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Accounting Policies of Hindustan Copper Ltd. Company

Mar 31, 2016

CORPORATE INFORMATION

1. Hindustan Copper Limited is a public limited company domiciled in India and earlier incorporated under the provisions of Companies Act, 1956 now governed by Companies Act 2013. Its Shares are listed and traded on Stock Exchanges in India. The company is engaged in exploration, exploitation, mining of copper and copper ore including beneficiation of minerals, smelting and refining.

1. BASIS OF ACCOUNTING:

The financial statements are prepared under historical cost convention from the books of account maintained under accrual basis and in accordance with the Accounting Standards prescribed under Companies Act, 2013.

2. USE OF ESTIMATES :

Financial statements have been prepared based on in-house technical estimates in respect of the following :

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

3.3 FIXED ASSETS :

3.1 Tangible fixed assets are recorded at cost net off of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss if any. Pursuant to Schedule-II of the Companies Act 2013, significant components of the fixed assets with cost comprising 10% or more of the cost of the main assets with or without different useful life of the main assets, as assessed by the Technical Committees of the company, are recorded separately.

3.2 Fixed assets (Intangible) other than software are valued at acquisition cost less accumulated amortization. However, software which are considered as Intangible Assets are fully amortized in the year in which the expenses are incurred.

3.3 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

3.4 In respect of expenditure during construction/development of a new unit/project in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue. Borrowing costs that are attributable to the acquisition or construction of qualifying asset are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

3.5 Expenses incurred for implementation of new projects are carried forward against respective projects till execution. Expenses rendered in fructuous projects abandoned subsequently are provided for in the Statement of Profit & Loss.

3.6 Physical verification of Tangible fixed assets is carried out once in every three years. Shortage/excess, if any, is provided for in the year of identification.

4. DEPRECIATION :

Depreciation on tangible fixed asset and significant components thereof with cost comprising 10% or more of the cost of the main assets is provided on straight line method with reference to the useful life of fixed assets prescribed in Part C of Schedule II to the Companies Act, 2013 or actual useful life of assets assessed by the Technical Committee of the company, whichever is lower. Depreciation on assets acquired prior to 01.04.93 is charged on derived rates by allocating the unamortized value over the remaining life of the asset arrived at. Depreciation in respect of plant & machinery and building of new project is charged from the date of start of commercial production. Software considered as Intangible Assets and are fully amortized in the year in which the expenses are incurred. Assets costing Rs.5000.00 or less individually are depreciated fully in the year in which they are put to use.

5. INVESTMENTS :

5.1 Current investments are individually valued at lower of cost or fair market value at the end of the accounting period.

5.2 Long term investments (Non-current ) are valued at cost. Provision for diminution is made to recognize a decline, other than temporary nature, in the value of investments.

6. GRANTS-IN-AID :

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less accumulated depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to Statement of Profit & Loss.

7. IMPAIRMENT OF ASSETS :

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

8. MINE DEVELOPMENT EXPENDITURE :

8.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

8.2 In case of working mines, where development activities are going on simultaneously : Expenses are apportioned between capital and revenue on the basis of in-house technical estimates.

8.3 In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate. Subsequently, if any ore is reclaimed from overburden, the same is valued on the basis of opening rate of mine development expenditure.

8.4 Expenditure incurred on exploration of new deposits is included in mine development expenditure. If subsequently the exploration activities are found to be not viable, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

8.5 If a working mine is closed due to economic reasons, the unamortized Mine Development Expenditure related to that mine is provided in the books of accounts in the year in which it is decided to close or suspend operation of the mine. If later on, the closed / suspended mines are re-opened and the company remains the owner of the mines, the unamortized Mine Development Expenditure which was fully provided in the year of closure will be written back in the books of accounts in the year of re-opening and the company will be charging amortization year wise based on the estimated remaining life of that mine.

9. MAJOR OVERHAULING EXPENSES :

Only revenue expenditure attributable to major overhaul of smelter and/ or refinery is charged off to the Statement of Profit & Loss in the year of incurrence.

10. Mine Closure Expenditure :

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrence.

11. INVENTORIES :

11.1 Stocks of stores and spare parts, loose tools and materials-in-transit are valued at the lower of the net realizable value and cost. The raw materials are also valued at the lower of the net realizable value and weighted average cost to the unit if the finished goods in which they will be incorporated are expected to be sold below cost. Loose tools when issued are charged off to revenue.

11.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges, administration overhead, etc. The value of slag under work-in-process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrate) and net realizable value.

11.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

11.4 Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

11.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

11.6 Imported materials are valued at the lower of the net realizable value and weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of finalization.

11.7 Provision is made in the accounts every year, for non-moving stores and spares (other than insurance spares) which have not moved for more than five years. Insurance spares are fully provided for on the expiry of the life of the relevant Plant & Machinery.

11.8 Scrap sales are accounted for on delivery of material.

12. CORPORATE SOCIAL RESPONSIBILTY (CSR) :

In compliance with Section 135 of the Companies Act 2013, a CSR Committee has been formed by the company. The area of CSR activities envisaged are drinking water, health, sanitation, education, vocational skills, environment and animal welfare, livelihood and sports and rural development projects which are specified in Schedule VII of the Companies Act 2013. The funds are primarily allocated and utilized throughout the year on these activities through approved trusts / societies as well as directly under the auspices of the company.

13. REVENUE RECOGNITION

13.1 SALES :

13.1.1 Sales are net of discounts other than cash discounts.

13.1.2 In case of sale of Copper Concentrate, Copper Reverts, Anode Slime etc. and tolling of Copper Concentrate of Khetri and Malanjkhand origin, sales / tolling at the end of the accounting period are recorded on provisional basis as per standard parameters for want of actual specifications and differential sales value are recorded only on receipt of actual.

13.2 OTHER INCOME :

13.2.1 Claims :

Claims on account of liquidated damages and insurance are accounted for as and when these are realized and/or considered recoverable by the company.

13.2.2 Conversion charges :

Income from conversion of job work is accounted for on the basis of actual quantity dispatched.

13.3.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

14. FOREIGN EXCHANGE TRANSACTIONS:

14.1 Transactions in foreign currency on initial recognition in the reporting currency are recorded at the rate of exchange prevailing on the date of transaction.

14.2 Monetary items denominated in foreign currencies at the year end are translated at the year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

14.3 Non-monetary items are translated using the exchange rates prevailing on the date of the transaction or on the date when the fair value of such item was determined.

14.4 Exchange differences arising on settlement of monetary items or on reporting of monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements are recognized as income or expense in the period in which they arise and adjusted to the Statement of Profit & Loss except in respect of non-current liabilities/non-current foreign currency monetary items, related to acquisition of depreciable Fixed asset/ Capital work in progress in which case, these are adjusted to the carrying cost of respective Fixed Asset/ Capital work in progress.

14.5 The Company has elected to account for exchange differences arising on reporting of Long-term foreign currency monetary items in accordance with Companies (Accounting Standards) Amendment Rules, 2009 pertaining to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009 (as amended on 29th December, 2011). Accordingly, the effect of exchange differences on foreign currency loans of the Company is accounted by addition or deduction to the cost of the assets so far it relates to depreciable capital assets and shall be depreciated over the balance life of the asset and in other cases by transfer to "Foreign Currency Monetary Item Translation Difference Account" to be written off over the useful life of the assets / amortized over the balance period of the long-term monetary items (assets or liability) by recognition as income or expense in each of such periods."

15. RETIREMENT BENEFITS:

15.1. Gratuity, Leave encashment and Leave Travel Concession:

Liabilities towards gratuity leave encashment for all employees and leave travel concession for non- executive employees as at the end of the year are provided for on the basis of actuarial valuation.

The actuarial gains / losses in respect of "Employee Benefit Plans" are recognized in the Statement of Profit & Loss.

15.2. Deficit in Provident Fund:

Deficit, if any, in the accounts of Provident Fund Trust ascertained on the basis of last audited accounts of the Trust is accounted for as a charge to Revenue.

15.3 Voluntary Retirement Expenses :

15.3.1 Paid out of own fund :

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with Accounting Standard -15.

15.3.2 Paid out of Government Grant :

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.

16. BORROWING COST :

Borrowing costs to include interest, commitment charges, commission, amortisation of ancillary costs, amortisation of discounts/ premium related to borrowing, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.

Interest/ finance cost on loans specifically borrowed for new and expansion projects upto the start of commercial production is charged to the capital cost of the projects concerned. All other borrowings cost are charged to revenue.

17. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed at Balance Sheet Date every year to reassess the realisibility thereof.

18. PROVISIONS AND CONTINGENT LIABILITIES:

A provision is recognized if as a result of past event / occurrence the company has a present legal obligation that could be reliably estimated and it is probable that an outflow of economic benefits will be necessitated to settle such obligation. Provisions are determined by the reasonable and reliable estimate of the outflow of economic benefits required to settle such obligation as on the Balance Sheet date.

Wherever no reliable estimate could be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Liabilities are disclosed in the General Notes forming part of the accounts.

19. EVENTS OCCURING AFTER THE BALANCE SHEET DATE :

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

20. PRIOR PERIOD AND EXTRA ORDINARY ITEMS:

The nature and amount of prior period items and extra-ordinary items are separately disclosed in the Statement of Profit & Loss in a manner that their impact on the Profit & Loss can be perceived. However, each prior period item of Rs.50,000.00 and below are charged to natural heads of accounts.

21. RESEARCH AND DEVELOPMENT EXPENDITURE :

Expenditure on research and development is charged off to the Statement of Profit & Loss in the year it is incurred. Expenditure on fixed assets in this regard, if any, is capitalized.

Details of Claims against the Company not acknowledged as debt (of 1(i)(a) above)

VAT/CST/ENTRY TAX

There are demand notices totaling to Gross Demand of Rs.972.27 lac (Previous Year Rs.1183.43 lac) from various State Revenue Authorities regarding VAT/CST/Entry Tax. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

EXCISE DUTY

There are demand notices totaling to Gross Demand of Rs.4797.14 lac (Previous Year Rs.4746.84 lac) from Central Excise Authorities regarding Excise Duty. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

INCOME TAX

There are Income Tax demand notices totaling to Gross Demand of Rs.404.42 lac (Previous Year Rs.4538.86 lac). The company is contesting the said demands before the Appellate Authorities. The management as well as the income tax consultant are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.


Mar 31, 2015

1. BASIS OF ACCOUNTING:

The financial statements are prepared under historical cost convention from the books of account maintained under accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India / Companies Act 2013.

2. USE OF ESTIMATES :

Financial statements have been prepared based on in-house technical estimates in respect of the following :

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

3.3 FIXED ASSETS :

3.1 Fixed assets (Tangible) are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any.

3.2 Fixed assets (Intangible) other than software are valued at acquisition cost less accumulated amortization. Software considered as intangible assets and are fully charged to revenue in the year of incurrence.

3.3 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

3.4 In respect of expenditure during construction/development of a new unit/project in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue.

3.5 Expenses incurred for implementation of new projects are carried forward against respective projects till execution. Expenses rendered in fructuous projects abandoned subsequently are provided for in the Statement of Profit & Loss.

3.6 Physical verification of Tangible fixed assets is carried out once in every three years. Shortage/excess, if any, is provided for in the year of identification.

4. DEPRECIATION :

Depreciation on (Tangible) fixed assets is provided on straight line method with reference to the useful life of fixed assets prescribed in Part C of Schedule II to the Companies Act, 2013 or actual useful life of assets, whichever is lower. Depreciation on assets acquired prior to 01.04.93 is charged on derived rates by allocating the unamortized value over the remaining life of the asset arrived at. Depreciation in respect of plant & machinery and building of new project is charged from the date of start of commercial production.

Software considered as Intangible Assets and are fully amortized in the year in which the expenses are incurred. Assets costing Rs. 5000.00 or less individually are depreciated fully in the year in which they are put to use.

5. INVESTMENTS :

5.1 Current investments are individually valued at lower of cost or fair market value at the end of the accounting period.

5.2 Long term investments (Non-current) are valued at cost. Provision for diminution is made to recognize a decline, other than temporary nature, in the value of investments.

6. GRANTS-IN-AID :

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less accumulated depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to Statement of Profit & Loss.

7. IMPAIRMENT OF ASSETS :

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

8. MINE DEVELOPMENT EXPENDITURE :

8.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

8.2 In case of working mines, where development activities are going on simultaneously : Expenses are apportioned between capital and revenue on the basis of in-house technical estimates.

8.3 In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate. Subsequently, if any ore is reclaimed from overburden, the same is valued on the basis of opening rate of mine development expenditure.

8.4 Expenditure incurred on exploration of new deposits is included in mine development expenditure. If subsequently the exploration activities are found to be not viable, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

8.5 If a working mine is closed due to economic reasons, the unamortized Mine Development Expenditure related to that mine is provided in the books of accounts in the year in which it is decided to close or suspend operation of the mine. If later on, the closed / suspended mines are re-opened and the company remains the owner of the mines, the unamortized Mine Development Expenditure which was fully provided in the year of closure will be written back in the books of accounts in the year of re-opening and the company will be charging amortization year wise based on the estimated remaining life of that mine.

9. MAJOR OVERHAULING EXPENSES :

Only revenue expenditure attributable to major overhaul of smelter and/ or refinery is charged off to the Statement of Profit & Loss in the year of incurrence.

10. MINE CLOSURE EXPENDITURE :

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement , not being material, are charged off on actual incurrence.

11. INVENTORIES :

11.1 Stocks of stores and spare parts, loose tools and materials-in-transit are valued at the lower of the net realizable value and cost. The raw materials are also valued at the lower of the net realizable value and weighted average cost to the unit if the finished goods in which they will be incorporated are expected to be sold below cost. Loose tools when issued are charged off to revenue.

11.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges, etc. The value of slag under work-in-process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrate) and net realizable value.

11.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

11.4. Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

11.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

11.6 Imported materials are valued at the lower of the net realizable value and weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of finalization.

11.7 Provision is made in the accounts every year, for non-moving stores and spares (other than insurance spares) which have not moved for more than five years. Insurance spares are fully provided for on the expiry of the life of the relevant Plant & Machinery.

11.8 Scrap sales are accounted for on delivery of material.

12. CORPORATE SOCIAL RESPONSIBILTY (CSR) :

In compliance to Section 135 of the Companies Act 2013, a CSR Committee has been formed by the company. The area of CSR activities envisaged are drinking water, health, sanitation, education, vocational skills, environment and animal welfare, livelihood and sports and rural development projects which are specified in Schedule VII of the Companies Act 2013. The funds are primarily allocated and utilized throughout the year on these activities through approved trusts / societies as well as directly under the auspices of the company.

13. REVENUE RECOGNITION

13.1 SALES :

13.1.1Sales are net of discounts other than cash discounts.

13.1.2 In case of sale of Copper Concentrate, Copper Reverts, Anode Slime etc. and tolling of Copper Concentrate of Khetri and Malanjkhand origin, sales / tolling at the end of the accounting period are recorded on provisional basis as per standard parameters for want of actual specifications and differential sales value are recorded only on receipt of actual.

13.2 OTHER INCOME :

13.2.1 Claims :

Claims on account of liquidated damages and insurance are accounted for as and when these are realized and/or considered recoverable by the company.

13.2.2 Conversion charges :

Income from conversion of job work is accounted for on the basis of actual quantity desptched.

13.3.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

14. FOREIGN EXCHANGE TRANSACTIONS :

14.1 Foreign currency transactions on initial recognition in the reporting currency are accounted for at the exchange rates prevailing on the date of transaction.

14.2 At each Balance Sheet date, foreign currency monetary items are translated using the mean exchange rates prevailing on the Balance Sheet date and non-monetary items are translated using the exchange rate prevailing on the date of transaction or on the date when the fair value of such item was determined.

14.3 The loss or gain thereon and also the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense and adjusted to the Statement of Profit & Loss.

15. RETIREMENT BENEFITS :

15.1. Gratuity, Leave encashment and Leave Travel Concession :

Liabilities towards gratuity, leave encashment for all employees and leave travel concession for non- executive employees as at the end of the year are provided for on the basis of actuarial valuation.

The actuarial gains / losses in respect of " Employee Benefit Plans" are recognized in the Statement of Profit & Loss.

15.2. Deficit in Provident Fund :

Deficit, if any, in the accounts of Provident Fund Trust ascertained on the basis of last audited accounts of the Trust is accounted for as a charge to Revenue.

15.3 Voluntary Retirement Expenses :

15.3.1 Paid out of own fund :

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with Accounting Standard -15.

15.3.2 Paid out of Government Grant :

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.

16. BORROWING COST :

Interest/finance cost on loans specifically borrowed for new and expansion projects upto the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

17. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed at Balance Sheet Date every year to reassess the realisibility thereof.

18. PROVISIONS AND CONTINGENT LIABILITIES:

A provision is recognized if as a result of past event / occurrence the company has a present legal obligation that could be reliably estimated and it is probable that an outflow of economic benefits will be necessitated to settle such obligation. Provisions are determined by the reasonable and reliable estimate of the outflow of economic benefits required to settle such obligation as on the Balance Sheet date.

Wherever no reliable estimate could be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Liabilities are disclosed in the General Notes forming part of the accounts.

19. EVENTS OCCURING AFTER THE BALANCE SHEET DATE :

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

20. PRIOR PERIOD AND EXTRA ORDINARY ITEMS:

The nature and amount of prior period items and extra-ordinary items are separately disclosed in the Statement of Profit & Loss in a manner that their impact on the Profit & Loss can be perceived. However, each prior period item of Rs. 50,000.00 and below are charged to natural heads of accounts.

21. RESEARCH AND DEVELOPMENT EXPENDITURE :

Expenditure on research and development is charged off to the Statement of Profit & Loss in the year it is incurred. Expenditure on fixed assets in this regard, if any, is capitalized.

The above expenditure is in addition to the expenses shown under the respective natural head of accounts indicated and charged in the Statement of Profit and Loss Account for the year and in the relevant schedules thereof. Amortisation during the year is in relation to the expenses incurred on mines which are under operation/ production and does not include expenditure on prospecting of minerals in new mines area.

PARTICULARS OF LOANS AND ADVANCES DUE FROM DIRECTORS

Amount due at the end of the year Rs. Nil Rs. Nil

Loans and advances due by firms or private companies in which any Director of the Company is a Partner or a director or a member amounts to Rs. Nil (Previous year Rs. Nil)

1) The amount shown under 'Debts Outstanding - Considered doubtful' are debts outstanding for a period exceeding 6 months from the date they became due for payment.

2) Debt due by Directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any Director of the Company is a partner or a Director or a member amounts to Rs. Nil (Previous year Rs. Nil).

PARTICULARS OF LOANS AND ADVANCES DUE FROM DIRECTORS

i) Amount due at the end of the year Rs. Nil Rs. Nil

ii) Advance due by firms or private companies in which any Director of the Company is a Partner or a director or a member amounts to Rs. Nil (Previous year Rs. Nil)

In addition the Whole-time Directors are allowed the use of company car for private purpose and have been provided with residential accomodation as per terms of their appointment / Government guidelines and the charges are recovered at the rates prescribed by the Government.

* Amortisation during the year is in relation to the expenses incurred on mines which are under operation/ production and does not include expenditure on prospecting of minerals in new mines area.


Mar 31, 2014

A. BASIS OF ACCOUNTING :

The financial statements are prepared under historical cost convention from the books of account maintained on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

b. USE OF ESTIMATES :

Financial statements have been prepared based on in-house technical estimates in respect of the following :

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

c. FIXED ASSETS :

c.1. Fixed assets are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any.

c.2. Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

c.3. In respect of expenditure during construction/development of a new unit/project in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue.

c.4. Expenses incurred for implementation of new projects are carried forward against respective projects till execution. Expenses rendered in fructuous on projects abandoned subsequently are provided in the Profit & Loss Account.

c.5. Physical verification of fixed assets is carried out once in every three years. Shortage/excess, if any, is provided for in the year of identification.

d. DEPRECIATION :

Depreciation on fixed assets is provided on straight line method at the rates prescribed in schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior to 1.04.93 is charged on derived rates by allocating the unamortized value over the remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the Companies Act, 1956. Depreciation in respect of plant & machinery and building of new project is charged from the date of commercial production.

e. INVESTMENTS :

e.1 Current investments are individually valued at lower of cost or fair market value.

e.2 Long term investments (Non-current ) are valued at cost. Provision for diminution is made to recognize a decline, other than temporary nature, in the value of investments.

f. GRANTS-IN-AID :

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to profit and loss account.

g. IMPAIRMENT OF ASSETS:

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire one plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

h. MINE DEVELOPMENT EXPENDITURE:

h.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

h.2 In case of working mines, where development activities are going on simultaneously: Expenses are apportioned between capital or revenue on the basis of in-house technical estimates.

h.3 In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate. Subsequently if any ore is reclaimed from overburden, the same is valued on the basis of opening rate of mine development expenditure.

h.4. Expenditure incurred on exploration of new deposits is included in mine development expenditure. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

i. MAJOR OVERHAULING EXPENSES :

Only revenue expenditure attributable to major overhaul of smelter or refinery is charged off to the Accounts in the year of incurrence.

j. Mine Closure Expenditure:

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrence.

k. INVENTORIES:

k.1. Stocks of stores and spare parts, loose tools and materials-in-transit are valued at cost. The raw materials are valued at the lower of the net realizable value and weighted average cost to the unit if the finished goods in which they will be incorporated are expected to be sold below cost. Loose tools when issued are charged off to revenue.

k.2. Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges etc. The value of slag under work in process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrate) and net realizable value.

k.3. The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

k.4. Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

k.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

k.6. Imported materials are valued at weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of finalization.

k.7. Provision is made in the accounts every year, for non-moving stores and spares (other than insurance spares) which have not moved for more than five years. Insurance spares purchased subsequent to purchase of original asset are charged to revenue on consumption.

k.8 Scrap sales are accounted for on delivery of material. l. REVENUE RECOGNITION

l.1 SALES :

1.1.1 Sales are net of discounts other than cash discounts.

1.1.2 In case of sale of Copper Concentrate, Copper Reverts, Anode Slime etc. and tolling of Copper Concentrate of Khetri and Malanjkhand origin, sales / tolling at the end of the accounting period are recorded on provisional basis as per standard parameters for want of actual specifications and differential sales value are recorded only on receipt of actual.

1.2 OTHER INCOME:

1.2.1 Claims :

Claims on account of liquidated damages and insurance are accounted for as and when these are realized and/or considered recoverable by the company.

1.2..2 Conversion charges :

Income from conversion of job work is accounted for on the basis of dispatches made .

1.3.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

m. FOREIGN EXCHANGE TRANSACTIONS:

m.1 Foreign currency transactions on initial recognition in the reporting currency are accounted for at the exchange rates prevailing on the date of transaction.

m.2 At each Balance Sheet date, foreign currency monetary items are translated using the mean exchange rates prevailing on the Balance Sheet date and non-monetary items are translated using the exchange rate prevailing on the date of transaction or on the date when the fair value of such item was determined.

m.3 The loss or gain thereon and also the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense and adjusted to the statement of Profit and Loss Account except where such liabilities and / or transactions related to fixed assets / projects and these were incurred / entered into before 1.4.2004, in which case, these are adjusted to the cost of respective fixed assets.

n. RETIREMENT BENEFITS:

n.1. Gratuity, Leave encashment and Leave Travel Concession:

Liabilities towards gratuity leave encashment for all employees and leave travel concession for non-executive employees as at the end of the year are provided for on the basis of actuarial valuation.

The actuarial gains / losses in respect of "Employee Benefit Plans" are recognized in the statement of Profit & Loss Account.

n.2. Deficit in Provident Fund:

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of accrued liability, as ascertainable on the basis of last accounts closed by the Provident Fund Trust.

n.3 Voluntary Retirement Expenses

n.3.1 Paid out of own fund :

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with AS-15.

n.3.2 Paid out of Government Grant :

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.

o. BORROWING COST:

Interest/finance cost on loans specifically borrowed for new and expansion projects up to the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

p. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed as at Balance Sheet Date every year to reassess the realisibility thereof.

q. GENERAL :

q.1 Contingent Liability :

Contingent Liabilities are disclosed in the Notes forming part of the accounts.

q.2 Events occurring after the Balance Sheet date :

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

q.3 Prior Period & Extra Ordinary Items:

The nature and amount of prior period items and extra-ordinary items are separately disclosed in the Statement of Profit & Loss in a manner that their impact on the Profit & Loss can be perceived. However each prior period item of Rs 50,000.00 and below are charged to natural heads of accounts.

q.4 Research and Development Expenditure :

Expenditure on research and development is charged off to Statement of Profit & Loss in the year it is incurred. Expenditure on fixed assets in this regard is capitalized.


Mar 31, 2013

A. BASIS OF ACCOUNTING:

The financial statements are prepared under historical cost convention from the books of account maintained on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

b. USE OF ESTIMATES:

Financial statements have been prepared based on in-house technical estimates in respect of the following:

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

c. FIXED ASSETS:

c.1. Fixed assets are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any. c.2 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

c.3 In respect of expenditure during construction of a new unit in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue. c.4 Expenses incurred for implementation of new projects are carried forward against respective projects till execution. Expenses rendered in fructuous on projects abandoned subsequently are provided in the Profit & Loss Account.

c.5 Physical verification of fixed assets is carried out once in every three years. Shortage/excess, if any, is provided for in the year of identification.

d. DEPRECIATION:

Depreciation on fixed assets is provided on straight line method at the rates prescribed in schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior to 1.04.93 is charged on derived rates by allocating the unamortized value over the remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the Companies Act,1956. Depreciation in respect of plant & machinery and building of new project is charged from the date of commercial production.

e. INVESTMENTS:

e.1 Current investments are individually valued at lower of cost or fair market value.

e.2 Long term investments (Non-current ) are valued at cost. Provision for diminution is made to recognize a decline, other than temporary nature, in the value of investments.

f. GRANTS-IN-AID:

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to profit and loss account.

g. IMPAIRMENT OF ASSETS:

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire one plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

h. MINE DEVELOPMENT EXPENDITURE:

h.1 In case of underground mines: The expenditure on development of a new mine in all cases and on subsequent development of a working mine is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

h.2 In case of working mines, where development activities are going on simultaneously: Expenses are apportioned between capital or revenue on the basis of in-house technical estimates.

h.3 In respect of open cast mines: The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate.

h.4 Expenditure incurred on exploration of new deposits is included in mine development expenditure. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

i. MAJOR OVERHAULING EXPENSES:

The expenditure attributable to major overhaul of smelter/refinery is charged to the Accounts in the year of incurrence.

j. Mine Closure Expenditure:

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrence.

k. INVENTORIES:

k.1 Stocks of stores and spare parts, loose tools and materials-in-transit are valued at cost. The raw materials are valued at the lower of the net realizable value and weighted average cost to the unit if the finished goods in which they will be incorporated are expected to be sold below cost. Loose tools when issued are charged off to revenue.

k.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges etc. The value of slag under work in process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrate) and net realizable value. k.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges. k.4 Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation. k.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

k.6 Imported materials are valued at weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of finalization. k.7 Provision is made in the accounts every year, for non-moving stores and spares (other than insurance spares) which have not moved for more than five years. k.8 Scrap sales are accounted for on delivery of material.

l. REVENUE RECOGNITION

l.1 SALES:

I.1.1Sales are net of discounts other than cash discounts.

1.1.2 In case of sale of Copper Concentrate, Copper Reverts, Anode Slime etc. and tolling of Copper Concentrate of Khetri and Malanjkhand origin, sales / tolling at the end of the accounting period are recorded on provisional basis as per standard parameters for want of actual specifications and differential sales value are recorded only on receipt of actual.

1.2 OTHER INCOME:

1.2.1 Claims:

Claims on account of liquidated damages and insurance are accounted for as and when these are realized and/or considered recoverable by the company.

1.2.2 Conversion charges:

Income from conversion of job work is accounted for on the basis of dispatches made.

1.3.3 Interest on L/C bills:

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

m. FOREIGN EXCHANGE TRANSACTIONS:

m.1 Foreign currency transactions on initial recognition in the reporting currency are accounted for at the exchange rates prevailing on the date of transaction. m.2 At each Balance Sheet date, foreign currency monetary items are translated using the mean exchange rates prevailing on the Balance Sheet date and non-monetary items are translated using the exchange rate prevailing on the date of transaction or on the date when the fair value of such item was determined.

m.3 The loss or gain thereon and also the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense and adjusted to the statement of Profit and Loss Account except where such liabilities and / or transactions related to fixed assets / projects and these were incurred / entered into before 1.4.2004, in which case, these are adjusted to the cost of respective fixed assets.

n. RETIREMENT BENEFITS:

n.1 Gratuity, Leave encashment and Leave Travel Concession:

Liabilities towards gratuity, leave encashment for all employees and leave travel concession for non- executive employees as at the end of the year are provided for on the basis of actuarial valuation.

The actuarial gains / losses in respect of " Employee Benefit Plans" are recognized in the statement of Profit & Loss Account.

n.2 Deficit in Provident Fund:

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of accrued liability, as ascertainable on the basis of last accounts closed by the Provident Fund Trust.

n.3 Voluntary Retirement Expenses

n.3.1 Paid out of own fund:

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with AS-15.

n.3.2 Paid out of Government Grant:

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.

o. BORROWING COST:

Interest/finance cost on loans specifically borrowed for new and expansion projects up to the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

p. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed as at Balance Sheet Date every year to reassess the realisibility thereof.

q. GENERAL:

q.1 Contingent Liability:

Contingent Liabilities are disclosed in the Notes forming part of the accounts.

q.2 Events occurring after the Balance Sheet date:

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

q.3 Prior Period & Extra Ordinary Items:

The nature and amount of prior period items and extra-ordinary items are separately disclosed in the Statement of Profit & Loss in a manner that their impact on the current Profit & Loss can be perceived.

q.4 Research and Development Expenditure:

Expenditure on research and development is charged off to Statement of Profit & Loss in the year it is incurred. Expenditure on fixed assets in this regard is capitalized.


Mar 31, 2012

1. BASIS OF ACCOUNTING :

The financial statements are prepared under historical cost convention from the books of account maintained on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

2. USE OF ESTIMATES :

Financial statements have been prepared based on in-house technical estimates in respect of the following:

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

3. FIXED ASSETS :

3.1. Fixed assets are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any.

3.2 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of fmalization of bills.

3.3 In respect of expenditure during construction of a new unit in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue.

3.4 Expenses incurred for implementation of new projects are carried forward against respective project s till execution. Expenses rendered infructuous on projects abandoned subsequently are provided in the Profit & Loss Account.

3.5 Physical verification of fixed assets is carried out once in every three years. Shortage/excess, if any, is provided for in the year of identification.

4. DEPRECIATION:

Depreciation on fixed assets is provided on straight line method at the rates prescribed in schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior to 1.04.93 is charged on derived rates by allocating the unamortized value over the remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the Companies Act, 1956. Depreciation in respect of plant & machinery and building of new project is charged from the date of commercial production.

5. GRANTS-IN-AID:

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to profit and loss account.

6. IMPAIRMENT OF ASSETS :

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire one plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

7. MINE DEVELOPMENT EXPENDITURE :

7.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine in specified cases is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

7.2 In case of working mines, where development activities are going on simultaneously : Expenses are apportioned between capital or revenue on the basis of inhouse technical estimates.

7.3 In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate.

7.4. Expenditure incurred on exploration of new deposits is included in mine development expenditure. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

8. MAJOR OVERHAULING EXPENSES :

The expenditure attributable to major overhaul of smelter/refinery is charged to the Accounts in the year of incurrence.

9. INVENTORIES:

9.1 Stocks of stores and spare parts, loose tools and materials-in-transit are valued at cost. The raw materials are valued at the lower of the net realizable value and weighted average cost to the unit if the finished goods in which they will be incorporated are expected to be sold below cost. Loose tools when issued are charged off to revenue.

9.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges etc. The value of slag under work in process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrate) and net realizable value.

9.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

9.4. Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

9.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

9.6 Imported materials are valued at weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of fmalization.

9.7 Provision is made in the accounts every year, for non-moving stores and spares (other than insurance spares) which have not moved for more than five years.

9.8 Scraps are accounted for on realization.

10. SALES:

Sales are net of discounts other than cash discounts.

11. OTHER INCOME :

11.1 Claims:

Claims on account of liquidated damages and insurance are accounted for as and when these are realised and/or considered recoverable by the company.

11.2 Conversion charges :

Income from conversion of job work is accounted for on the basis of dispatches made .

11.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

12. RETIREMENT BENEFITS :

12.1. Gratuity, Leave encashment and Leave Travel Concession :

Liabilities towards gratuity, leave encashment for all employees and leave travel concession for non-executive employees as at the end of the year are provided for on the basis of actuarial valuation.

The actuarial gains / losses in respect of" Employee Benefit Plans" are recognized in the statement of Profit & Loss Account.

12.2. Deficit in Provident Fund:

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of accrued liability, as ascertainable on the basis of last accounts closed by the Provident Fund Trust.

13. BORROWING COST :

Interest/finance cost on loans specifically borrowed for new and expansion projects up to the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

14. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed as at Balance Sheet Date every year to reassess the realisibility thereof.

15. GENERAL:

15.1. Foreign Currency Transactions :

Transactions in foreign currencies are recognized at applicable prevailing rates on the date of settlement. Year-end balances of receivables/payables are translated at applicable forward contract/year-end rates and resultant translation differences relating to fixed assets are adjusted against fixed assets and the balance is recognized in the Profit and Loss Account.

15.2 Contingent Liability :

Contingent Lliabilities are disclosed in the Notes forming part of the accounts.

15.3 Events occurring after the Balance Sheet date :

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

15.4 Prior Period & Extra Ordinary Items:

The nature and amount of prior period items and extra-ordinary items are separately disclosed in the statement of Profit & Loss in a manner that their impact on the current Profit & Loss can be perceived.

15.5 Research and Development Expenditure :

Expenditure on research and development is charged off to Profit & Loss account in the year it is incurred. Expenditure on fixed assets in this regard is capitalized.

15.6 Mine Closure Expenditure :

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrance.

16. Voluntary Retirement Expenses :

16.1. Paid out of own fund:

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with AS-15.

16.2. Paid out of Government Grant:

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.


Mar 31, 2011

1. BASIS OF ACCOUNTING:

The financial statements are prepared under historical cost convention from the books of account maintained on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

2. USE OF ESTIMATES:

Financial statements have been prepared based on in-house technical estimates in respect of the following:

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

3. FIXED ASSETS :

3.1 Fixed assets are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any.

3.2 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

3.3 In respect of expenditure during construction of a new unit in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue.

3.4 Expenses incurred for implementation of new projects are carried forward against respective projects till execution. Expenses rendered infructuous on proj ects abandoned subsequently are provided in the Profit & Loss Account.

3.5 Physical verification of fixed assets is carried out once in every five years. Shortage/excess, if any, is provided for in the year of identification.

4. DEPRECIATION:

Depreciation on fixed assets is provided on straight line method at the rates prescribed in schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior too 1.04.93 is charged on derived rates by allocating the unamortized value over the remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the Companies Act,1956. Depreciation in respect of plant & machinery and building of new project is charged from the date of commercial production.

5. GRANTS-IN-AID:

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to profit and loss account.

6. IMPAIRMENT OF ASSETS :

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire one plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

7. MINE DEVELOPMENT EXPENDITURE :

7.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine in specified cases is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

7.2 In case of working mines, where development activities are going on simultaneously : Expenses are apportioned between capital or revenue on the basis of inhouse technical estimates.

7.3 In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate.

7.4 Expenditure incurred on exploration of new deposits is included in mine development expenditure. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

8. MAJOR OVERHAULING EXPENSES :

The expenditure attributable to major overhaul of smelter/refinery is charged to the Accounts in the year of incurrence.

9. INVENTORIES:

9.1 Stocks of raw materials, stores and spare parts, loose tools and materials-in-transit are valued at cost. Loose tools when issued are charged off to revenue.

9.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges etc. The value of slag under work in process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrates) and net realizable value.

9.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

9.4 Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

9.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

9.6 Imported materials are valued at weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year offinalization.

9.7 Once in every three years provision is made in the accounts for non-moving stores and spares (other than insurance spares) which have not moved for more than five years.

9.8 Scraps are accounted for on realization.

10. SALES:

Sales are net of discounts other than cash discounts.

11. OTHER INCOME :

11.1 Claims:

Claims on account of liquidated damages and insurance are accounted for as and when these are realised and/or considered recoverable by the company.

11.2 Conversion charges :

Income from conversion of job work is accounted for on the basis of dispatches made .

11.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

12. RETIREMENT BENEFITS:

12.1 Gratuity and Leave encashment:

Liabilities towards gratuity and leave encashment to employees as at the end of the year are provided for on the basis of actuarial valuation.

12.2 Deficit in Provident Fund:

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of accrued liability, as ascertainable on the basis of last accounts closed by the Provident Fund Trust.

13. BORROWING COST:

Interest/finance cost on loans specifically borrowed for new and expansion projects up to the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

14. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed as at each Balance Sheet Date to reassess the realisibility thereof.

15. GENERAL:

15.1. Foreign Currency Transactions :

Transactions in foreign currencies are recognized at rates on the date of the transactions are settled. Year-end balances of receivables/payables are translated at applicable forward contract/year-end rates and resultant translation differences relating to fixed assets are adjusted against fixed assets and the balance is recognized in the Profit and Loss Account.

15.2 Contingent Liability:

Contingent Lliabilities are disclosed in the Notes forming part of the accounts.

15.3 Events occurring after the Balance Sheet date:

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

15.4 Prior Period & Extra Ordinary Items:

(i) The nature and amount of prior period items (ii) extra-ordinary items are separately disclosed in the statement of Profit & Loss in a manner that their impact on the current Profit & Loss can be perceived.

15.5 Research and Development Expenditure :

Expenditure on research and development is charged off to Profit & Loss account in the year it is incurred. Expenditure on fixed assets in this regard is capitalized.

15.6 Mine Closure Expenditure:

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrance.

16. Voluntary Retirement Expenses:

16.1 Paid out of own fund:

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with AS-15.

16.2 Paid out of Government Grant:

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.


Mar 31, 2010

1. BASIS OF ACCOUNTING :

The financial statements are prepared under historical cost convention from the books of account maintained on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

2. USE OF ESTIMATES :

Financial statements have been prepared based on in-house technical estimates in respect of the following:

- Allocation of service shaft expenses, underground mining expenditure between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plants.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

3. FIXED ASSETS:

3.1. Fixed assets are recorded at cost net of CENVAT and VAT credit wherever applicable less accumulated depreciation and impairment loss, if any.

3.2 Pending reconciliation/receipt of the final bills against capital items, capitalization is done on the basis of cost booked and depreciation is charged accordingly. Price differences, if any, are adjusted in the year of finalization of bills.

3.3 In respect of expenditure during construction of a new unit in a new location, all direct capital expenditure as well as all indirect expenditure incidental to construction are capitalized allocating to various items of fixed assets on an appropriate basis. Expansion programme involving construction concurrently run with normal production activities in an existing unit, all direct capital expenditure in relation to such expansion are capitalized but indirect expenditure are charged to revenue.

3.4 Expenses incurred for implementation of new projects are carried forward against respective project still execution. Expenses rendered infructuous on projects abandoned subsequently are provided in the Profit & Loss Account.

3.5 Physical verification of fixed assets is carried out once in every five years. Shortage/excess, if any, is provided for in the year of identification.

4. DEPRECIATION:

Depreciation on fixed assets is provided on straight line method at the rates prescribed in schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior to 1.04.93 is charged on derived rates by allocating the unamortized value over the remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the Companies Act, 1956. Depreciation in respect of plant & machinery and building of new project is charged from the date of commercial production.

5. GRANTS-IN-AID.

Fixed assets acquired out of funds provided by the Government by way of grants-in-aid are stated in the books at cost less depreciation and special reserve created for the same is apportioned over the life of the assets by transfer to profit and loss account.

6. IMPAIRMENT OF ASSETS :

The Company reviews the carrying amount of its fixed assets, whenever circumstances indicate that the carrying amount of the asset is less than the realizable value. The Company assesses recoverability of the carrying value of the assets by grouping assets of entire one plant as Cash Generating Unit (CGU). The Company then estimates the discounted future cash flows expected to result from CGU. If the estimated discounted future cash flow expected to result from the use of the asset are less than its carrying amount, the asset is deemed to be impaired. The amount of impairment is measured as the difference between the carrying value and fair market value.

7. MINE DEVELOPMENT EXPENDITURE :

7.1 In case of underground mines : The expenditure on development of a new mine in all cases and on subsequent development of a working mine in specified cases is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

7.2 In case of working mines, where development activities are going on simultaneously : Expenses are apportioned between capital or revenue on the basis of inhouse technical estimates.

7.3 In respect of open cast mines: The expenditure on removal of waste and overburden, is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate.

7.4. Expenditure incurred on exploration of new deposits is included in mine development expenditure. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

8. MAJOR OVERHAULING EXPENSES :

The expenditure attributable to major overhaul of smelter/refinery is charged to the Accounts in the year of incurrence.

9. INVENTORIES:

9.1 Stocks of raw materials, stores and spare parts, loose tools and materials-in-transit are valued at cost. Loose tools when issued are charged off to revenue.

9.2 Finished goods and work-in-process are valued at the lower of the net realizable value and weighted average cost to the unit. The cost is exclusive of financing cost, such as, interest, bank charges etc. The value of slag under work in process is taken at equivalent value to the extent credited to the process, where the said products have been generated. The reverts under work- in-process are valued at lower of cost (equivalent value of concentrates) and net realizable value.

9.3 The stock of anode slime arising from treatment and refining processes are stated at realizable value based on the year end London Metal Exchange price for gold and silver after making due adjustments of their physical recovery and the treatment and refining charges.

9.4 Liability for excise duty on finished goods in stock lying at works or warehouses is provided in the accounts and also considered in stock valuation.

9.5 The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost or net realizable value whichever is lower to the transferor unit. No adjustment is made in respect of difference between the cost and transfer price for such transferred products in case of partly processed materials lying at various stages of production and finished stocks at the end of the year, since this is not practically ascertainable.

9.6 Imported materials are valued at weighted average cost. In the event where final price is not determined valuation is made on provisional cost. Variations are accounted for in the year of finalization.

9.7 Once in every three years provision is made in the accounts for non-moving stores and spares (other than insurance spares) which have not moved for more than five years.

9.8 Scraps are accounted for on realization.

10. SALES:

Sales are net of discounts other than cash discounts.

11. OTHER INCOME:

11.1 Claims:

Claims on account of liquidated damages and insurance are accounted for as and when these are realised and/ or considered recoverable by the company.

11.2 Conversion charges:

Income from conversion of job work is accounted for on the basis of dispatches made .

11.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on accrual basis.

12. RETIREMENT BENEFITS :

12.1 Gratuity and Leave encashment:

Liabilities towards gratuity and leave encashment to employees as at the end of the year are provided for on the basis of actuarial valuation.

12.2 Deficit in Provident Fund:

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of accrued liability, as ascertainable on the basis of last accounts closed by the Provident Fund Trust.

13. BORROWING COST:

Interest/finance cost on loans specifically borrowed for new and expansion projects up to the start of commercial production is charged to the capital cost of the projects concerned. All other borrowing cost are charged to revenue.

14. ACCOUNTING FOR TAXES ON INCOME:

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is recognized on timing differences, being the difference between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets will be realized. Such balances of Deferred Tax Assets are reviewed as at each Balance Sheet Date to reassess the realisibility thereof.

15. GENERAL:

15.1. Foreign Currency Transactions :

Transactions in foreign currencies are recognized at rates on the date of the transactions are settled. Year-end balances of receivables/payables are translated at applicable forward contract/year-end rates and resultant translation differences relating to fixed assets are adjusted against fixed assets and the balance is recognized in the Profit and Loss Account.

15.2 Contingent Liability:

Contingent Lliabilities are disclosed in the Notes forming part of the accounts.

15.3 Events occurring after the Balance Sheet date :

Assets and Liabilities are adjusted for significant events occurring after the Balance Sheet date that provide additional evidences to assist the estimation of accounts relating to conditions existing at the Balance Sheet date.

15.4 Prior Period & Extra Ordinary Items:

(i) The nature and amount of prior period items (ii) extra-ordinary items are separately disclosed in the statement of Profit & Loss in a manner that their impact on the current Profit & Loss can be perceived.

15.5 Research and Development Expenditure :

Expenditure on research and development is charged off to Profit & Loss account in the year it is incurred. Expenditure on fixed assets in this regard is capitalized.

15.6 Mine Closure Expenditure :

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated and the involvement, not being material, are charged off on actual incurrance.

16. Voluntary Retirement Expenses :

16.1 Paid out of own fund :

Voluntary Retirement expenditure incurred by the company is charged to revenue in the year of incurrence in accordance with AS-15.

16.2 Paid out of Government Grant:

Voluntary Retirement Expenditure is adjusted against Government Grant received for this purpose.



 
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