2010-11 - Grasim

UltraTec
ech Cement Limited
SCHEDULE 21 (Contd.)
(c) The effect of intra group transactions between the Company and its subsidiaries are
eliminated on consolidation.
2. Notes on Accounts of the financial statements of the Company, its Subsidiaries and its
interest in Joint Venture are set out in their respective financial statements.
3. Goodwill:
Goodwill represents the difference between the Group’s share in the net worth of subsidiaries
and the cost of acquisition at each point of time of making the investment in the subsidiaries.
For this purpose, the Group’s share of net worth is determined on the basis of the latest
financial statements prior to the acquisition after making necessary adjustments for material
events between the date of such financial statements and the date of respective
acquisition.
Goodwill arising out of an acquisition of equity stake is translated at the closing rate on each
Balance Sheet date as per AS 11 “The Effects of Changes in Foreign Exchange Rates”
notified under the Companies (Accounting Standard) Rules, 2006.
Reserves shown in the consolidated balances sheet represents the group’s share in the
respective reserves of the Group companies.
Hitherto, the Company was amortising Goodwill arising on amalgamation over 10 years. In
the current year in order to align with group policy, the Company has reversed and credited `
8.77 Crores to General Reserve, being cumulative amortisation of such Goodwill as at
31.03.2010.
Had such change in accounting policy not been made, profit for the year before tax would
have been lower by ` 24.30 Crores, General Reserve would have been lower by ` 8.77 Crores
and value of Goodwill as at the year end would have been lower by ` 33.07 Crores.
4. Scheme of Amalgamation:
Pursuant to the Scheme of Amalgamation (“the Scheme”) of Samruddhi Cement Ltd. (“SCL”)
a subsidiary of Grasim Industries Ltd., the holding company, with the Company as sanctioned
by the Hon’ble High Courts of Mumbai and Gujarat vide their orders dated June 11, 2010 and
July 1, 2010 respectively; the entire business and all the assets and liabilities, duties and
obligations of SCL have been transferred to and vested in the Company with effect from July
01, 2010 (the appointed date). The Scheme became effective from August 01, 2010.
The erstwhile SCL was engaged in manufacture and sale of Cements.
The assets and liabilities acquired pursuant to the scheme mentioned above continue to
remain in the name of/owned by SCL pending completion of the relevant formalities of
transfer.
Investments made by SCL in Harish Cement Limited (Wholly owned Subsidiary) and
Bhaskarpara Coal Company Limited were transferred to the Company pursuant to the Scheme
of Amalgamation.
In view of the amalgamation of SCL with the Company w.e.f. July 01, 2010, the figures for the
current year are not comparable with those of the previous year.
5. The Company’s wholly-owned subsidiary ‘UltraTech Cement Middle East Investments Limited’
has completed the acquisition of ETA Star Cement and has acquired management control of
its operations in the UAE, Bahrain and Bangladesh.
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