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Accounting Policies of Mangalam Cement Ltd. Company

Mar 31, 2017

1. Corporate Information

Mangalam Cement Limited (MCL) is a public limited company domiciled and incorporated in India and its shares are publicly traded on the National Stock Exchange (''NSE'') and the Bombay Stock Exchange (''BSE''), in India. The registered office of MCL, Aditya Nagar Morak -326520, Kota (Rajasthan). The Company is principally engaged in manufacturing of Cement in India. These financial statements are prepared in Indian rupees.

The financial statements were approved and adopted by board of directors of the Company in their meeting held on 13th May 2017.

2. Basis of preparation Compliance with Ind AS

The financial statements have been prepared in accordance with all material respects with the accounting standards (Ind AS) as per Companies (Indian Accounting Standard Rules), 2015 notified under section 133 of Companies Act 2013 and Companies (Indian Accounting Standard) Amendment Rules 2016 and other relevant provisions of the Companies Act, 2013.

The financial statements up to year ended 31st March 2016 were prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules ,2006 (as amended) and other relevant provisions of the Act.

3. Significant accounting Policies

3.1 Basis of Measurement

These accounts are prepared on historical cost basis except for certain financial Assets and liabilities (including derivatives instruments) measured at fair value.

3.2 Use of Estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statement and reported amounts of revenue and expenses during the period. Application of accounting policies that requires critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimate could change from period to period. Actual results could differ from those judgments. Appropriate changes in estimates are made as management become aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which change are made and if material, their effects are disclosed in the notes to the financial statements.

3.3 Significant accounting Judgments, estimates, assumptions

In the process of applying the Company''s accounting policies, management has made the following key estimates, assumptions and judgments, which have significant effect on the amounts recognized in the financial statement :

(a) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.

(b) Contingencies

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(c) Mine restoration obligations

In determining the fair value of the mine restoration obligation the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs. Discount rates are determined based on expected rate of return.

(d) Insurance Claims

Insurance and other claims raised by the Company are accounted for when received owing to uncertainties involved.

3.4 Current versus non-current classification

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

(A) An asset treated as current when it is:

(i) Expected to be realized or intended to be sold or consumed in normal operating cycle,

(ii) Held primarily for the purpose of trading,

(iii) Expected to be realized within twelve months after the reporting period, or

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

All other assets are classified as non-current.

(B) A liability is current when :

(i) It is expected to be settled in normal operating cycle.

(ii) It is held primarily for the purpose of trading,

(iii) It is due to be settled within twelve months after the reporting period, or

(iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

3.5 Reclassification of financial assets and liabilities

The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no classification is made for financial assets which are equity instruments and financial liabilities. For financials assets which are debt instruments; a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company''s senior management determines change in the business model as a result of external or internal changes which are significant to the company''s operations. Such changes are evident to the external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period. Following the changes in business model, the company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

3.6 Foreign Currencies Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss is recognized in the statement of Profit and Loss.

3.7 Revenue Recognition

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

Sale of Goods

Sales are recognized when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and are measured at the fair value of the consideration received and receivable inclusive of excise duty and net of trade discounts, allowable sales return and sales tax/value added tax.

Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable

Dividend

Dividend income is recognized when the right to receive dividend is established

3.8 Government Grants

Government Grants are recognized where there is reasonable assurance that the grant will be received and all attached condition will be complied with.

Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Investment subsidy/employment generation subsidy and other revenue grants are credited to Statement of Profit and Loss or deducted from the related expenses.

3.9 Taxation

Income tax expense represents the sum of current and deferred tax (including MAT). Current income tax assets and liabilities are measured at the amount to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.

Income tax expense is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or other comprehensive income, in such cases the tax is also recognized directly in equity or in other comprehensive income.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilized.

Minimum Alternative Tax (MAT) is applicable to the Company. Credit of MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

3.10 Property, Plant and Equipment

The Company considers the previous GAAP carrying value for all its Property, Plant and Equipment as deemed cost at the transaction date, viz. 1st April 2015 Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment of loss, if any.

Cost of any item of property, plant and equipment comprises its purchase price including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition cost of dismantling and removing the item and restoring the site on which it is located.

Capital work in progress is stated at cost incurred during the construction / installation / pre-operation period relating to items of project in progress.

On transition to IND AS, the Company has elected to continue with carrying value of all of its property plant and equipment recognized as at 1 April 2015, measured as per the previous GAAP and use that carrying value as the deemed Cost of such property, plant and Equipment.

Depreciation is provided on the straight line method by depreciating carrying amount of Property, Plant and Equipment over remaining useful life of the assets.

Depreciation methods, useful life and residual values are reviewed at each financial year end. The useful life and residual value as per such review is normally in accordance with schedule II of the Companies Act 2013.The 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 the Statement of Profit and Loss on the date of disposal or retirement.

3.11 Intangible Assets

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful life on a straight line method. The useful lives of intangible assets are as follows:

(a) Mining rights are amortized over the period of the leases.

(b) Computer software is amortized over a period of 5 years. Cost of Site restoration is capitalized as Property, Plant and Equipment under the head” Site Restoration Cost”.

3.12 Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

3.13 Borrowing Costs

Interest and other costs connected with the borrowing for the acquisition / construction of qualifying fixed assets are capitalized up to the date that when such asset are ready for their intended use and other borrowing cost are charged to statement of profit & loss. Borrowing cost includes exchange difference to the extent regarded as an adjustment to the borrowing cost.

3.14 Lease

Leases under which the Company assumes substantially all risks and rewards of ownership are classified as finance lease. When acquired such assets are capitalized at fair value or present value of minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating lease are recognized as an expenses on a straight line basis in the Statement of Profit and Loss account over the lease term.

3.15 Inventories

Inventories are valued at the lower of cost and net realizable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Work In Progress has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realizable value.

3.16 Provision and Contingencies

A provision is recognized if as a result of past event the company has a present legal or constructive obligation that is reasonably estimated and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by discontinuing the expected cash flow at a pre-tax rate that reflects current market assessments of the time value of the money and the risk specific to the liabilities. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognized in the financial statements, as they are dependent on the outcome of legal or other processes.

Mine restoration expenditure is provided for in the Statement of Profit and Loss based on present value of estimated expenditure required to be made towards site restoration at the time of vacation of mine. The unwinding of the discount is expensed as incurred and recognized as a finance cost in the Statement of Profit and Loss. The cost estimates are reviewed periodically and adjusted as appropriate. Changes in the estimated future costs or discount rate applied are added to or deducted from the Site restoration cost.

3.17 Employee Benefits :

Expenses and liabilities in respect of employee benefit are recorded in accordance with Indian Accounting Standard (Ind AS 19 employees benefit)

(i) Defined Contribution Plan: Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognized during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employee’s gratuity fund and leave encashment schemes are the Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by actuary at each Balance Sheet date. Actuarial gain /loss, if any, arising from experience adjustments and change in actuarial assumptions are charged or credited to Other Comprehensive income in the period in which they arise. Net Interest Cost are charged as interest Cost in statement of profit and Loss account.

3.18 Cash and Cash Equivalents

Cash and Cash equivalents in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of Company''s Cash Management.

3.19 Dividend

Annual dividend distribution to the shareholders is recognized as a liability in the period in which the dividend is approved by the shareholders. Dividend payable and corresponding tax on dividend distribution is recognized directly in equity.

3.20 Earnings Per Share

Basic Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year.

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

3.21 Research and Development Expenses

Revenue expenditure on Research and Development is charged as expenses under the head "Research and Development” in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalized and depreciated according to the policy followed by the Company.

3.22 Financial Instruments

(a) Financial Assets

Initial Recognition and Measurement

All financial Assets are recognized initially at fair value plus, in case of financial assets not recorded at fair value through profit or loss, transaction cost that are attributable to the acquisition of the financial asset.

Subsequent measurement

(i) Financial Assets carried at amortized Cost- A Financial Assets 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 give rise on specified dates to cash flows that are solely payments of principal and interest term on the principal amount outstanding.

(ii) 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 assets and the contractual terms of the financial asset give rise on a specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has made an irrevocable election for its investment which are classified as equity instruments to present the subsequent changes in fair value in other Comprehensive income based on its business model. Further, in case where the company has made an irrecoverable election based on its business model for its investments, which are classified as equity instrument the subsequent changes in fair value are recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss -

A Financial Assets which is not classified in any of the above categories are included within Fair value through Profit or Loss.

(b) Financial Liabilities

Initial recognition and Measurement

Financial Liability are recognized at fair value on initial recognition and in case of loan and borrowing and payables net of directly attributable transaction costs.

Subsequent recognition

Financial Liabilities are subsequently carried at amortized cost using effective interest method. For trade and other payables maturing within one year from the Balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

(c) Derivatives

The Company uses derivative financial instruments, such as Option Contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognized at fair value on the date derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

(d) De-recognition of financial instrument

The company de-recognizes the financial assets when contractual right to cash flow from financial assets expire or it transfer the financial assets and transfer qualities for de-recognition under IND AS 109. A financial liability or a part of a financial liability is de-recognized from the company''s Balance Sheet when obligation specified in the contract is discharged or cancelled or expires.

3.23 Fair value financial instruments

The company measure financial instrument at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In determining the fair value of its financial instruments, the company use various method and assumption that are based on market conditions and risks existing at each reporting date. The methods used to determine the fair value includes discounted cash flow analysis, available quoted market price and dealer quotes and valuation report etc. The method of assessing fair value results in general approximation of value and such value may never actually be realized.

3.24 Recent accounting pronouncements

Standard issued but yet not effective

In March 2017, the Ministry of Corporate affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules 2017, notifying amendments to Ind AS 7''Statement of cash flows'' and Ind AS 102, ''Share -based payment''. These amendments are in accordance with the recent amendments made by International Accounting Standard Board (IASB) to IAS 7,''statements of cash flows'' and IFRS 2, ''Share based payment,'' respectively. The amendments are applicable to the Company from April 1,2017.

Amendments to Ind AS 7

The amendments to Ind AS require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financial activities including both changes arising from cash flows and non -cash changes, suggesting inclusion of a reconciliation between the opening and closing balance in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendments and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102

The amendments to Ind AS 102 provide specific guidance to measurement of cash-settled awards, modifications of cash-settled awards and awards that includes a net settlement features in respect of withholding taxes.

The Company is evaluating the requirements of the amendments and the impact on the financial statements is being evaluated.


Mar 31, 2015

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income and Expenditure

Expenses and income are accounted for on an accrual basis. Insurance and other claims raised by the Company are accounted for when received and are not material by reference to the total operations.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Material-in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments and for this purpose, the investee company's assets and estimated future cash flows are used to determine whether any diminution other than temporary has taken place. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during Construction Period is included under Capital Work-In Progress and allocated to the respective fixed assets on commencement of commercial production.

6. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method by depreciating carrying amount of fixed assets as on 1st April 2014 over remaining useful life of the assets as per schedule II of the Companies Act 2013. Continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on the land, belonging to Kota Super Thermal Power Station, Kota is amortised over the period of the agreement for extraction of fly ash between the company and Kota Super Thermal Power Station.

II. Intangible Assets

(a) Mining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 year

8. Employee Benefits

(i) Defined Contribution Plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employee's gratuity fund and leave encashment schemes are the Company's defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital assets is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonable certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs connected with borrowings for the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amounts of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised in the financial statements, as they are dependent on the outcome of legal or other processes.

14 Taxation

Provision for current tax is made in accordance with the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon'ble Rajasthan High Court's order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2014

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income And Expenditure

Expenses and income are accounted for on an accrual basis. Insurance and other claims raised by the Company are accounted for when received and are not material by reference to the total operations.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and |V|aterial-in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments and for this purpose, the investee company''s assets and estimated future cash flows are used to determine whether any diminution other than temporary has taken place. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost (including borrowing cost where applicable

and adjustment for exchange differences) incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during Construction Period is included under Capital Work-in Progress and allocated to the respective fixed assets on commencement of commercial production.

6. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the mannerspecified in Schedule XIV to the Companies Act, 1956. The useful lives of continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on the land, which ownership belongs to Kota Super Thermal Power Station, Kota is amortised over the period of agreement for extraction of fly ash between the Company and Kota Super Thermal Power Station.

II. Intangible Assets

(a) fining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 years.

8. Employee Benefits

(i) Defined Contribution Plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employees'' gratuity fund and leave encashment schemes are the Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit l^ethod.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital assets is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonable certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amounts of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised in the financial statements as they are dependent on the outcome of legal or other processes.

14 Taxation

Provision for current tax is made in accordance with the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon''ble Rajasthan High Court''s order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2013

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of income and expenditure Expenses and income are accounted for on an accrual basis.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Material- in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost (including borrowing cost where applicable and adjustment

for exchange differences) incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during construction period is included under capital work in progress and allocated to the respective fixed assets.

6. Impairment of assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. The useful lives of continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on land which ownership belongs to KSTPS, Kota is amortised over the period of agreement for extraction of fly ash between the Company and.

II. Intangible Assets

(a) Mining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 years.

8. Employee Benefits

(i) Defined contribution plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employee''s gratuity fund and leave encashment schemes are the

Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of transaction. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital asset is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue Expenditure on Research and Development is charged as expenses under the head ''Research and Development” in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from ''timing differences” between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon''ble Rajasthan High Court''s order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2012

1. Accounting Concepts

The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income and Expenditure Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories

Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials-in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets

Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

6. Expenditure During Construction Period Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction /erection/ installation period.

7. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

II. Intangible Assets

(a) Mining right is amortised over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefits

(i) Defined contribution plan : Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employees' gratuity fund and leave encashment schemes are the company's defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government Grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government Grants of nature of Project Subsidy are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at its book value. Other Revenue Grants are credited to Profit & Loss Account or deducted from related expenses.

1 2. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13. Research & Development Expenditure

Revenue Expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and is depreciated according to the policy followed by the Company.

14. Provisions and Contingent Liabilities/Assets Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

15 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and Hon'ble Rajasthan High Court's order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 8.


Mar 31, 2011

1. Accounting Concepts The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition Of Income And Expenditure Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials-in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

6. Expenditure During Construction Period

Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction /erection/installation period.

7. Impairment Of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

II. Intangible Assets

(a) Mining right is amortized over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefit

(i) Defined contribution plan:

Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan :

The employees gratuity fund and leave encashment schemes are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government grants of the nature of Project Subsidy are credited to Capital Reserve. Other Revenue grants are credited to Profit & Loss Account or deducted from related expenses.

12. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13. Provisions And Contingent Liabilities/Assets Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will

be adjusted in future. Pursuant to the approval of the shareholders and Honble Rajasthan High Courts order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 5.


Mar 31, 2010

1. Accounting Concepts

The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition Of Income And Expenditure

Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories

Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials- in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets

Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost.

6. Expenditure During Construction Period

Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction/erection/installation period.

7. Impairment Of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

(i) Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

(ii) Intangible Assets

(a) Mining right is amortized over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefit

(i) Defined contribution plan:

Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan:

The employees gratuity fund and leave encashment schemes are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recoded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government grants of the nature of Project Subsidy are credited to Capital Reserve. Other Revenue grants are credited to Profit & Loss Account or deducted from related expenses.

12 Bonnwmg Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13 Provisions And Contingent liabilities Assets

Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and Honble Rajasthan High Courts order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.

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