1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements upto the year ended 31st March 2016 were prepared in accordance with the Accounting Standards Rules 2006 (as amended) and other relevant provisions of the Companies Act, 2013 (Indian GAAP).
The Ministry of Corporate Affairs (MCA) issued a Notification on 16th February, 2015, making Indian Accounting Standards, issued under Section 133 of Companies Act, 2013 mandatory for certain class of Companies.
As per the Notification, Ind AS is mandatory for the Company for the Financial year commencing 1st April 2016. Accordingly, the Company has adopted Ind AS from 1st April 2016 and the Financial Statements for the year ended 31st March 2017 have been prepared in accordance with the principles laid down in the said Ind AS.
The financial statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates.
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities:
(i) Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).
(ii) Employee''''s Defined Benefit plan as per Actuarial valuation.
(iii) Plant, Property and Equipment measured at fair value.
2. FIRST TIME ADOPTION OF Ind AS
The Company has restated the financial statements as at 1st April 2015 (opening), being the transition date, on the following basis:
The amount of transition reserve (component of retained earnings) arising on the same is given below:
a) All Tangible assets, including Property, Plant and Equipments, and Intangible assets were revalued as at the transition date and stated at fair values, resulting in reserve of Rs.239311.71 Lakhs.
b) The restoration obligation of Limestone mines was assessed as at the transition date and provision has been created for Rs.9500.00 Lakhs.
c) Investments have been assessed at fair values and provision for Rs. 1940.85 Lakhs has been created at the transition date.
d) Financial assets and liabilities were assessed for possible credit risks and provision has been created for expected credit losses as at the transition date amounting to Rs.37,448.39 Lakhs.
e) Exchange differences arising on Long term foreign currency loans, which were under Indian GAAP capitalized / accounted as Foreign currency Monetary Item Translation Reserve, as the case may be, are under Ind AS debited to Statement of Profit and Loss. The cumulative difference of Rs.894.78 Lakhs as at the transition date is charged to transition reserve.
f) The balances in Revaluation Reserve account (Rs.30356.30 Lakhs credit) and Goodwill account (Rs.1922.00 Lakhs debit) are also transferred to transition reserve account.
g) Contingencies & provisions have been re-assessed as at the transition date and accordingly created additional provision for Rs.3160.00 Lakhs debit.
h) Deferred tax liability was reassessed as at the transition date based on Balance Sheet approach and created additional liability of Rs. 11214.70 Lakhs.
Exemptions availed as per Ind AS 101:
1) Past Business Combination:
The Company has elected not to apply Ind AS 103-Business Combinations retrospectively to Past Business Combinations that occurred before the transition date of 01-Apr-2015, consequently, the Company has kept the same classification for the past business combinations as in its previous GAAP financial statements.
2) Property, Plant and Equipments:
The Company has elected to measure the PPE at Fair value on transition date.
3) Investments in Subsidiaries & Associates:
The Company has elected to carry its Investments in Subsidiaries & Associates at deemed cost which is its previous GAAP carrying amount at the date of transition to Ind AS.
4) Sales Tax Deferment Loan:
The Company has elected to use the previous GAAP carrying amounts of Sales Tax Deferment Loan existing at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance Sheet.
5) Fair Value of Financial Assets and Liabilities:
As per the Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.
Note on Scheme of Amalgamation:
The Board of Directors has approved a Scheme of Amalgamation of Trinetra Cement Limited and Trishul Concrete Products Limited with the Company effective 1st January 2014 (Appointed Date) under Sections 391 to 394 of the Companies Act, 1956. Honourable Madras High Court referred the petition to National Company Law Tribunal (NCLT). NCLT after hearing the arguments approved the scheme on 13th April, 2017 and 20th April, 2017 Accordingly the attached financials include the financials of the amalgamating companies.
The Company has sought approval from Stock Exchanges / SEBI for issue of Equity Shares to the shareholders of the amalgamating companies. Pending receipt of the said approval, the amount has been shown under share suspense account.
The goodwill / capital reserve arising on implementation of the scheme has been adjusted against Reserves as contained in the Scheme.
3. SIGNIFICANT ITEMS OF ACCOUNTING POLICY
1 Use of estimates
The preparation of financial statements is in conformity with generally accepted Indian Accounting Standards (Ind AS) 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 estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
(a) Valuation of Inventories of raw materials, stores, spares, fuels, semi-finished goods and finished goods is done at weighted average cost.
(b) Construction and Infrastructure Projects are valued at cost or net realisable value whichever is lower.
3 Cash and Cash equivalents
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and short term investment with an original maturity of three months or less.
4 Property, Plant and Equipments
Property, Plant and Equipments (PPE) were revalued as at Ind AS transition date, 1st April 2015 and stated at fair values.
Property, Plant and Equipments (PPE) acquired on hire purchase or on Financial Lease are shown at their principal cost, excluding the interest cost included in these agreements which is charged to revenue over the life of the agreement.
Depreciation is provided over the remaining useful lives of the assets, as per Schedule II of the Companies Act, 2013.
Capital Work in Progress of all the cement manufacturing facilities are shown at cost of Acquisition.
Software development costs are capitalized and depreciated along with computers on Straight Line method.(Intangible assets with finite useful life that are acquired separately are carried at cost less accumulated amortization and accumulated impairment, if any) Material items such as Spare parts, Stand-by equipments and service equipments are classified as PPE when they meet the definition of PPE as specified in Ind AS 16.
5 Foreign Currency Transactions
(a) Foreign Exchange transactions are accounted at the exchange rates prevailing at the time of transactions or at contracted rates. Assets and liabilities, in Foreign currencies are translated at values prevailing as at the year end. Gains / Losses if any, arising there from are recognized in the Profit and Loss account.
(b) Forward Exchange contracts used to hedge Foreign Currency Transactions are initially recognized at the spot rate on the date of contract. Forward Exchange contracts remaining unsettled at the end of the year are translated at the year end rates. The difference in translation of Forward exchange contracts are recognized in the Profit and Loss Account.
6 (a) Revenue Recognition on 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, usually on delivery of the goods. Revenue from the sale of goods is measured at the value of the consideration received or receivable, net of returns and discounts.
(b) Sales include excise duty, revenue from trade related activities and sales tax deferred as reduced by consideration for assignment of Sales Tax deferral liability, if any, and is net of rebates, discounts and incentives as ascertained by management as per market conditions.
(c) Revenue from Construction and Infrastructure projects under property development division is recognized on percentage of completion method.
(d) Revenue on time charter of ships is recognized on a proportionate basis.
7 Research and Development
Research and Development expenses not resulting in any tangible property / equipment are charged to revenue.
8 Borrowing Costs
Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss account.
9 Claims / Incomes arising from price escalation and / or any other item of compensation and which are indeterminate are accounted when there is certainty of Income accrual.
Investments are stated at fair values.
11 Employee Benefits:
Retirement benefits are provided by charge to revenue including provision for gratuity and superannuation fund determined on an actuarial basis for which a trust has been created. The Actuarial gains/losses arising on retirement benefits are also recognized in the Profit and Loss account. Unavailed leave balances are accounted based on respective employee''''s earnings as at the balance sheet date on actuarial basis.
12 Fringe Benefits arising on options vested under Employees Stock Options Scheme (ESOS),2006 are charged to Profit and Loss Account and credited to Stock Options Reserve Account. On allotment of shares, corresponding amount is transferred from Stock Option Reserve to Securities Premium Account.
13 Tax Expense:
(a) Current income tax is measured and accounted based on the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 at the tax rates prevailing during the year.
(b) Deferred tax is measured and accounted based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date.
14 Contingent Liabilities / Assets:
Contingent liabilities and contingent assets are not recognized in the books of accounts. Provisions are made for the reliably estimated amount of present obligation to pay for the past events.
Terms / Rights / restrictions attached to shares:
The Company has only one class of Equity share. Each share has a paid up value of Rs.10/-. Every shareholder is entitled to one vote per share, except for the holders of Global Depository Shares, as given below:
During the year 2005-06, the Company allotted 5,12,27,592 underlying equity shares of Rs.10/- each represented by 2,56,13,796 Global Depository Shares (GDSs) in the ratio of 2:1. Holders of these GDSs have no voting rights with respect to the Deposited shares.
During the previous year 2015-16, the Company had declared and distributed a dividend of Re.1.00 per share.
Shares reserved for issue under Employee Stock Option Scheme:
During the year 2006-07, the company announced Employees Stock Option Scheme, 2006 (ESOS 2006) to its employees, which came into force on 1st December 2006. There are no shares reserved for issue under options as at March 31,2016.
As recommended by the Compensation Committee, the Board of Directors has granted, as on 01.04.2017, 18.35 lakhs options to eligible employees under Employees Stock Option Scheme, 2016 (Scheme). The options granted under the Scheme will vest with the employees on 01.04.2018 and the vested options shall be exercised within one year from the date of vesting. On exercise of each option, one equity share of Rs.10/- each fully paid-up will be allotted at a price of Rs.50/- per share, including a premium of Rs.40/- per share.
- Shares are held in the capacity of a Trustee for the shares held by the Wholly owned Subsidiaries in Trusts.