connection with a particular item of Fixed Assets and the use of which is irregular, are capitalized at cost.

c) Fixed assets retired from active use and held for disposal are stated at the lower of their net book value and net realizable value and are disclosed separately under âOther Current Assetsâ.

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

e) Tangible assets not ready for the intended use on the date of Balance Sheet are disclosed as âCapital work-in-progressâ. Advances given towards acquisition / construction of fixed assets outstanding at each Balance Sheet date are disclosed as Capital Advances under âLong Term Loans and Advancesâ.

Depreciation

Depreciation is provided in accordance with the useful life and rules prescribed under Schedule II to the Companies Act, 2013 as follows:-

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7-1988, under the straight line method.

Useful life for parts of Assets having significant cost, has been assessed based on technical estimate which is different from the life given under the Schedule II to the Companies Act, 2013 as given below:

2.3. Impairment of Assets

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever that carrying amount of the assets exceeds its recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.4. Leased Assets :

(A) Assets under Finance lease:

Assets acquired under finance lease arrangement on or after 01.04.2001 are recognized separately among the fixed assets, at the inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 - âAccounting for Leasesâ issued by The Institute of Chartered Accountants of India .

(B) Assets under Operating Lease :

Assets used by the Company as a lessee under operating lease agreement are not recognized in the Companyâs accounts. Lease payments under operating lease are charged to the profit and loss account on a systematic basis representative of the pattern of the benefit accruing to the Company from the use of the asset under operating lease.

2.5. Investments

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

2.6. Inventories

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap -

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. As and when sales made, stocks are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost using weighted average method except where the net realizable value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

2.7. Revenue Recognition

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Dispatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, with contracted sale prices.

(c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) The revenue from sale of Renewable Energy credit is recognized on delivery thereof or sale of right therein, as the case may be, in terms of the contract with the buyers.

(e) The revenue from sale of thermal power is recognized based on actual billing to the State Board at the end of each billing cycle .

(f) Dividend income is accounted as and when the right to receive arises.

(g) Other income - Revenue in respect of other incomes are recognized when there is a reasonable certainty as to its realisation.

2.8. Government grants

(i). Grants from government are recognized when there is reasonable assurance that the grant will be received and all attaching conditions will complied with.

(ii) Government grant relating to Specific fixed assets is shown as deduction from the gross value of the asset concerned in arriving at its book value.

(iii) Grants related to revenue items are presented under general heading such as âOther Operating Revenueâ or they are deducted in reporting the related expense.

2.9. Foreign Exchange Transactions

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized.

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortized over the term of the contract,

- Exchange differences on the contract are recognized as profit or loss in the period in which they arise.

2.10. Accounting for Derivatives

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

2.11. Employee benefits

a) Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Long Term Employee Benefits in respect of compensated absences, which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post Employment Benefits:

(i) Defined Contribution plans:

The companyâs employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/payable under the schemes are recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans:

The companyâs liability to gratuity of its eligible employees is funded under a Defined Benefit Plan with the Life Insurance Corporation of India. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method by Consulting Actuary. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/losses are credited/charged to the Profit and Loss account in each year.

2.12. Dividends

Dividends proposed and declared after the balance sheet date, but before the financial statements have been approved, are not recognized as a liability at the balance sheet date. Details of these dividends are, however, disclosed in the Notes to Accounts.

2.13. Borrowing cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

2.14. Expenditure during construction period

All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

2.15 Expenditure On Approved Research And Development Programme

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fixed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

2.16. Taxation

Provision is made for income tax liability estimated to arise on the taxable income for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- - Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss account.

2.17. Earnings Per Share (Eps)

The earnings considered in ascertaining the companyâs Basic EPS is the attributable net profit or loss to the equity shareholders as per AS-20 âEarnings Per Shareâ. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

2.18. Provisions/ Contingent Liabilities And Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized, but are disclosed in the notes on accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

2.19 Warranty claims

Companyâs liability for Warranty claims and Guarantee claims are accounted on accrual basis as per contracts, after adjusting the claims no longer required.

5.4 a ) Term loans from Bank of India, Bank of Baroda and Canara Bank for Cement plant at Muktyala are Secured by

Paripassu First Charge on the Fixed Assets, paripassu Second charge on the current assets and charge on the leasehold rights of the leased Lands of the Muktyala Cement Division. These loans are repayable in 28 Quarterly Installments of Rs. 726 lakhs each with effect from 30th June 2011.

b) The rate of interest and other terms of the above said loans are as follows:

Bank of Baroda - Sanctioned Loan of Rs.6500 lakhs at Interest Rate of Base Rate plus 1.50%, repayable in 28 Quarterly Installments of Rs.232 lakhs each.

Bank of India - Sanctioned Loan of Rs.9000 lakhs at Interest Rate of Base Rate plus 2.25%, repayable in 28 Quarterly Installments of Rs.322 lakhs each.

Canara Bank - Sanctioned Loan of Rs.4800 lakhs at Interest Rate of Base Rate plus 1.50%, repayable in 28 Quarterly Installments of Rs.172 lakhs each.

5.5 a) Term loan obtained from Indian Overseas Bank for Hotel project at Hyderabad is secured by First charge on the

land, building and other assets of the Hotel at Hyderabad.

b) The loan of Rs.4500 lakhs drawn is repayable in 28 quarterly installments of Rs. 1.61 crores each with last installment being Rs. 1.53 crores, with holiday period of 39 months which includes construction period of 15 months and 24 months of gestation period.

c) Additional Term loan of Rs.1473 lakhs drawn for the Project is repayable in 28 quarterly installments of Rs.0.53 crores each after holiday period of 18 months.

d) The rate of interest of both the loans is Base Rate plus margin 2%

e) First installment of repayment for both the loans commenced in May 2015.

5.6 a) Term Loan of Rs.1431 lakhs obtained from Bank of Baroda for the Cement Plant Macherla is secured by the

First Charge on the fixed Assets (both present and proposed out of the loan) and second charge on the current assets of the Cement Division at Macherla. The loan is repayable in 28 Quarterly Installments of Rs. 75 lakhs each with an initial moratorium peroid of two years from the date of first disbursement. Repayments started from November 2014.

b) The rate of interest of the abovesaid loan is Base Rate plus 2%

5.7 a) Term Loan obtained from Canara Bank for the Captive Power Plant Muktyala is secured by the First Charge

on the fixed Assets of that Division. The loan is repayable in 32 Quarterly Installments of Rs 249 lakhs each with the last installment being Rs 245 lakhs with an initial moratorium peroid of two years from the date of first disbursement. First installment of Repayment commenced in Marchâ2015.

b) The rate of interest of the above said loan is Base Rate plus 1.75%

5.8 a) Term Loan of Rs.1200 lakhs obtained from HDFC Bank for working capital and business operations is secured by Equitable Mortgage on properties at Visakhapatnam, Mumbai and Hyderabad. The rate of interest of this loan is Base Rate plus 2.75%.

b) The Company has pre-paid Rs.1000 lakhs of loan amount ahead of repayment schedule in the previous year.

c) The balance loan has been re-paid fully during the current year as per revised payment schedule.

5.9 a) Term Loan of Rs.5600 lakhs obtained from Bank of India for shoring up working capital is secured by exclusive charge on land near Chennai.

b) The rate of interest of the above said loan is Base Rate plus 2.25%

c) This loan is repayable in 20 quarterly installments of Rs.280 lakhs each after 2 years moratorium.

d) First installment of repayment commenced in June 2016.

5.10 a) Term Loan of Rs.4000 lakhs obtained from Bank of Baroda for shoring up working capital is secured by exclusive charge on Hydel Division assets and property at Chennai. The rate of interest of the above said loan is Base Rate plus 2.25%

b) This loan is repayable in 20 quarterly installments of Rs.200 lakhs each after 2 years moratorium.

c) Durng the previous year, the Company has pre-paid Rs.8 crores of loan amount ahead of repayment schedule.

d) First installment of repayment commenced in January 2017.

5.11 a) Term Loan of Rs.35400 lakhs obtained from State Bank of India for Cement Capacity Expansion and Railway

Siding at Muktyala is secured by pari-passu charge on Land at Muktyala and exclusive Charge on the Project Assets.

b) The rate of interest of the above said loan is MCLR plus 0.65%

c) This loan is repayable in 32 quarterly installments after 2 years moratorium.

5.12 Details of deposits held by Directors of the company

Mar 31, 2016

1. GENERAL

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting
standards notified under the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act,
2013.

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

2.1 FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight,
duties, and taxes, incidental expenses relating thereto, interest on direct borrowals up to commissioning, wherever applicable,
and the cost of installation/erection, as applicable. CEN VAT availed, if any, on Fixed Assets, is deducted from the cost of such
Fixed Assets capitalized.

2.2 LEASED ASSETS :

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under finance lease arrangement on or after 01.04.2001 are recognized separately among the fixed assets, at the
inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof.
Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 â "Accounting for
Leases" issued by The Institute of Chartered Accountants of India .

(B) ASSETS UNDER OPERATING LEASE :

Assets used by the Company as a lessee under operating lease agreement are not recognized in the Company''s accounts. Lease
payments under operating lease are charged to the Profit and loss account on a systematic basis representative of the pattern of
the benefit accruing to the Company from the use of the asset under operating lease.

2.3. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term
investments are valued at Cost or Fair value whichever is lower.

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap â

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at
average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when

made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realizable
value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement
cost of such materials etc., is less than their book values, they are valued at replacement cost.

2.5. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Dispatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically
evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by
the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) The revenue from sale of Renewable Energy credit is recognized on delivery thereof or sale of right therein, as the case may
be, in terms of the contract with the respective buyers.

(e) The revenue from sale of thermal power is recognized based on actual billing to the State Board at the end of each billing
cycle .

(f) Dividend income is accounted as and when the right to receive arises.

(g) Other income â Revenue in respect of other incomes are recognized when there is a reasonable certainty as to its realization.

2.6. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and
adjusted appropriately with the

difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortized over the term of the contract,

- Exchange differences on the contract are recognized as Profit or loss in the period in which they arise

2.7. ACCOUNTING FOR DERIVATIVES

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates. The objective of these
derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

2.8. EMPLOYEE BENEFITS

a) Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the
year in which the related service is rendered.

b) Long Term Employee Benefits i.e. such benefits which do not fall due wholly within twelve months after the end of the period
in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in
which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post Employment Benefits:

(i) Defined Contribution plans:

The company''s employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance
scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/payable under
the schemes are recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans:

The company''s liability to gratuity on retirement of its eligible employees is funded under a Defined Benefit Plan with the Life
Insurance Corporation of India. The present value of the obligation under such defined benefit plan is determined based on
actuarial valuation using the Projected Unit Credit Method by Consulting Actuary. The incremental expense thereon for each year
is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the
employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net
basis.

d) Actuarial Gains/losses are charged to the Profit and Loss account immediately in each year.

2.9. DEPRECIATION

Depreciation is provided in accordance with the useful life and rules prescribed under Schedule II to the Companies Act, 2013, as
follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7-1988, under the straight line method.

Useful life for parts of Assets having significant cost, has been assessed based on technical estimate which is different from
the life given under the Schedule II to the Companies Act, 2013 as given below.

2.10. IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based
on internal/external factors. An impairment loss is recognized wherever that carrying amount of the assets exceeds its
recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss
recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.11. WARRANTY CLAIMS

Company''s liability for Warranty claims and Guarantee claims are accounted on accrual basis as per contracts, after adjusting the
claims no longer required.

2.12. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors,
pending approval of the shareholders at the Annual General Meeting. Income Tax on dividend payable is provided for in the year to
which such dividends relate.

2.13. BORROWING COST

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are
capitalized as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

2.14. EXPENDITURE DURING CONSTRUCTION PERIOD

All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are
allocated to capital cost of respective assets/ capital work in progress.

2.15 EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fixed assets and
other expenditure is charged off to revenue in the year in which such expenditure is incurred.

2.16. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in
accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is

accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is
virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other
temporary timing differences are recognized only if there is a reasonable certainty of realization

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss

2.17. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the company''s Basic EPS is the attributable net Profit or loss to the equity shareholders
as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares
outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of
potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

2.18. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a
result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized,
but are disclosed in the notes on accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

2.19 GOVERNMENT GRANTS

(i) Grants from government are recognized when there is reasonable assurance that the grant will be received and all attaching
conditions will be complied with.

(ii) Government grant relating to Specific fixed assets is shown as deduction from the gross value of the asset concerned in
arriving at its book value.

(iii) Grants related to revenue items are presented under general heading such as "Other Operating Revenue" or they are deducted
in reporting the related expense.

3.1) Details of shareholders holding more than 5% share in the company:

1. M/s. V. Ramakrishna Sons Pvt Ltd - 3,89,56,326 (3,89,56,326) Equity shares of Re.1/- each fully paid - 30.22% (30.22%)

2. M/s. V.R.K. Grandsons Investments Pvt Ltd - 95,78,330 (95,78,330) Equity shares of Re.1/- each fully paid- 7.43% (7.43%)

3 SBI Emerging Business Fund - 34,35,000 (92,93,792) Equity shares of Re.1/- each fully paid up 2.66% (7.21%)

5.4) a ) Term loans from banks for Cement plant at Muktyala are Secured by Paripassu First Charge on the Fixed Assets, paripassu
Second charge on the current assets and charge on the leasehold rights of the leased Lands of the Muktyala Cement Plant. The rate
of interest of the above said loan ranges between Base Rate plus margin 2%to 3%.

b) The long Terms loans obtained for Cement Plant at Muktyala are repayable in 28 Quarterly Installments of Rs.7.26 crores each
with effect from 30th June 2011.

5.5) a) Term loan obtained for Hotel project at Hyderabad is secured by First charge on the land, building and other

assets of the company at Somajiguda Hyderabad. The rate of interest of the above said loan is Base Rate plus margin 2%

b) The long term loan obtained for Hotel project is repayable in 28 quarterly installments of Rs. 1.61 crores with last
instilment being Rs.1.53 crores with holiday period of 39 months which includes construction period of 15 months and 24 months of
gestation period.

c) Additional Term loan of Rs.14.73 crores obtained for Hotel Project is repayable in 28 quarterly installments of Rs.0.53 crores
after holiday period of 18 months.

d) First installment of repayment for Hotel project commenced in May 2015.

5.6) a) Term Loan obtained for the Captive Power Plant Muktyala is secured by the First Charge on the fixed Assets

of the Captive Power Plant Muktyala. The rate of interest of the above said loan is Base Rate plus margin 1.75%.

b) The long Terms loans obtained for the Captive Power Plant Muktyala are repayable in 32 Quarterly Installments of Rs 2.49
crores with the last instilment being Rs 2.45 crores each with an initial moratorium period of two years from the date of first
disbursement. First installment of Repayment commenced in March''2015.

5.7) a) Term Loan obtained for the Cement Plant Macherla is secured by the First Charge on the fixed Assets (both

present and proposed out of the loan) and second charge on the current assets of the Cement Division at Macherla. The rate of
interest of the above said loan is Base Rate plus margin 2%.

b) The long Terms loans obtained for Cement Plant at Macherla are repayable in 28 Quarterly Installments of Rs 0.75 crores each
with an initial moratorium period of two years from the date of first disbursement. Repayments started from November 2014.

5.8) a) Term Loan of Rs.12 crores obtained for working capital and business operations is secured by Equitable

Mortgage on properties at Visakhapatnam, Mumbai and Hyderabad. The rate of interest of this loan is Base Rate plus margin 2%.

b) During the year, the Company has pre-paid Rs.10 crores of loan amount ahead of repayment schedule.

c) The balance loan is repayable in 4 equal half yearly installments of Rs.0.50 crores from June, 2015.

5.9) a) Term Loan of Rs.56 crores obtained for shoring up working capital is secured by Exclusive charge on land

near Chennai. The rate of interest of the above said loan is Base Rate plus margin 2%

b) This loan is repayable in 20 quarterly installments of Rs.2.80 crores after 2 years moratorium. First Installment of Repayment
falls due in June, 2016.

5.10) a) Term Loan of Rs.40 crores obtained for shoring up working capital is secured by Exclusive charge on Hydel

Division assets and property at Chennai. The rate of interest of the above said loan is Base Rate plus margin 2.25%

b) This loan is repayable in 20 quarterly installments of Rs.2 crores after 2 years moratorium. First instilment falls due in May
2017.

c) During the year, the Company has pre-paid Rs.8 crores of loan amount ahead of repayment schedule.

A). List of Related parties

Subsidiary Company KCP Vietnam Industries Limited

Joint Venture Company Fives Cail KCP Limited

Key Managerial Personnel Dr. VL. Dutt - Chairman and Managing Director

Smt. VL. Indira Dutt - Joint Managing Director Smt. Kavitha D Chitturi - Executive Director Sri V.Gandhi - Technical Director
Sri. G. N. Murty - Chief Financial Officer Sri. Y. Vijaya Kumar - Company Secretary

Relatives of Key Managerial Personnel Dr. V.L. Dutt -

Smt. Rajeswary Ramakrishanan - Sister

Smt. V.L. Indira Dutt -

Smt. S.R.V Rajyalakshmamma - Mother Sri. V Chandra Kumar - Brother Smt. Uma S Vallabhaneni - Sister Smt.V Rama Kumari - Sister

Smt. Kavitha D Chitturi -

Kum.Shivani Dutt Chitturi - Daughter Sri. Ravi Chitturi - Husband

Sri. V.Gandhi -

Smt. V Kamala Devi - Wife Sri. V Praveen Kumar - Son Smt. V Anupama - Daughter

Companies/Trusts controlled by Key KCP Technologies Limited

Managerial Personnel/Relatives V. Ramakrishna Sons Private Limited

The Jeypore Sugar Company Ltd. VRK Grandsons Investment (P) Limited BGE Engineering (India) Private Limited V Ramakrishna
Charitable Trust A Trust in the name of Bala Tripurasundari Ammavaru Fives Combustion Systems Pvt.Ltd

Mar 31, 2014

1.1 FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation. Cost of acquisition of fi xed assets is inclusive of freight, duties, and taxes, incidental expenses relating thereto, interest on direct borrowals upto commissioning, wherever applicable, and the cost of installation/erection, as applicable. CENVAT availed, if any, on Fixed Assets, is not included in the Cost of such Fixed Assets capitalised.

1.2 LEASED ASSETS :

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under finance lease arrangement on or after 01.04.2001 are recognised separately among the fixed assets, at the inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 Â "Accounting for Leases" issued by The Institute of Chartered Accountants of India .

(B) ASSETS UNDER OPERATING LEASE :

Assets used by the Company as a lessee under operating lease agreement are not recognised in the Company''s accounts. Lease payments under operating lease are charged to the profi t and loss account on a systematic basis representative of the pattern of the benefi t accruing to the Company from the use of the asset under operating lease.

1.3. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

1.4. INVENTORIES

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap Â

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realisable value of the fi nished goods they are used in is less than the cost of fi nished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

1.5. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Despatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) The revenue from sale of Renewable Energy credit is recognised on delivery thereof or sale of right therein, as the case may be, in terms of the contract with the respective buyers.

(e) Dividend income is accounted as and when the right to receive arises.

(f) Other income Â Revenue in respect of other incomes are recognised when there is a reasonable certainty as to its realisation.

1.6. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortised over the term of the contract,

- Exchange differences on the contract are recognized as profi t or loss in the period in which they arise

1.7. ACCOUNTING FOR DERIVATIVES

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

1.8. EMPLOYEE BENEFITS

a) Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Long Term Employee Benefits i.e. such benefi ts which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profi t and Loss Account in the year in which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post Employment Benefits:

(i) Defined Contribution plans:

The company''s employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/ payable under the schemes are recognized during the period in which the employee renders the related service.

(ii) Defi ned Benefit plans:

The company''s liability to gratuity on retirement of its eligible employees is funded under a Defined Benefit Plan with the Life Insurance Corporation of India. The present value of the obligation under such defi ned benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/losses are charged to the Profit and Loss account immediately in each year.

1.9. DEPRECIATION

Depreciation is provided in accordance with the rates and rules prescribed under Schedule XIV to the Companies Act, 1956, as follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7- 1988, under the straight line method.

1.10. IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever that carrying amount of the assets exceeds its recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.11. WARRANTY CLAIMS

Company''s liability for Warranty claims and Guarantee claims are accounted on acrual basis as per contracts, after adjusting the claims no longer required.

1.12. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors, pending approval of the shareholders at the Annual General Meeting. Income Tax on dividend payable is provided for in the year to which such dividends relate.

1.13. BORROWING COST

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

1.14. EXPENDITURE DURING CONSTRUCTION PERIOD:

All identifi able revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

1.15. EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fi xed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

1.16. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss account.

1.17. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the company''s Basic EPS is the attributable net profi t or loss to the equity shareholders as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

1.18. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfl ow of resources. Contingent liabilities are not recognised, but are disclosed in the notes on accounts. Contingent assets are neither recognised nor disclosed in the fi nancial statements.

1.19 GOVERNMENT GRANTS

(i). Grants from government are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will complied with.

(ii) Government grants relating to Specifi c fi xed assets is shown as deduction from the gross value of the asset concerned in arriving at its book value.

(iii) Grants related to revenue items are presented under general heading such as "Other Income" or they are deducted in reporting the related expense.

Mar 31, 2013

1.1 FIXED ASSETS

Fixed assets are stated at cost, less accumu- lated depreciation. Cost of acquisition of fi xed assets is inclusive of freight, duties, and taxes, incidental expenses relating thereto, interest on direct borrowals upto commissioning, wherever applicable, and the cost of installation/erection, as applicable. CENVAT availed, if any, on Fixed Assets, is not included in the Cost of such Fixed Assets capitalised.

1.2 LEASED ASSETS :

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under fi nance lease arrange- ment on or after 01.04.2001 are recognised separately among the fi xed assets, at the incep- tion of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 Â "Accounting for Leases" issued by The Institute of Chartered Accountants of India .

(B) ASSETS UNDER OPERATING LEASE :

Assets used by the Company as a lessee under operating lease agreement are not recognised in the Company''s accounts. Lease payments under operating lease are charged to the Statement of Profi t and Loss on a systematic basis representa- tive of the pattern of the benefi t accruing to the Company from the use of the asset under operat- ing lease.

1.3. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than tem- porary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

1.4. INVENTORIES

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap Â

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realisable value of the fi nished goods they are used in is less than the cost of fi nished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

1.5. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Despatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the power units of the Company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) Dividend income is accounted as and when the right to receive arises.

(e) Other income - Revenue in respect of other incomes are recognised when there is a reasonable certainty as to its realisation.

1.6. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortised over the term of the contract,

- Exchange differences on the contract are recognized as profi t or loss in the period in which they arise

1.7. ACCOUNTING FOR DERIVATIVES

The Company uses derivative instruments to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

1.8. EMPLOYEE BENEFITS

a) Short Term Employee Benefi ts are recognized as an expense at the undiscounted amount in the Statement of Profi t and Loss of the year in which the related service is rendered.

b) Long Term Employee Benefi ts i.e. such benefi ts which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Statement of Profi t and Loss in the year in which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post Employment Benefi ts:

(i) Defi ned Contribution plans:

The company''s employees are covered under Superannuation Schemes, state governed Provident Fund Scheme, Employee State Insurance Scheme and Employee Pension Scheme, which are in the nature of Defi ned Contribution Plans. The contributions paid/ payable under the Schemes are recognized during the period in which the employee renders the related service.

(ii) Defi ned Benefi t plans:

The company''s liability to gratuity on retirement of its eligible employees is funded under a Defi ned Benefi t Plan with the Life Insurance Corporation of India. The present value of the obligation under such defi ned benefi t plan is determined based on actuarial valuation using the Projected Unit Credit Method. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Statement of Profi t and Loss in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/Losses are charged to the Statement of Profi t and Loss immediately in each year.

1.9. DEPRECIATION

Depreciation is provided in accordance with the rates and rules prescribed under Schedule XIV to the Companies Act, 1956, as follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7-1988, under the straight line method.

1.10. IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on inter- nal/external factors. An impairment loss is rec- ognised wherever that carrying amount of the assets exceeds its recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impair- ment loss recognised in prior accounting period is reversed if there has been a change in the esti- mate of recoverable amount.

1.11. WARRANTY CLAIMS

Company''s liability for Warranty claims and Guarantee claims are accounted on acrual basis as per contracts, after adjusting the claims no lon- ger required.

1.12. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors, pending approval of the Shareholders at the Annual General Meeting. Income Tax on dividend payable is provided for in the year to which such dividends relate.

1.13. BORROWING COST

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrow- ing costs are charged to revenue in the period in which they are incurred.

1.14. EXPENDITURE DURING CONSTRUCTION PERIOD:

All identifi able revenue expenses including inter- est on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

1.15. EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capi- tal nature is included in the fi xed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

1.16. TAXATION

Provision is made for income tax liability esti- mated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Statement of Profi t and Loss.

1.17. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company''s Basic EPS is the attributable net profi t or loss to the Equity Shareholders as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive Equity Shares unless the effect of the potential dilutive Equity Shares is anti-dilutive.

1.18. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfl ow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes on accounts. Contingent Assets are neither recognised nor disclosed in the fi nancial statements.

1.19 GOVERNMENT GRANTS

(i). Grants from Government are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will complied with.

(ii) Government grants relating to Specifi c fi xed assets is shown as deduction from the gross value of the asset concerned in arriving at its book value.

(iii) Grants related to revenue items are presented under general heading such as "Other Income" or they are deducted in reporting the related expense.

Mar 31, 2012

1.1 FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, and taxes, incidental expenses relating thereto, interest on direct borrowals up to commissioning, wherever applicable, and the cost of installation/erection, as applicable. CENVAT availed, if any, on Fixed Assets, is not included in the Cost of such Fixed Assets capitalised.

1.2 LEASED ASSETS :

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under finance lease arrangement on or after 01.04.2001 are recognised separately among the fixed assets, at the inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 - "Accounting for Leases" issued by The Institute of Chartered Accountants of India .

(B) ASSETS UNDER OPERATING LEASE :

Assets used by the Company as a lessee under operating lease agreement are not recognised in the Company's accounts. Lease payments under operating lease are charged to the profit and loss account on a systematic basis representative of the pattern of the benefit accruing to the Company from the use of the asset under operating lease.

1.3. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

1.4. INVENTORIES

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap -

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realisable value of the finished goods they are used in, is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

1.5. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Despatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) Dividend income is accounted as and when the right to receive arises.

(e) Other income - Revenue in respect of other incomes are recognised when there is a reasonable certainty as to its realisation.

1.6. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortised over the term of the contract,

- Exchange differences on the contract are recognized as profit or loss in the period in which they arise

1.7. ACCOUNTING FOR DERIVATIVES

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

1.8. EMPLOYEE BENEFITS

a) Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Long Term Employee Benefits i.e. such benefits which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post Employment Benefits:

(i) Defined Contribution plans:

The company's employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/ payable under the schemes are recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans:

The company's liability to gratuity on retirement of its eligible employees is funded under a Defined Benefit Plan with the Life Insurance Corporation of India. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/losses are charged to the Profit and Loss account immediately in each year.

1.9. DEPRECIATION

Depreciation is provided in accordance with the rates and rules prescribed under Schedule XIV to the Companies Act, 1956, as follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7- 1988, under the straight line method.

1.10. IMPAIRMENT OF ASSETS:

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever that carrying amount of the assets exceeds its recoverable amounts.

The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.11. WARRANTY CLAIMS

Company's liability for Warranty claims and Guarantee claims are accounted on acrual basis as per contracts, after adjusting the claims no longer required.

1.12. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors, pending approval of the shareholders at the Annual General Meeting. Income Tax on dividend payable is provided for in the year to which such dividends relate.

1.13. BORROWING COST

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

1.14. EXPENDITURE DURING CONSTRUCTION PERIOD:

All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

1.15. EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fixed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

1.16. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss account.

1.17. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the company's Basic EPS is the attributable net profit or loss to the equity shareholders as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

1.18. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement 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. Contingent liabilities are not recognised, but are disclosed in the notes on accounts. Contingent assets are neither recognised nor disclosed in the financial statements.

1.19 GOVERNMENT GRANTS

(i). Grants from government are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with.

(ii) Government grants relating to assets are recognised in the proportion in which the amortisation of such assets is charged and are netted off against the amortisation on such assets

(iii) Grants related to depreciable assets are treated and disclosed as deferred income which is recognised in Statement of Profit and loss over the periods and in the proportion in which depreciation on related asset is charged

Mar 31, 2011

1. GENERAL

Financial statements are prepared under the historical cost convention and in accordance with generally accepted accounting practices.

2. FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation. Cost of acquisition of fi xed assets is inclusive of freight, duties, and taxes, incidental expenses relating thereto, interest on direct borrowals upto commissioning, wherever applicable, and the cost of installation/erection, as applicable. CENVAT availed, if any, on Fixed Assets, is not included in the Cost of such Fixed Assets capitalised.

3. LEASED ASSETS

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under fi nance lease arrangement on or after 01.04.2001 are recognised separately among the fi xed assets, at the inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 Ã "Accounting for Leases" issued by The Institute of Chartered Accountants of India.

(B) ASSETS UNDER OPERATING LEASE:

Assets used by the Company as a lessee under operating lease agreement are not recognised in the Companys accounts. Lease payments under operating lease are charged to the Profit and loss account on a systematic basis representative of the pattern of the benefit accruing to the Company from the use of the asset under operating lease.

4. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

5 INVENTORIES

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap -

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realisable value of the fi nished goods they are used in is less than the cost of fi nished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

6. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Despatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the power units of the company, sold to its other units is accounted at the tariff rates charged by the State Electricity Boards. Such earnings are adjusted to the power charges.

(d) Dividend income is accounted as and when the right to receive arises.

(e) Other income - Revenue in respect of other incomes are recognised when there is a reasonable certainty as to its realisation.

7. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortised over the term of the contract,

- Exchange differences on the contract are recognized as Profit or loss in the period in which they arise

8. ACCOUNTING FOR DERIVATIVES

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

9. EMPLOYEE BENEFITS

a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Long Term Employee benefits i.e. such benefits which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

- Liability as at the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post-Employment benefits:

(i) Defined Contribution plans: The

companys employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/ payable under the schemes are recognized during the period in which the employee renders the related service.

(ii) Defined benefit plans:

The companys liability to gratuity on retirement of its eligible employees is funded under a Defined benefit Plan with the Life Insurance Corporation of India. The present value of the obligation under such Defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/losses are charged to the Profit and Loss account immediately in each year.

10. DEPRECIATION

Depreciation is provided in accordance with the rates and rules prescribed under Schedule XIV to the Companies Act, 1956, as follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7- 1988, under the straight line method.

11. IMPAIRMENT OF ASSETS

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever that carrying amount of the assets exceeds its recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

12. WARRANTY CLAIMS

Companys liability for Warranty claims and Guarantee claims are accounted on acrual basis as per contracts, after adjusting the claims no longer required.

13. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors, pending approval of the shareholders at the Annual General Meeting. Income Tax on dividend payable is provided for in the year to which such dividends relate.

14. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

15. EXPENDITURE DURING CONSTRUCTION PERIOD

All identifi able revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

16. EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fi xed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

17. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is

accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss account.

18. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the companys Basic EPS is the attributable net Profit or loss to the equity shareholders as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

19. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfl ow of resources. Contingent liabilities are not recognised, but are disclosed in the notes on accounts. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2010

1. GENERAL

Financial statements are prepared under the historical cost convention and in accordance with generally accepted accounting practices.

2. FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, and taxes, incidental expenses relating thereto, interest on direct borrowals upto commissioning, wherever applicable, and the cost of installation/erection, as applicable. CENVAT availed, if any, on Fixed Assets, is not included in the Cost of such Fixed Assets capitalised.

3. LEASED ASSETS

(A) ASSETS UNDER FINANCE LEASE:

Assets acquired under finance lease arrangement on or after 01.04.2001 are recognised separately among the fixed assets, at the inception of the lease at lower of their fair value or the present value of minimum lease payments in respect thereof. Depreciation and lease charges on such assets are accounted for, in accordance with the Accounting Standard-19 - "Accounting for Leases" issued by The Institute of Chartered Accountants of India.

(B) ASSETS UNDER OPERATING LEASE:

Assets used by the Company as a lessee under operating lease agreement are not recognised in the Companys accounts. Lease payments under operating lease are charged to the profit and loss account on a systematic basis representative of the pattern of the benefit accruing to the Company from the use of the asset under operating lease.

4. INVESTMENTS

Investments (Long Term) are stated at cost less provision for diminution in value other than temporary, if any. Short term investments are valued at Cost or Fair value whichever is lower.

5 INVENTORIES

(a) Finished goods are valued at cost or market value, whichever is lower.

(b) Stock of scrap -

i. In respect of Engineering Unit, purchased scrap and internally generated scrap for use in production are both valued at average cost of purchased scrap.

ii. In respect of other scrap, the stock of scrap is not valued and adjusted. Sales, as and when made, are adjusted.

(c) Work-in-Progress, raw materials, stores, spares, material in transit, are valued at cost except where the net realisable value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than their book values, they are valued at replacement cost.

6. SALES AND OTHER EARNINGS

(a) Sales and service earnings are inclusive of excise duty, service tax, freight, insurance etc. recovered thereon.

(b) Despatches from Engineering Unit are in completely knocked down condition and are invoiced at the appropriate technically evaluated values, which are matched with contracted sale prices.

(c) Electricity generated by the Power generation units of the Company sold to its other units is accounted at the tariff rates charged by the State Electricity Board. Such earnings are adjusted to the power charges.

(d) Dividend income is accounted as and when the right to receive arises.

(e) Other income - Revenue in respect of other incomes are recognised when there is a reasonable certainty as to its realisazation.

7. FOREIGN EXCHANGE TRANSACTIONS

A) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately with the difference in the rate of exchange arising on actual receipt/payment during the year.

B) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

C) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortised over the term of the contract,

- Exchange differences on the contract are recognized as profit or loss in the period in which they arise

8. ACCOUNTING FOR DERIVATIVES

The company uses derivative instruments to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is only to reduce the risk or cost to the company and is not intended for trading or speculation purposes.

9. EMPLOYEE BENEFITS

a) Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b) Long Term Employee Benefits i.e. such benefits which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, are recognized as follows

- Expense is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

- Liability as ai the date of each Balance Sheet is arrived at and recognized therein as per actuarial valuation.

c) Post-Employment Benefits:

(i) Defined Contribution plans: The companys employees are covered under superannuation schemes, state governed provident fund scheme, employee state insurance scheme and employee pension scheme, which are in the nature of Defined Contribution Plans. The contributions paid/payable under the schemes are recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans:

The companys liability to gratuity on retirement of its eligible employees is funded under a Defined Benefit Plan with the Life Insurance Corporation of India. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

The fair value of the plan assets and the gross plan obligation, under the said plan, are recognized in each Balance Sheet on net basis.

d) Actuarial Gains/losses are charged to the Profit and Loss account immediately in each year.

10. DEPRECIATION

Depreciation is provided in accordance with the rates and rules prescribed under Schedule XIV to the Companies Act, 1956, as follows:--

i. In respect of assets existing as on 30-6-1988, under the written down value method: and

ii. In respect of assets acquired on or after 1-7- 1988, under the straight line method.

11. IMPAIRMENT OF ASSETS

The carrying amount of assets are reviewed at each Balance sheet date to assess, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever that carrying amount of the assets exceeds its recoverable amounts. The recoverable amount is the greater of the assets net selling price and value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

12. WARRANTY CLAIMS

Companys liability for Warranty claims and Guarantee claims are accounted on acrual basis as per contracts, after adjusting the claims no longer required.

13. DIVIDENDS

Provision is made in the accounts for the dividends paid / payable by the Company as recommended by the Board of Directors, pending approval of the shareholders at the Annual General Meeting.

Income Tax on dividend payable is provided for in the year to which such dividends relate.

14. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset. 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 charged to revenue in the period in which they are incurred.

15. EXPENDITURE DURING CONSTRUCTION PERIOD

All identifiable revenue expenses including interest on term loans incurred in respect of various projects/ expansions are allocated to capital cost of respective assets/ capital work in progress.

16. EXPENDITURE ON APPROVED RESEARCH AND DEVELOPMENT PROGRAMME

In respect of approved Research and Development Programme, expenditure of capital nature is included in the fixed assets and other expenditure is charged off to revenue in the year in which such expenditure is incurred.

17. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

- Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

- Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

- MAT Credit Entitlement as per the provisions of Income Tax Act, 1961, is treated as an asset by credit to the Profit and loss account.

18. EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the companys Basic EPS is the attributable net profit or loss to the equity shareholders as per AS-20 "Earnings Per Share". The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

19. PROVISIONS/ CONTINGENT LIABILITIES AND ASSETS

Provisions involving substantial degree of estimation in measurement 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. Contingent liabilities are not recognised, but are disclosed in the notes on accounts. Contingent assets are neither recognised nor disclosed in the financial statements.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article