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Accounting Policies of Prism Cement Ltd. Company

Mar 31, 2017

BACKGROUND

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

Authorization of financial statements

The financial statements were authorized for issue in accordance with a resolution of the directors on May 25, 2017.

1. SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the significant accounting policies adopted in the presentation of these standalone financial statements.

1.1 Basis of Preparation

(i) Compliance with Ind AS

The standalone financial statements comply in all material aspects with Indian Accounting Standards ("Ind AS”) notified under Section 133 of the Companies Act, 2013 ("the Act”) Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act.

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

These financial statements are the first financial statements of the Company under Ind AS. Refer Note no. 4.21 for an explanation of how the transition from previous GAAP to lnd AS has affected the Company''s financial position, financial performance and cash flows. The date of transition to Ind AS is April 1, 2015.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following :

a) certain financial assets and liabilities (including derivative instruments) are measured at fair value; and

b) defined benefit plans - plan assets measured at fair value.

1.2 Rounding of amounts

All amounts disclosed in the financial statement and notes have been rounded off to the nearest crores, except where otherwise indicated.

1.3 Current versus non-current classification

The Company presents its assets and liabilities in the Balance Sheet based on current / non-current classification. An asset is treated as current if it is :

a) expected to be realized or intended to be sold or consumed in normal operating cycle;

b) held primarily for the purpose of trading;

c) expected to be realized within twelve months after the reporting period; or

d) the 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.

A liability is current when :

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

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

c) it is due to be settled within twelve months after the reporting period; or

d) 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.

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

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 normal operating cycle.

1.4 Use of judgments, estimates and assumptions

While preparing financial statements in conformity with Ind AS, the management makes certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. The management continually evaluates these estimates and assumptions based on the most recently available information.

Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as below:

The Company has equity stake in various entities for strategic reasons concerning its operation. The relationship with these entities has been determined based on principles laid down in Ind AS 110 - Consolidated Financial Statements and Ind AS 111 - Joint Arrangements. Accordingly, Raheja QBE General Insurance Company Limited was considered as Joint Venture up to March 29, 2016 and subsidiary thereafter. The entities mentioned below are considered as subsidiaries.

(i) Antique Marbonite Private Limited

(ii) Small Johnson Floor Tiles Private Limited

(iii) Spectrum Johnson Tiles Private Limited

(iv) Sentini Cermica Private Limited

(v) Coral Gold Tiles Private Limited

Key assumptions

(i) Financial instruments; (Refer note 4.07)

(ii) Useful lives of Property, Plant and Equipment and Intangible assets; (Refer note 1.5)

(iii) Valuation of inventories; (Refer note 1.8)

(iv) Assets and obligations relating to employee benefits; (Refer note 4.03)

(v) Evaluation of recoverability of deferred tax assets; and (Refer note 2.06)

(vi) Contingencies (Refer note 4.04)

(vii) Mine Restoration Provision (Refer note 1.22)

1.5 Property, Plant and Equipment

a) Freehold land is carried at historical cost less impairment loss, if any.

b) Property, Plant and Equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price, non-refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, for assets that necessarily take a substantial period of time to get ready for their intended use, finance costs. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.

c) When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement, if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the Statement of Profit or Loss as incurred.

d) An item of Property, Plant and Equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognizing of the asset (calculated as the difference between the net realizable value and the carrying amount of the asset) is included in the Statement of Profit and Loss.

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

f) The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and changes, if any, are accounted prospectively.

g) Lease arrangements for land are identified as finance lease, in case such arrangements result in transfer of the related risks and rewards to the Company. Accordingly, the Company identifies any land lease arrangement with a term in excess of 50 years as a finance lease.

h) Stores and spares which meet the definition of Property Plant and Equipment and satisfy the recognition criteria of Ind AS 16 are capitalized as Property, Plant and Equipment.

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

j) Depreciation on Property, Plant and Equipment is provided on straight line method. In accordance with requirements prescribed under Schedule II to the Companies Act, 2013, the Company has assessed the estimated useful lives of its Property, Plant and Equipment and has adopted the useful lives and residual value as prescribed therein except following cases which are based on internal technical assessment:

Freehold land is not depreciated. Land on finance lease is amortized over the period of lease.

k) The Company depreciates significant components of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life of those components. Useful life for such components of Property, Plant and Equipment is assessed based on the historical experience and internal technical inputs which varies from 2 to 40 years.

l) All assets costing up to Rs.10,000/- are fully depreciated in the year of capitalization.

1.6 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles are not capitalized and the related expenditure is reflected in the Statement of Profit and Loss in the period in which the expenditure is incurred.

Technical know-how / license fee and application software are classified as Intangible Assets.

Intangible assets with finite lives are amortized on straight line basis over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at each year end. The amortization expense on Intangible assets with finite lives and impairment loss is recognized in the Statement of Profit and Loss.

Estimated lives for current and comparative periods in relation to application of straight line method of amortization of intangible assets (acquired) are as follows :

Research and Development

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

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

b) Its intention to complete the asset;

c) Its ability to use or sell the asset;

d) Ability to generate future economic benefits;

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

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

1.7 Impairment of Assets

Carrying amount of Tangible assets, Intangible assets, investments in subsidiaries, Joint Ventures and Associates (which are carried at cost) 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. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or company''s assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

1.8 Inventories

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

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

Traded goods are valued at lower of weighted average cost and net realizable value.

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

1.9 Cash and Cash Equivalents

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.10 Government Grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it shall be recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. The above criteria is also used for recognition of incentives under various scheme notified by the Government.

1.11 Financial Instruments

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.

Initial Recognition and Measurement - Financial Assets and Financial Liabilities

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the Statement of Profit and Loss.

Classification and Subsequent Measurement: Financial Assets

The Company classifies financial assets as subsequently measured at amortized cost, fair value through Other Comprehensive Income ("FVTOCI”) or fair value through profit or loss ("FVTPL”) on the basis of following :

- the entity''s business model for managing the financial assets and

- the contractual cash flow characteristics of the financial asset.

Amortized Cost

A financial asset is classified and measured at amortized cost if both of the following conditions are met :

- the financial asset is held within a business model whose objective is to hold financial assets 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 on the principal amount outstanding.

FVTOCI

A financial asset is classified and measured at FVTOCI if both of the following conditions are met :

- the financial asset 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 specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

FVTPL

A financial asset is classified and measured at FVTPL unless it is measured at amortized cost or at FVTOCI.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

Impairment of Financial Assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

Classification and Subsequent measurement: Financial Liabilities

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Financial Liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL.

Gains or losses on financial liabilities held for trading are recognized in the Statement of Profit and Loss.

Other Financial Liabilities

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognizing of Financial Assets and Financial Liabilities

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counter party.

1.12 Financial Liabilities and Equity Instruments

Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company are recognized at the proceeds received.

1.13 Investments in Subsidiaries, Associates and Joint Ventures

A Subsidiary is an entity that is controlled by another entity. An investor controls an investee if and only if the investor has the following; (i) Power over the investee, (ii) exposure, or rights, to variable returns from its involvement with the investee and (iii) the ability to use its power over the investee to affect the amount of the investor''s returns.

An Associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

A Joint Venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the Joint Venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The Company''s investments in its Subsidiaries, Associate and Joint Ventures are accounted at cost.

1.14 Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

1.15 Provisions, Contingent liabilities, Contingent Assets

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.

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. The discount rate used to determine the present value is a current pre-tax rate. The increase in the provision due to the passage of time is recognized as interest expense.

Contingent liabilities are disclosed in the case of :

- a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

- a present obligation arising from the past events, when no reliable estimate is possible;

- a possible obligation arising from past events, unless the probability of outflow of resources is remote. Contingent Assets is disclosed when inflow of economic benefits is probable.

1.16 Gratuity and other post-employment benefits

a) Short-term obligations

Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit and Loss of the year in which the related services are rendered.

b) Post-employment obligations

The Company operates the following post-employment schemes:

- Defined benefit plans such as gratuity; and

- Defined contribution plans such as provident fund, superannuation fund and national pension scheme.

Gratuity obligations

The liability or asset recognized in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Re measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized at amount net of taxes in the period in which they occur, directly in Other Comprehensive Income. They are included in retained earnings in the statement of changes in equity and in the Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the Statement Profit and Loss as past service cost.

Defined contribution plans

The Company contributes to Superannuation, Employee''s State Insurance Corporation, and Provident Fund and subscribes to the National Pension Scheme which is considered as defined contribution plans. A contribution is made to Regional Provident Fund Commissioner for certain employees. In case of other employees covered under the Provident Fund Trust of the Company, the management does not expect any material liability on account of interest shortfall to be borne by the Company. The said contributions are charged to the Statement of Profit and Loss.

c) Other long-term employee benefit obligations

The liabilities for leave are not expected to be settled wholly within twelve months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields 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 the Statement of Profit and Loss.

The obligations are presented as current liabilities in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

d) Bonus Plans

The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

1.17 Revenue Recognition

(i) Sale of goods

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns and allowances, trade discounts and volume rebates but does not include value added tax (VAT) and central sales tax (CST).

The Company has assumed that recovery of excise duty flows to the Company on its own account. This is for the reason that it is liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the Company on its own account, revenue includes excise duty.

The Company recognizes revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity.

(ii) Rendering of services

Revenue from services are recognized as and when the services are rendered on stage of completion method. Income from services does not include service tax (ST).

(iii) Interest Income

Interest income from debt instruments is recognized using the effective interest rate method.

(iv) Dividend Income

Dividends are recognized in the Statement of Profit and 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 the dividend can be measured reliably.

1.18 Taxes on Income Current Tax

Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the Statement of Profit and Loss.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

Deferred tax is provided using the Balance Sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized outside the Statement of Profit and Loss. Deferred tax items are recognized in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.

The break-up of the major components of the deferred tax assets and liabilities as at Balance Sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company have a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

MAT Credits are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence it is grouped with Deferred Tax Asset.

1.19 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.20 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

As a lessee

Leases of Property, Plant and Equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.

1.21 Foreign currency translation

(i) Functional and presentation currency

The Company''s financial statements are prepared in INR, which is also the Company''s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in the Statement of Profit and Loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other gains / (losses).

Non-monetary items

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

1.22 Mine Restoration Provision

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

1.23 First-time adoption-mandatory exceptions, optional exemptions Overall principle

The Company has prepared the opening standalone Balance Sheet as per Ind AS as of the transition date by :

- recognizing all assets and liabilities whose recognition is required by Ind AS;

- not recognizing items of assets or liabilities which are not permitted by lnd AS;

- by reclassifying items from previous GAAP to Ind AS as required under Ind AS; and

- applying Ind AS in measurement of recognized assets and liabilities.

However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

Past business combinations

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of April 1, 2015. Consequently, the Company has kept the same classification for the past business combinations as in its previous GAAP financial statements:

a) The Company has not recognized assets and liabilities that were not recognized in accordance with previous GAAP in the standalone Balance Sheet of the Company and would also not qualify for recognition in accordance with Ind AS in the separate Balance Sheet of the Company;

b) The Company has excluded from its opening Balance Sheet those items recognized in accordance with previous GAAP that do not qualify for recognition as an asset or liability under lnd AS; and

c) The Company has tested the goodwill for impairment at the transition date based on the conditions as of the transition date.

Deemed cost for Property, Plant and Equipment and Intangible assets

The Company has elected to continue with the carrying value of all of its Property, Plant and Equipment and Intangible assets recognized as of the transition date measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Deemed cost on investments in Subsidiaries, Joint Ventures and Associates

The Company has elected to selectively use fair value of its investments in certain subsidiaries as the deemed cost of investments and has elected to continue with the carrying value of its investments is remaining subsidiaries, Joint Ventures and Associates recognized as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the investments in subsidiaries, Joint Ventures and Associates.

Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 determining whether an arrangement contains a lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

Long term foreign currency monetary item

The Company has continued with the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognized in the consolidated financial statements prepared under previous GAAP for the year ended March 31, 2016.

Accounting for joint arrangement

In respect of all the Joint Ventures which were earlier accounted for using the proportionate consolidation method under previous GAAP, the Company has measured the investments in those Joint Ventures as the aggregate of corresponding carrying amounts of the assets and liabilities as a deemed cost on the date of transition as per Ind AS 111-Joint Arrangements.


Mar 31, 2016

Corporate information

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

1.1 Basis of Preparation

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

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

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

1.2 Use of Estimates

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

1.3 Revenue Recognition Sale of Goods

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

Income from Services

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

Dividend Income

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

Interest Income

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

1.4 Tangible Fixed Assets

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

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

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

1.5 Intangible Assets

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

1.6 Depreciation and Amortisation

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

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

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

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

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

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

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

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

1.7 Research and Development

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

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

- Its intention to complete the asset

- Its ability to use or sell the asset

- How the asset will generate future economic benefits

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

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

1.8 Leases

Where the Company is lessee :

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the Statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

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

1.9 Impairment of Tangible and Intangible Assets

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

1.10 Investments

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

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

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

1.11 Inventories

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

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

Traded Goods are valued on moving weighted average cost.

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

1.12 Foreign Currency Transactions Initial Recognition

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

Conversion

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

Forward contracts

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

Synthetic Swap (under forward contracts)

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

Exchange Differences

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

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

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

1.13 Borrowing Costs

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

1.14 Government Grants

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

1.15 Employee Benefits

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

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

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

1.16 Taxes on Income

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

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

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

1.17 Provision

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

1.18 Contingent Liabilities and Contingent Assets

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

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

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

b) Contingent Assets are neither recognised nor disclosed.

1.19 Segment Reporting

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

i. Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Ready mixed Concrete)

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

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

1.20 Cash and Cash Equivalents

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

1.21 Earnings Per Share

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

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

1.22 Expenditure on New Projects

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

1.23 Mines Restoration Expenditure

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


Mar 31, 2015

1 Basis of Preparation

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

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

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

2 Use of Estimates

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

3 Revenue Recognition

Sale of goods

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

Income from services

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

Dividend Income

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

Interest Income

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

4 Tangible Fixed Assets

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

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

5 Intangible assets

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

6 Depreciation and Amortisation

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

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

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

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

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

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

Assets Cement HRJ RMC

Mobile Phones 1 - 3 years

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

Leasehold Land and Mining surface rights Remaining period of the Lease

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

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

Intellectual property right - 10.00% -

Technical Know-how - 14.29% -

Leasehold improvements Over the period of lease / rent agreement.

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

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

Plant & Machinery- - - 6 years Concrete Pumps

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

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

7 Research and Development

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

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

- Its intention to complete the asset

- Its ability to use or sell the asset

- How the asset will generate future economic benefits

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

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

8 Leases

Where the Company is lessee :

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the Statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

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

9 Impairment of tangible and intangible assets

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

10 Investments

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

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

11 Inventories

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

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

Traded Goods are valued on moving weighted average cost.

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

12 Foreign Currency Transactions

Initial Recognition

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

Conversion

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

Forward contracts

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

Synthetic Swap (under forward contracts)

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

Exchange Differences

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

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

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

13 Borrowing Costs

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

14 Government Grants

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

15 Employee Benefits

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

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

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

16 Taxes on Income

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

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

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

17 Provision

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

18 Contingent Liabilities

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

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

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

(b) Contingent Assets are neither recognised nor disclosed.

19 Segment Reporting

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

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

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

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

20 Cash and Cash Equivalents

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

21 Earnings Per Share

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

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

22 Expenditure on New Projects

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

23 Mines Restoration Expenditure

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


Mar 31, 2014

1.1 Basis of Preparation

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

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

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

1.2 Use of Estimates

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

1.3 Revenue Recognition

Sale of goods

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

Income from services

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

Dividend income

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

Interest income

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

1.4 Tangible Fixed Assets

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

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

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

1.5 Intangible Assets

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

1.6 Depreciation and Amortisation

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

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

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

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

Cement Division :

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

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

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

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

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

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

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

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

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

1.7 Research and Development

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

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

- Its intention to complete the asset;

- Its ability to use or sell the asset;

- How the asset will generate future economic benefits;

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

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

1.8 Leases

Where the Company is lessee :

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

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

1.9 Impairment of tangible and intangible assets

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

1.10 Investments

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

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

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

1.11 Inventories

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

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

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

1.12 Foreign Currency Transactions

Initial Recognition

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

Conversion

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

Forward Contracts

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

Exchange Differences

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

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

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

1.13 Borrowing Costs

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

1.14 Government Grants

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

1.15 Employee Benefits

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

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

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

1.16 Taxes on Income

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

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

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

1.17 Provision

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

1.18 Contingent Liabilities

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

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

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

b) Contingent Assets are neither recognised nor disclosed.

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

1.19 Segment Reporting

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

i Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Ready-mixed Concrete)

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

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

1.20 Cash and Cash Equivalents

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

1.21 Earnings Per Share (EPS)

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

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


Mar 31, 2013

1.1 Basis of Preparation

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

1.2 Method of Accounting and Revenue Recognition

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

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

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

1.3 Use of Estimates

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

1.4 Fixed Assets

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

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

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

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

1.5 Depreciation and Amortisation

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

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

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

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

Cement Division :

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

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

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

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

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

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

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

1.6 Research and Development

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

1.7 Investments

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

1.8 Inventories

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

1.9 Foreign Currency Transactions

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

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

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

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

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

1.10 Borrowing Costs

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

1.11 Government Grants

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

1.12 Employee Benefits

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

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

1.13 Taxes on Income

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

1.14 Provision and Contingent Liabilities

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

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

1.15 Segment Reporting

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

i Cement

ii TBK (Tile, Bath and Kitchen)

iii RMC (Readymixed Concrete)

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

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


Mar 31, 2011

Basis of Preparation

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

Method of Accounting and Revenue Recognition

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

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

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

Use of Estimates

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

Fixed Assets

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

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

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

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

Depreciation and Amortisation

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

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

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

Cement Division:

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

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

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

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

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

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

HRJ Division IH&R Johnson (India)]:

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

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

Research and Development

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

Investments

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

Inventories

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

Foreign Currency Transactions

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

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

Borrowing Cost

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

Employee Benefits

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

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

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

Taxes on Income

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

Provision and Contingent Liabilities

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

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

Segment Reporting

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

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

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


Mar 31, 2010

Basis of Preparation

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

Method of Accounting and Revenue Recognition

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

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

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

Use of Estimates

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

Fixed Assets

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

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

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

Depreciation and Amortisation

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

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

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

Cement Division:

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

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

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

Investments

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

Inventories

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

Foreign Currency Transactions

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

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

Borrowing Cost

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

Employee Benefits

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

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

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

Taxes on Income

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

Provision and Contingent Liabilities

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

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

Segment Reporting

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

i. Cement

ii. TBK (Tile, Bath and Kitchen)

iii. RMC (Readymixed Concrete)

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

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