I. BASIS OF PREPARATION:
The financial statements are prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with the accounting principles and generally accepted in
India and comply with mandatory Accounting Standards issued by the
Institute of Chartered Accountants of India to the extent applicable
and the relevant provisions of the Companies Act, 1956, except in
respect of mineral deposits and rights which are recorded at estimated
II. USE OF ESTIMATES:
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of revenues and expenses for the period. Actual results could
differ from these estimates. Any revision to accounting estimates is
recognized prospectively in the current and future periods.
III. FIXED ASSETS:
Fixed Assets are stated at acquisition cost (net of taxes which are
claimed as input credits) less depreciation. Capital work-in-progress
is stated at Cost. Cost includes installation and expenditure during
construction period including interest on borrowings till the date of
capitalization. The mineral deposits and mining rights are stated at
the estimated realizable value, based on a valuation by an independent
Depreciation on fixed assets other than those mentioned hereunder has
been calculated using the straight-line method at the rates arrived on
the basis of useful lives of the assets as estimated by the Management.
Assets costing less than Rs. 0.05 are depreciated fully in the year of
Depreciation on the mineral deposits and mineral rights has been
provided, based on the estimated present value of the consumption over
the remaining estimated useful period, at an equated amount of the
total consumption so arrived at.
Inventories are valued at the lower of cost and net realizable value.
Cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition. The costs of Stores and Spares
and Raw materials are arrived on FIFO basis.
Investments are classified into Long Term and are carried at cost.
Provision for diminution, if any, in the value of each Long Term
Investment is made only if such a decline is other than temporary in
nature in the opinion of the management.
VI. EMPLOYEE BENEFITS:
The Company contributes to the funds administered by the Regional
Provident Fund Commissioner towards Provident Fund. Contributions
payable to an approved Gratuity Fund (a defined benefit plan),
determined by an independent actuary at the Balance Sheet date, are
charged to the Profit & Loss Account. Provision for leave encashment
cost is made on the basis of actuarial valuation at the Balance Sheet
date, carried out by an independent actuary.
VI. FOREIGN EXCHANGE TRANSACTIONS:
Foreign currency transactions are recorded using the exchange rates
prevailing on the dates of the respective transactions. Exchange
differences arising on the foreign currency transactions settled during
the year are recognized in the profit & Loss A/c except that the
exchange differences related to acquisition of fixed assets from a
country outside India are adjusted in the carrying amount of the
related fixed assets.
VIII. REVENUE RECOGNITION:
i) All income and expenditure are accounted on accrual basis, except
ii) In respect of derivative contracts, gain/loss is recognized on
actual settlement of respective contracts.
Internal Consumption of the Company''s end product, which is other wise
marketable, is accounted for at a transfer price and is included under
IX. IMPAIRMENT OF ASSETS:
An Asset is treated as Impaired when the carrying of cost of Assets
exceeds its receivable value. An impairment loss is charged for when
the asset is identified as impaired. The impairment loss received in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
X. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving Substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
XI. DEFERRED INCOME TAXES:
Deferred Tax charge or credit reflects that tax effects of timing
differences between accounting income and taxable income for the
period. The deferred tax charge or credit and the corresponding
deferred tax liability or asset are recognized using the tax rates that
have been enacted or substantial enacted by the Balance Sheet date.
Deferred Tax assets recognized only to that extent there is reasonable
certainty that the assets can be realized in future, however, where
there is unabsorbed depreciation or carry forward losses, deferred tax
assets are recognized only if there is virtual certainty of realization
of such assets. Deferred tax assets are reviewed at each balance sheet
date and written down or written up to reflect the amount that is
reasonable/virtual certainty (as the case may be) to be realized.