JOTE - 1 - SIGNIFICANT ACCOUNTING POLICIES Accounting Convention The Financial statements of the Company are brpared under the historical cost convention using the accrual method of accounting and comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with rule 7 of the Company (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 unless stated otherwise hereinafter. Accounting Policies not specifically referred to, are consistent with Generally Accepted Accounting Principles in India. I. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these esti mates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. II. Fixed Assets Fixed assets (Tangible and Intangible) are disclosed at cost less accumulated debrciation/amortization and impairment loss, if any. Cost comprises of purchase price and a ttributable cost of acquisition/bringing the asset to its working condition for its intended use (net of credit availed, if any) except free hold land not containing mineral reserves which is disclosed at cost less impairment loss, if any. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized at cost (net of credit availed, if any). Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized. V. Capital Work-In-Progress a) Capital work-in-progress is carried at cost and Pre-operative expenditure during construction period which is allocated to the fixed assets on the completion of project. b) Expenditures on construction of assets for Company's use at brmises owned by Government/Local Authorities/others are charged to Statement of Profit and Loss in the year of expenditure. V. Impairment of Assets The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. An asset's recoverable amount is the higher of the asset's net selling price and value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the cost of disposal. A brviously recognized impairment loss is further provided or reversed depending on changes in circumstances. VI. Debrciation and Amortization Tangible Assets (a) Debrciation is provided on Written down Value method in accordance with the provisions of Schedule II to the Companies Act, 2013 or the rates brscribed in the Income Tax Act, 1961 and rules made there under, whichever is higher. However, in case of those assets whose WDV as per the Income Tax Act, 1961 is lower than the WDV as per books, additional debrciation is provided to align the Book WDV with WDV as per the Income Tax Act, 1961. (b) Leasehold land is amortized over the period of lease. (c) Freehold Land bearing mineral reserves is amortized over its estimated commercial life based on the unit-of-production method. Intangible Assets (a) Expenditure on Computer Software is amortized in the year in which it is capitalized. (b) Amount paid for Mining rights is amortized in the year in which amount is paid. (c) Goodwill is amortized within one year. VII. Foreign Currency Transactions Foreign currency transactions are recorded by applying the exchange rates on the date of transaction. At each Balance sheet date, foreign currency monetary items are reported using the closing rates. Non Monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction Exchange difference arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expense in the year in which they arise. Derivative Instruments Derivative financial instruments are used to hedge risk associated with foreign currency fluctuations and interest rates. The derivative contracts are closely linked with the underlying transactions and are intended to be held till maturity. These are accounted on the date of their settlement and realized gain/loss in respect of settled contracts is recognized in the Statement of Profit and Loss. The brmium or discount on forward exchange contracts is amortised over the life of the contract. VIII. Investments Investments, that are intended to be held for not more than one year, from the date of acquisition, are classified as current investments. All other investments are classified as long term investments. Current Investments are carried at lower of cost or fair market value. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary. IX. Inventories a) Raw Materials, Stores & Spare Parts, Packing Materials and Fuel These 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 is determined on a weighted average basis. b) Work-in-progress and Finished goods These are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. 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. X. Cash and Cash Equivalents Cash and cash equivalents for the purpose of cash flow statement comprises cash on hand, balances with banks and fixed deposits with banks with an original maturity of three months or less. XI. Revenue Recognition Revenue is recognised to the extent it is probable that the economic benefit will flow to the company and the revenue can be reliably measured: a) Revenue from sale of goods and power is recognized when significant risks and rewards of ownership is transferred to the buyer. Sales are disclosed net of sales tax / VAT, trade discounts and returns, as applicable. b) Power supplied under banking arrangements is accounted for as per terms of related agreements. Quantity of power banked is recorded as loan transaction valued at cost or net realizable value, whichever is lower and recognized as revenue when the same is returned and sold to an ultimate customer. c) Dividend income on investments is accounted for when the right to receive the payment is established. d) Interest is recognized using the time-proportion method, based on rates impli cit in the transaction. e) Certain insurance, railway and other claims where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis. XII. Government Grants/Subsidies Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached thereto and the grants will be received. Government grants/subsidies, which are capital in nature, are credited to capital reserve. Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss over the period to match them with the related costs. XIII. Employee Benefits Defined Contribution Plan Superannuation, Provident Fund and National Pension Scheme are considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year in which the contributions to the respective funds are due. Defined Benefit Plan a) Gratuity is considered as defined benefit plan and is provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. b) Contribution to provident Fund set up by the Company in respect of a few employees is also defined benefit plan and contribution is charged to Statement of Profit and Loss of the year in which the contribution is due. c) Encashable leave in case of employees covered by Cement Wage Board is considered as defined benefit plan and is accounted for on the basis of actuarial valuation, as at the Balance Sheet date. Other Benefits Non encashable leave are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of Balance sheet. Actuarial gains and losses, if any, are recognized in the Statement of Profit and Loss in the year in which they arise. XIV. Operating Leases Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on a straight-line basis over the lease term. XV. Borrowing Costs Borrowing costs directly attributable to the acquisition / construction of a qualifying asset are capitalized as part of the cost of such asset till such time the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred. XVI. Research and Development Expenditure on research phase is recognized as an expense when it is incurred. Expenditure on development phase which results in creation of assets is included in related Fixed Assets. XVII. Mines Reclamation Expenditure The Company provides for the expenditure to reclaim the quarries used for mining. The total estimate of reclamation expenses is apportioned over the estimate of mineral reserves and a provision is made based on the minerals extracted. XVIII. Segment Reporting Segment is identified and reported taking into account the nature of products and services, the different risks and returns and the internal business reporting systems. The identification of geographical segment is based on the areas in which major operating divisions of the Company operates. Inter Segment Transfers are accounted for as if the sales or transfers were to third parties at market price. Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Assets, Liabilities, Revenue and Expenses which are not allocable to segments are included under "unallocated". XIX. Taxation Tax expenses comprises of Current and Deferred Tax. Current Tax is measured on the basis of estimated taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax is recognized for all the timing differences. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the Income Tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and the same is reviewed at each Balance sheet date. XX. Provisions, Contingent Liabilities and Contingent Assets Provisions in respect of brsent obligation arising out of past events are made in the accounts if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. The contingent liabilities are disclosed, unless the possibility of outflow of resources is remote. Contingent Assets are generally neither recognized nor disclosed in the financial statements. XXI. Earnings per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders 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 and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 2.2 The Company has only one class of equity shares having a par value of 710 per share. Each holder of equity share is entitled to one vote per share. 2.3 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all brferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. 2.4 The Board of Directors of the Company has declared Interim Dividends of 7 24 per share (two interim dividends at the rate of 7 12 per equity share each on 2nd February, 2016 and 10th March, 2016). 2.5 As no fresh issue of shares or reduction in capital was made during the current period as well as during the brvious year, hence there is no change in the opening and closing capital. Accordingly, reconciliation of share capital has not been given. 2.6 The Equity Shares of the Company are listed at BSE Limited and National Stock Exchange of India Limited and the annual listing fees has been paid for the period. 3. Trade Payables are based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act. 4 Previous year figures have been regrouped and rearranged wherever necessary. 5 Figures less than 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lac. 6 Section 2(41) of the Companies Act, 2013 requires Company to have its financial year ending on 31st March. The Company has adopted this change from the current financial year and accordingly, the current financial year of the Company is for a nine months period from 1st July, 2015 to 31st March, 2016. Accordingly, the figures for the current financial year are not comparable to those of the brvious year. As per our report of even date For B. R. Maheswari & Co. Chartered Accountants Firm's Registration No. 001035N For and on behalf of the Board Prashant Bangur Joint Managing Director B. G. Bangur Chairman H. M. Bangur Managing Director Sudhir Maheshwari Partner Membership No. 081075 S. S. Khandelwal Company Secretary Subhash Jajoo Chief Finance Officer O. P. Setia Independent Director & Chairman of Audit Committee Place : Kolkata Date : 26th May, 2016 |