Home  »  Company  »  Mangalam Cement  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Mangalam Cement Ltd. Company

Mar 31, 2015

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income and Expenditure

Expenses and income are accounted for on an accrual basis. Insurance and other claims raised by the Company are accounted for when received and are not material by reference to the total operations.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Material-in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments and for this purpose, the investee company's assets and estimated future cash flows are used to determine whether any diminution other than temporary has taken place. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during Construction Period is included under Capital Work-In Progress and allocated to the respective fixed assets on commencement of commercial production.

6. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method by depreciating carrying amount of fixed assets as on 1st April 2014 over remaining useful life of the assets as per schedule II of the Companies Act 2013. Continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on the land, belonging to Kota Super Thermal Power Station, Kota is amortised over the period of the agreement for extraction of fly ash between the company and Kota Super Thermal Power Station.

II. Intangible Assets

(a) Mining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 year

8. Employee Benefits

(i) Defined Contribution Plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employee's gratuity fund and leave encashment schemes are the Company's defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital assets is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonable certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs connected with borrowings for the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amounts of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised in the financial statements, as they are dependent on the outcome of legal or other processes.

14 Taxation

Provision for current tax is made in accordance with the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon'ble Rajasthan High Court's order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2014

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income And Expenditure

Expenses and income are accounted for on an accrual basis. Insurance and other claims raised by the Company are accounted for when received and are not material by reference to the total operations.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and |V|aterial-in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments and for this purpose, the investee company''s assets and estimated future cash flows are used to determine whether any diminution other than temporary has taken place. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost (including borrowing cost where applicable

and adjustment for exchange differences) incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during Construction Period is included under Capital Work-in Progress and allocated to the respective fixed assets on commencement of commercial production.

6. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the mannerspecified in Schedule XIV to the Companies Act, 1956. The useful lives of continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on the land, which ownership belongs to Kota Super Thermal Power Station, Kota is amortised over the period of agreement for extraction of fly ash between the Company and Kota Super Thermal Power Station.

II. Intangible Assets

(a) fining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 years.

8. Employee Benefits

(i) Defined Contribution Plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employees'' gratuity fund and leave encashment schemes are the Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit l^ethod.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital assets is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonable certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amounts of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised in the financial statements as they are dependent on the outcome of legal or other processes.

14 Taxation

Provision for current tax is made in accordance with the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon''ble Rajasthan High Court''s order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2013

1. Accounting Concepts

The financial statements have been prepared in compliance in all material respects with the accounting standards notified by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis and applying the principles of accounting for a going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of income and expenditure Expenses and income are accounted for on an accrual basis.

3. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on the weighted average method. Cost for the purpose of valuation of Finished Goods and Material- in-Process has been computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower, computed category wise.

5. Fixed Assets

(a) Fixed assets are stated at their original cost of acquisition/installation net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

(b) Capital work in progress is stated at cost (including borrowing cost where applicable and adjustment

for exchange differences) incurred during the construction/ installation/ preoperative period relating to items or projects in progress.

(c) Expenditure during construction period is included under capital work in progress and allocated to the respective fixed assets.

6. Impairment of assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of the cash flow expected to arise from the continuing use of the asset and its eventual disposal. A provision for impairment loss is made when the recoverable amount of the asset is lower than the carrying amount.

7. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. The useful lives of continuous process plants as defined therein have been assessed technically and depreciation is provided accordingly. Depreciation on the increase in the value of fixed assets due to revaluation is computed on the basis of remaining useful life as estimated by the valuer on the straight line method. Depreciation of Fixed Assets on land which ownership belongs to KSTPS, Kota is amortised over the period of agreement for extraction of fly ash between the Company and.

II. Intangible Assets

(a) Mining rights are amortised over the period of the leases.

(b) Computer software is amortised over a period of 5 years.

8. Employee Benefits

(i) Defined contribution plan : Employee benefits in the form of superannuation fund and the state governed provident fund are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employee''s gratuity fund and leave encashment schemes are the

Company''s defined benefit plans. The present value of the obligations under such defined benefit plans is determined based on actuarial valuations using the Projected Unit Credit Method.

9. Foreign Currency Transactions

All transactions in foreign currency are recorded at the rates of exchange prevailing on the date of transaction. Monetary assets and liabilities in foreign currency outstanding at the close of the year are converted to Indian currency at exchange rates prevailing at the year end. The resulting gain or loss (other than for capital assets) is recognised in the statement of Profit and Loss. The gain or loss relating to long term monetary items for financing acquisition of capital asset is adjusted to the acquisition cost of such assets and depreciated over their remaining useful lives.

Foreign exchange contracts used to hedge foreign currency transactions are initially recognised at exchange rates prevailing on the date of the contracts. Foreign currency contracts pertaining to acquisition of capital asset remaining unsettled at the end of the year are translated at the year end rate and differences between the rates of the contract and year end rates are added to or deducted from the cost of the assets and depreciated over the balances of the useful life of the assets and the premium arising at the inception of such forward contract is amortised over the life of the contract.

10. Government Grants

Government Grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government Grants of the nature of Project Subsidies are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at their book values. Revenue Grants are credited to Statement of Profit & Loss or deducted from the related expenses.

11. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to the Statement of Profit & Loss.

12. Research & Development Expenditure

Revenue Expenditure on Research and Development is charged as expenses under the head ''Research and Development” in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and depreciated according to the policy followed by the Company.

13. Provisions and Contingent Liabilities/Assets

Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to the accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from ''timing differences” between book and taxable profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised as income and carried forward only to the extent that there is virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and the Hon''ble Rajasthan High Court''s order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.


Mar 31, 2012

1. Accounting Concepts

The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition of Income and Expenditure Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories

Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials-in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets

Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortisation and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

6. Expenditure During Construction Period Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction /erection/ installation period.

7. Impairment of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

II. Intangible Assets

(a) Mining right is amortised over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefits

(i) Defined contribution plan : Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan: The employees' gratuity fund and leave encashment schemes are the company's defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government Grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government Grants of nature of Project Subsidy are credited to Capital Reserve. Grants related to specific fixed assets are deducted from the gross value of the concerned assets in arriving at its book value. Other Revenue Grants are credited to Profit & Loss Account or deducted from related expenses.

1 2. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13. Research & Development Expenditure

Revenue Expenditure on Research and Development is charged as expenses under the head "Research and Development" in the year in which it is incurred. Capital expenditure incurred on equipment and facilities that are acquired for research and development activities is capitalised and is depreciated according to the policy followed by the Company.

14. Provisions and Contingent Liabilities/Assets Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

15 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and Hon'ble Rajasthan High Court's order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 8.


Mar 31, 2011

1. Accounting Concepts The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition Of Income And Expenditure Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials-in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition. Scrap and Waste have been valued at net realisable value.

4. Investments Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost. Leasehold land is amortised over the lease period.

6. Expenditure During Construction Period

Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction /erection/installation period.

7. Impairment Of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

I. Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

II. Intangible Assets

(a) Mining right is amortized over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefit

(i) Defined contribution plan:

Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan :

The employees gratuity fund and leave encashment schemes are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government grants of the nature of Project Subsidy are credited to Capital Reserve. Other Revenue grants are credited to Profit & Loss Account or deducted from related expenses.

12. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13. Provisions And Contingent Liabilities/Assets Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will

be adjusted in future. Pursuant to the approval of the shareholders and Honble Rajasthan High Courts order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 5.


Mar 31, 2010

1. Accounting Concepts

The financial statements have been prepared in compliance with all material aspects with the notified accounting standard by the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. These accounts are prepared on the historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of going concern. The accounting policies are consistent with those used in the previous year.

2. Recognition Of Income And Expenditure

Expenses and income considered payable and receivable respectively are accounted for on accrual basis.

3. Inventories

Inventories are valued at lower of cost and net realisable value. Cost for the purpose of valuation of Raw Materials and Stores and Spare Parts has been computed on weighted average method. Cost for the purpose of valuation of Finished Goods and Materials- in-Process is computed on the basis of cost of material, labour and other costs incurred in bringing the inventories to their present location and condition.

4. Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary in the value of such investments. Current Investments are stated at cost or fair value, whichever is lower computed category wise.

5. Fixed Assets

Fixed assets are stated at their original cost of acquisition/installation adjusted by revaluation of certain fixed assets, net of accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost.

6. Expenditure During Construction Period

Expenditure during construction period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of the construction/erection/installation period.

7. Impairment Of Assets

The Management periodically assesses using external and internal sources whether there is any indication that an asset may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for impairment loss is made when recoverable amount of the asset is lower than the carrying amount.

8. Depreciation

(i) Tangible Assets

Depreciation is provided on the straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Continuous process plants as defined therein have been taken on technical assessment and depreciation is provided accordingly. Depreciation on increase in value of fixed assets due to revaluation of fixed assets is computed on the basis of remaining useful life as estimated by the valuer on straight line method. Depreciation of Fixed Assets on which ownership belongs to KSTPS, Kota is amortised over the period of agreement.

(ii) Intangible Assets

(a) Mining right is amortized over the period of lease.

(b) Computer software is amortised over a period of 5 years.

9. Employee Benefit

(i) Defined contribution plan:

Employee benefits in the form of superannuation fund, state governed provident fund scheme are defined contribution plan. The contribution under the scheme is recognised during the period in which the employee renders the related services.

(ii) Defined Benefit Plan:

The employees gratuity fund and leave encashment schemes are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.

10. Exchange Fluctuation

Foreign Currency transactions are recoded at the rate of exchange prevailing on the date of transactions. Foreign Currency Loans/Liabilities are restated at the rates prevailing at the year end. Exchange differences are adjusted in the Profit & Loss Account.

11. Government Grants

Government grants are accounted for where there is reasonably certainty that the ultimate collection will be made. Government grants of the nature of Project Subsidy are credited to Capital Reserve. Other Revenue grants are credited to Profit & Loss Account or deducted from related expenses.

12 Bonnwmg Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

13 Provisions And Contingent liabilities Assets

Provision in respect of present obligations arising out of past events are made in the accounts when reliable estimate can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognised or disclosed in the financial statements.

14 Taxation

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax assets is recognised as income and carried forward only to the extent there is a virtual certainty that the assets will be adjusted in future. Pursuant to the approval of the shareholders and Honble Rajasthan High Courts order dated 30th November, 2007 deferred tax liabilities from the year 2007-08 and onwards are met from Securities Premium Account as disclosed in note no. 4.