I. Basis of preparation of financial statements
The financial statemets are prepared on accrual basis under the
historical cost convention, in accordance with the Indian Generally
Accepted Accounting Principles (GAPP). Financial statements with the
applicable Accounting Standards (AS) specified in Companies (Accounting
Standard) Rules, 2006 and presentational requirement of the Companies
II. Use of estimates
The preparation of financial statements in conformity with generally
accepted acounting principles in India (GAAP) requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent liabilities and
commitments on the date of financial statements and the result of
operations during the year. Differences between actual results and
estimates are recognized in the year in which the results are known or
materailized. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized prospectively in current
and future periods.
III. Fixed Assets /Depreciation
Fixed assets are stated at cost or at revalued amounts less accumulated
depreciation. Cost of fixed assets includes all incidental expenses and
interest costs on borrowings, attributable to the acquistion of the
assets, upto the date of commissioning of the assets. Depreciation for
the year is computed on the straight line method, as per the rates
prescribed in Schedule XIV to the Companies Act, 1956. Additional
charge of depreciation on amount added on revaluation is adjusted
against revaluation reserve.
Fixed assets are reviewed for impairment on each Balance Sheet date, in
accordance with AS 28 Impairment of Assets.
IV. Revenue Recognition
Revenue from sale of products is recognized when the products are
dispatched against orders from customers.
Sales are stated inclusive of excise duty but net of VAT, CST and Entry
Investments held by the Company which are long term in nature are stated
Items of inventories are measured at lower of cost and net ralizable
value after providing for obsole-scence, if any. Cost of inventories
comprises of cost of purchase, cost of conversion and other costs
including manufacturing overheads incurred in bringing them to the
respective present location and condition. Cost of raw material, stores
and spares, packing materials and coal have been valued at cost
comprising of purchase price, taxes, duties (other than those which are
subsequently recoverable by the Company.
[VIM Foreign Currency transaction
Transaction in Foreign Currency are recorded at excahnge rate prevailing
on the date of transaction,
VIII Retirement Benefits and Employee Benefits Scheme
The Company has various schemes of retirement benefit such as Provident
Fund, Gratuity and Leave encashment benefit.
Further, provision for Gratuity and Leave encashment has been provided in
the Books of Account as below:
i) Leave Encashment
The Employees will get one day earned leave after working of 20 days.
The Employees will get gratuity after completion of 5 years and the
basis of calcultion is 15 days salary out of 26 working days of each
completed year of service of last salary drawn.
a) Current Taxes:
Provision for current taxes is determined on the basis of taxable
income and tax credits as per provision of the Income Tax Act, 1961.
b) Deferred Taxes
Provision for deferred tax is made at the current rates of taxation, on
all timing differences to the extent that it is probable that a
liability or asset will crystalize.
X Borrowing Cost
Borrowing Cost directly attributable to the acquisition or construction
of Fixed Assets are capitalized as part of the cost of the Assets upto
the date the asset is put to use. Other borrowing costs are charged to
revenue in the year in which it is incurred.
XI Contingent Liabilities
All liabilities have been provided for in the accounts except
liabilities of contingent nature, which has been disclosed in the notes
on Financial Statements.