2010-11 - Grasim

UltraTec
ech Cement Limited
SCHEDULE 21 (Contd.)
19.
Government Grants and Subsidies:
(i) Government grants and subsidies are recognised when there is reasonable assurance that
the Company will comply with the condition attached thereto and that the grants will be
received.
(ii) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from
the gross value of the respective fixed assets and capital grants for projects are credited to
Capital Reserve.
(iii) Revenue Government Grants or Subsidies relating to an expense item are recognised as
income over the period to match them on a systematic basis to the costs or deducted from
related expenses.
20. Segment Reporting Policies:
Primary Segment is identified based on the nature of products and services, the different risks
and returns and the internal business reporting system. Secondary segment is identified based
on geography in which major operating divisions of the Company operate.
21. Researc
esearch and development elopment expendit
xpenditure:
Revenue expenditure on research and development is expensed as incurred. Capital expenditure
incurred on research and development is capitalised as fixed assets and depreciated in accordance
with the depreciation policy of the Company.
22. Operating lease:
Leases where significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases and lease rentals thereon are charged to the Profit and
Loss Account
23. Goodwill:
Goodwill arising out of consolidation of financial statements of Subsidiaries and joint Ventures is
not amortised. However the same is tested for impairment at each Balance Sheet Date.
B. NOTES
TO O CONSOLIDATED FINANCIAL STATEMENTS
TEMENTS
1. Principles of consolidation
(a) The Consolidated Financial Statements (CFS) are prepared on the following basis in
accordance with Accounting Standard on “Consolidated Financial Statements” (AS – 21)
and “Financial Reporting of Interest in Joint Ventures” (AS – 27), notified under the
Companies (Accounting Standard) Rules, 2006:
(i) The financial statements of the Company and its subsidiary companies are combined
on a line-by-line basis by adding together the book values of like items of assets,
liabilities, income and expenses, after eliminating material intra-group balances and
intra-group transactions resulting in unrealised profits or losses in accordance with
AS-21.
(ii) The difference between the costs of investment in the subsidiaries, over the net
assets as at the end of the financial year immediately preceding the year of acquisition
of shares in the subsidiaries is recognised in the financial statements as Goodwill or
Capital Reserve as the case may be.
(iii) The Company’s interest in Jointly Controlled Entities (JV’s) is consolidated on a
proportionate consolidation basis by adding together the proportionate book values of
assets, liabilities, income and expenses and eliminating the unrealised profits / losses
on intra-group transactions in accordance with Accounting Standard (AS-27).
(iv) As far as possible, the consolidated financial statements are prepared using uniform
accounting policies for like transactions and other events in similar circumstances and
appropriate adjustments are made to the financial statements of subsidiaries when
they are used in preparing the consolidated financial statements that are presented in
the same manner as the Company’s separate financial statements.
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