a) Accounting Convention
The financial statements are prepared in accordance with applicable
Accounting Standards in India. A summary of important accounting
policies, which have been applied consistently, is set out below.
This is the first year of application of the revised schedule VI to the
Companies Act, 1956 for the preparation of the financial statements of
the Company. The revised schedule VI introduces some significant
conceptual changes as well as new disclosures. These include
classification of all assets and liabilities into current and
non-current. The previous year figures have also undergone a major
reclassification to comply with the requirements of the revised
b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and reported amount of
revenue and expenses during the reporting period. Difference between
actual results and estimates are recognised in the period in which the
results are known/ materialised.
Current and Non-current classification
All assets and liabilities are classified into current and non-current.
An asset is classified as current when it satisfies any of the
following criteria :
a) It is expected to be realised in, or is intended for sale or
consumption in, the company''s normal operation cycle;
b) It is held primarily for the purpose of being traded;
c) It is expected to be realised within 12 months after the reporting
date ; or
d) It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non-current financial
All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the
a) It is expected to be settled in the company''s normal operating cycle
b) It is held primarily for the purpose of being traded;
c) It is due to be settled within 12 months after the reporting date;
d) The Company does not have an unconditional right to defer settlement
of liability for at least 12 months after the reporting date. Terms of
a liability that could, at the option of the counterparty, result in
its settlement by issue of equity instruments do not affects its
Current liability include current portion of non-current financial
All other liabilities are classified as non-current.
Operating cycle is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents.
c) Fixed Assets
Fixed Assets are stated at cost. Cost includes cost of acquisition,
non-refundable levies, directly attributable cost of bringing the
assets to the working condition for intended use, expenditure during
construction period and interest up to the date the assets is put to
use. (And also refer note i).
Depreciation on Fixed Assets is charged on Straight Line Method as per
Schedule XIV of the companies Act, 1956, except in case of assets added
or disposed off it is charged on prorate basis with reference to the
date of addition/deletion.
Assets costing Rs.5,000/- or less are being fully depreciated in the
year of acquisition Intangible assets are amortized on straight line
basis over the estimated useful life of the assets.
Leasehold quarries and housing tenaments acquired under lease cum sale
agreement shall be amortised after execution of Sale Deeds. Expenditure
incurred on acquisition and development of leasehold quarries are
amortised over the unexpired period of their lease after these become
operational. The company has purchased a Time Sharing Holiday Resort
from Club Mahindra Holidays. The same is effective from April 2003 for
a period of 25 years and will be amortised equally over a period of 25
years. Capital issue expenses are amortised over a period of 5 years.
f) Intangible Assets
Intangible assets comprises of application software stated at its
acquisition cost less accumulated depreciation.
g) Impairment of Assets
In accordance with Accounting Standard 28 AS (28) on ''Impairment of
Assets'' where there is an indication of impairment of the Company''s
assets, the carrying amount of the company''s assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of the assets (or where applicable that of the
cash generating unit to which the asset belongs) is estimated at higher
of its net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of the assets and from its disposal at the end of its
useful life. An Impairment loss is charged to the Profit & Loss Account
in the year in which the carrying amount of the asset or a cash
generating unit exceeds its recoverable amount. The impairment loss
recognised in prior accounting period is reversed if there has been a
change in the estimate of recoverable amount.
Investment are valued at acquisition cost.
i) Raw materials is valued at actual cost or net realisable value
whichever is lower. Stores and spares & packaging materials are valued
at weighted average cost or net realisable value whichever is lower.
ii) Work in Progress and Finished Products are valued at estimated cost
or net realisable value whichever is lower.
iii) Scraps & Rejects are valued at estimated realisable value.
Finished goods and WIP include cost of conversion and other costs
incurred in bringing the inventories to the present location and
Estimated realisable value is calculated on the basis of current
selling price less the .normal selling expenses incurred in making the
j) Foreign Currency Transaction
The transaction in foreign currencies on revenue account are stated at
the rates of exchange prevailing on the date of transaction.
Outstanding Foreign currency assets/liabilities are translated at the
exchange rate prevailing as on Balance Sheet date. Gains or losses on
these assets & liabilities relating to the acquisition of fixed assets
are adjusted to the cost of such fixed assets and those relating to
other accounts are recognised in the Profit & Loss Account.
k) Revenue Recognition
i) Revenue/Income and Cost/Expenditure are generally accounted for on
accrual basis as they are earned or incurred, except, in case of
ii) Subsidy receivable against an expense is deducted from such
iii) Domestic Sales is exclusive of excise duty
iv) Revenue from services is recognised as and when services are
rendered and related costs are incurred.
v) Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the interest rate applicable.
I) Retirement Benefits
Defined contribution scheme : Company''s contribution towards Provident
Fund and Superannuation Fund paid/payable during the year are charged
to Profit & Loss Account.
Defined Benefit Plan : The company has a defined benefit gratuity plan
covering all its employees. Gratuity is covered under a scheme of LIC
and contribution in respect of such scheme are recognized in Profit &
Loss Account. The liability at the Balance Sheet date is provided for
based on actuarial valuation carried out by Life Insurance Corporation
of India in accordance with AS 15 of employee benefits issued by the
Institute of Chartered Accountants of India.
Disclosure in respect of DCS and DBS as required under AS 15 have been
given in Note 5 below to the extent practical and the availability of
Lease rentals under an operating lease, are recognised as an expense in
the statement of profit and loss on a straight line basis over the
n) Expenditure on Expansion
Expenditure directly related to construction activity is capitalised.
Indirect expenditure (including borrowing cost) directly related to
construction or incidental thereto is allocated amongst the assets
created on pro-rata basis.
o) Governments Grants
Government grants in the nature of State Investment subsidy are
accounted for on cash basis and treated as capital reserve.
Income-Tax expense comprises Current tax and Deferred tax charge or
credit. Provision for current tax is made on the assessable income at
the tax rate applicable to the relevant assessment year. The Deferred
tax Asset and Deferred tax Liability is calculated by applying tax rate
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax Assets arising mainly on account of
brought forward losses and unabsored depreciation under tax laws, are
recognised, only if there is a virtual certainty of its realisation,
supported by convincing evidence. Deferred tax Assets on account of
other timing differences are recognised, only to the extent there is a
reasonable certainty of its realisation. At each Balance Sheet date,
the carrying amount of Deferred Tax Assets are reviewed to reassure
q) Earning per share
Basic and diluted earning per share are computed by dividing the net
profit after tax attributable to equity shareholders for the year, with
the weighted number of equity shares outstanding during the year.
r) Contingent Liabilities
Contingent liabilities are not provided for and are generally disclosed
by way of notes to account.