1. ACCOUNTING CONCEPTS
The financial statements are prepared under the historical cost
convention (except for fixed assets which are revalued) on an accrual
basis and in accordance with the applicable mandatory Accounting
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumption that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of
Financial statements and the results of operation during the reporting
period end. Although these estimates are based upon management''s best
knowledge of current event and actions, actual results could differ
from these estimates.
3. FIXED ASSETS
Fixed assets are stated at cost adjusted by revaluation of fixed
assets. Cost comprises the purchase price and attributable cost of
bringing the asset to its working condition for its intended use.
4. DEPRECIATION AND AMORTISATION
I) Tangible Assets
i) Depreciation is provided on straight line method at the rates
specified in the schedule XIV to the companies Act, 1956.
ii) Depreciation on additions to fixed assets is being provided on
pro-rata basis from the month of acquisition.
iii) Depreciation on additional value of Revalued Assets is provided on
the basis of life determined by the valuers.
An amount equivalent to depreciation on additional values resulting
from revaluation is withdrawn from Revaluation Reserve and credited to
Profit & Loss Account.
iv) Leasehold land is amortised over the period of lease.
II) Intangible Assets
i) computer software cost is amortised over
ii) Good will is amortised over a period of ten years.
5. IMPAIRMENT OF ASSETS
The carrying amount of assets is reviewed at each balance-sheet date.
If there is any indication of impairment based on internal and external
factor, an impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount.The recoverable amount is
the greater of the asset''s net selling price and value in use.
In assessing value the estimated future cash flows are discounted to
their present value at the weighted average cost of capital . For the
purpose of accounting of impairment due consideration is given to
revaluation of reserves, if any.
After impairment depreciation is provided in the revised carrying
amount of the assets over remaining useful life.
6. GOVERNMENT SUBSIDIES
Government grants/subsidies are accounted for only when there is a
certainty of receipt.
current investments are stated at lower of cost or fair market value.
Long term investments are stated at cost after deducting provisions
made for other than temporary diminution in the value, if any.
Inventories are valued at cost or net realisable value, whichever is
lower. cost comprises all cost of purchase, cost of conversion and
other costs incurred in bringing the inventories to their present
location and condition. cost is determined on a moving weighted average
basis(store spare parts etc and Raw materials). In respect of work in
process and finished goods cost is determined on a monthly moving
weighted average basis.
sale of goods is recognized at the point of sale to customer. sale
includes excise duty. In order to comply with the accounting
interpretation(Asi-14) issued by the Institute of chartered Accountants
of india, sales(including excise duty ) and net sales(excluding excise
duty) is disclosed in Profit & Loss Account.
10. BORROWING COST
interest and other costs in connection with the borrowing of the funds
to the extent related/ attributed to the acquisition/construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
11. RETIREMENT BENEFITS
The company''s contributions to Provident Fund and Superannuation Fund
are charged to Profit & Loss Account. contributions to Gratuity Fund
are made on actuarial valuation and Provision for Leave encashment are
made on the basis of actuarial valuation and charged to Profit & Loss
12. FOREIGN EXCHANGE TRANSACTIONS
Foreign currency transactions are accounted at equivalent rupee value
earned/incurred. Year end balance in current assets/liabilities is
accounted at applicable rates. Exchange difference arising on account
of fluctuation in the rate of exchange is recognised in the Profit &
Investment in subsidiary company is expressed in indian Rupees at the
rate of exchange prevailing at the date of investment.
13. PROVISION FOR CURRENT AND DEFERRED TAX
Provision for current Tax is made on the basis of estimated taxable
income for the current accounting period and in accordance with the
provisions as per income Tax Act, 1961.
Deferred tax resulting from timing difference between book and
taxable profit for the year is accounted for using the tax rates and
laws that have been enacted or substantially enacted as on the balance
sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is a reasonable certainty that the assets
will be adjusted in future. Permanent timing difference adjustments are
not accounted for in provisions.
14. MINES RESTORATION EXPENDITURE
The expenditure on restoration of the mines based on technical
estimates by internal/ External specialists is recognised in the
accounts. The total estimated restoration expenditure is apportioned
over the estimated quantity of mineral resources(likely to be made
available) and provision is made in the accounts based on minerals
mined during the year.
15. OPERATING LEASES
Leases where significant portion of risk and reward of ownership are
retained by the lessor are classified as operating leases and lease
rentals thereon are charged to the Profit & Loss Account.
A provision is recognised when there is a present obligation as a
result of past event and it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation in
respect of which a reliable estimate can be made. These are reviewed
at each Balance-sheet date and adjusted to reflect the current best
estimates. contingent Liabilities are disclosed.