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Accounting Policies of Hindustan Copper Ltd. Company

Mar 31, 2017

As on 01.04.2015

A. Adjustments include re-classification of carrying value of Leasehold Land to Prepaid Expenses for more than 1 year of Rs,2179.32 lac under Other non-current Assets and Prepaid Expenses for less than 1 year of Rs,138.75 lac under Other Current Assets

B. NIL.

C. Adjustments include re-classification of Capital Advances of Rs,2417.95 lac to Other non-current Assets, Employee Advance of Rs,3.65 lac and Deposits of Rs,3467.67 lac to Current Financial Assets - Others and Bank Deposit with more than 12 months maturity of Rs,9771.13 lac from Cash and cash equivalents.

D. Adjustments include net effect of Deferred Tax Assets of Rs,840.26 lac to Retained Earnings under Other Equity.

E. Adjustments include re-classification of Carrying value of Leasehold Land amounting to Rs,2179.32 lac from Property, Plant & Equipment, Capital Advances of Rs,2417.95 lac from Financial Assets - Others under Non-current Assets and Rs,47441.27 lac for Mine Development Expenditure to Retained Earnings under Other Equity.

F. NIL

G. Adjustments include re-classification of Bank Deposit with more than 12 months maturity of Rs,9771.13 lac to Financial Assets - Others under Non-current Assets, Bank Deposit with more than 3 months and up to 12 months maturity of Rs,11573.00 lac and Unpaid Dividend of Rs,12.79 lac to Other Bank Balances and Imprest Cash of Rs,0.13 lac to Financial Assets - Others under Current Assets.

H. Adjustments include re-classification of Bank Deposit with more than 3 months and up to 12 months maturity of Rs,11573.00 lac and Unpaid Dividend of Rs,12.79 lac from Cash and cash equivalents.

I. Adjustments include re-classification of Employee Advance of Rs,3.65 lac and Deposit of Rs,3467.67 lac from Financial Assets - Others under Non-current Assets & Interest accrued on LC from customers, Deposits and House Building Loan of Rs,1386.42 lac, Claims recoverable of Rs,1614.14 lac from Other Current Assets and Imprest Cash of Rs,0.13 lac from Cash and Cash Equivalents and Advance to Supplier/Contractor of Rs,13083.06 lac to Other Current Assets.

J. Adjustments include reclassification of Advance Tax of Rs,71463.85 lac from Current Liabilities - Provisions.

K. Adjustments include re-classification of Carrying value of Leasehold Land amounting to Rs,138.75 lac from Property, Plant & Equipment, Advance to Supplier/Contractor of Rs,13083.06 lac from Financial Assets - Others under Current Assets, Interest accrued on LC from customers, Deposits and House Building Loan of Rs,1386.42 lac and Claims recoverable of Rs,1614.14 lac to Financial Assets - Others under Current Assets.

L. Adjustments include net effect of Deferred Tax Assets of Rs,840.26 lac from Deferred Tax Asset (NET) and Mine Development Expenditure of Rs,47441.27 lac from Other Non-current Assets and Proposed Dividend of Rs,1387.83 lac and Tax on Proposed Dividend of Rs,282.53 lac for FY 2014-15 declared and approved in FY 2015-16 from Provisions under Current Liabilities.

M. Adjustments include re-classification of Deposits & Retention Money of Rs,1998.83 lac to Other Financial Liabilities under Current Liabilities.

N. Adjustments include re-classification of Deposits & Retention Money of Rs,1998.83 lac from Other Financial Liabilities under Non-Current Liabilities, Deposits & Retention Money of Rs,524.03 lac, Unpaid Dividend of Rs,12.79 lac and employee liabilities of Rs,452.78 lac from Other Current Liabilities.

O. Adjustments include re-classification of Deposits & Retention Money of Rs,524.03 lac, Unpaid Dividend of Rs,12.79 lac and employee liabilities of Rs,452.78 lac to Other Financial Liabilities under Current Liabilities.

P. Adjustments include re-classification of Proposed Dividend of Rs,1387.83 lac and Tax on Proposed Dividend of Rs,282.53 lac for FY 2014-15 declared and approved in FY 2015-16 to Other Equity, Advance Tax of Rs,71463.85 lac to Current Tax Assets (Net) and Provision for Current Tax of Rs,66301.42 lac to Current Tax Liabilities (Net).

Q. Adjustments include re-classification of Provision for Current Tax of Rs,66301.42 lac from Provisions under Current Liabilities.

As on 31.03.2016

A. Adjustments include carrying value of Leasehold Land reclassified as Prepaid Expenses for more than 1 year of Rs,2054.13 lac under Other non-current Assets and Prepaid Expenses for less than 1 year of Rs,131.97 lac under Other Current Assets.

B. Adjustments include re-classification of excess inventory of Rs,987.81 lac from Other Equity.

C. Adjustments include re-classification of Capital Advances of Rs,2502.81 lac to Other non-current Assets, Employee Advance of Rs,10.46 lac and Deposits of Rs,3396.69 lac to Current Assets - Financial Assets - Others and Bank Deposit with more than 12 months maturity of Rs,6832.34 lac from Cash and Cash Equivalents.

D. Adjustments include net effect of Deferred Tax Assets of Rs,1023.15 lac to Retained Earnings under Other Equity. Also there is an effect of Tax on Fair Value of Investments amounting to Rs,5.18 lac.

E. Adjustments include re-classification of Carrying value of Leasehold Land amounting to Rs,2054.13 lac from Property, Plant & Equipment, Capital Advances of Rs,2502.81 lac from Financial Assets - Others under Non-current Assets.

F. Adjustments include impact of Fair Value of Investment of Rs,14.98 lac.

G. Adjustments include re-classification of Bank Deposit with more than 12 months maturity of Rs,6832.34 lac to Financial Assets - Others under Non-current Assets, Bank Deposit with more than 3 months and up to 12 months maturity of Rs,13033.13 lac and Unpaid Dividend of Rs,13.44 lac to Other Bank Balances and Imprest Cash of Rs,0.88 lac to Financial Assets - Others under Current Assets.

H. Adjustments include re-classification of Bank Deposit with more than 3 months and up to 12 months maturity of Rs,13033.13 lac and Unpaid Dividend of Rs,13.44 lac from Cash and Cash Equivalents.

I. Adjustments include re-classification of Employee Advance of Rs,10.46 lac and Deposit of Rs,3396.69 lac from Financial Assets - Others under Non-current Assets & Interest accrued on LC from customers, Deposits and House Building Loan of Rs,1639.24 lac, Claims recoverable of Rs,2155.05 lac from Other Current Assets and Imprest Cash of Rs,0.88 lac from Cash and Cash Equivalents and Advance to Supplier/Contractor of Rs,3182.17 lac to Other Current Assets.

J. Adjustments include Advance Tax of Rs,73151.57 lac from Current Liabilities - Provisions.

K. Adjustments include re-classification of Carrying value of Leasehold Land amounting to Rs,131.97 lac from Property, Plant & Equipment, Advance to Supplier/Contractor of Rs,3182.17 lac from Financial Assets - Others under Current Assets, Interest accrued on LC from customers, Deposits and House Building Loan of Rs,1639.24 lac and Claims recoverable of Rs,2155.05 lac to Financial Assets - Others under Current Assets.

L. Adjustments include net effect of Deferred Tax Assets of Rs,1023.15 lac to Retained Earnings and Proposed Dividend of Rs,1387.83 lac and Tax on Proposed Dividend of Rs,282.53 lac for FY 2014-15 declared and approved in FY 2015-16 is adjusted to Provisions under Current Liabilities. Also adjustments include re-classification of excess inventory of Rs,987.81 lac to Capital Work in Progress and impact of Fair Value of Investment of Rs,14.98 lac and an effect of Tax on the same amounting to Rs,5.18 lac.

M. Adjustments include re-classification of Deposits & Retention Money of Rs,2273.50 lac to Other Financial Liabilities under Current Liabilities.

N. Adjustments include re-classification of Deposits & Retention Money of Rs,2273.50 lac from Other Financial Liabilities under Non-Current Liabilities, Deposits & Retention Money of Rs,559.73 lac, Unpaid Dividend of Rs,13.44 lac, Other liabilities of Rs,1667.10 lac and Interest accrued but not due on borrowings - Rs,218.25 lac from Other Current Liabilities.

O. Adjustments include re-classification of Deposits & Retention Money of Rs,559.73 lac, Unpaid Dividend of Rs,13.44 lac, Other liabilities of Rs,1667.10 lac and Interest accrued but not due on borrowings - Rs,218.25 lac to Other Financial Liabilities under Current Liabilities.

P. Adjustments include re-classification of Proposed Dividend of Rs,1387.83 lac and Tax on Proposed Dividend of Rs,282.53 lac for FY 2014-15 declared and approved in FY 2015-16 from Other Equity, Advance Tax of Rs,73151.57 lac to Current Tax Assets (Net) and Provision for Current Tax of Rs,68465.42 lac to Current Tax Liabilities (Net).

Q. Adjustments include re-classification of Provision for Current Tax of Rs,68465.42 lac from Provisions" under Current Liabilities.

Explanations for reconcilation of Statement of Profit and Loss as previously reported under IGAAP to Ind AS

A) Excise Duty of Rs,10311.76 lac has been reclassified to Other Expenses from Revenue from Operations

B) Fair value on investment of ''14.98 lac has been considered in Other Income

C) Acturial Gain /Loss on Gratuity of Employees of ''591.88 lac reclassified to OCI from Employees benefit expenses & Parttime Director Sitting Fees of Rs,6.16 lac reclassified to Employees benefit expenses from Other expenses

D) Bank charges of Rs,131.21 lac reclassified to Other Expenses from Finance Costs

E) Depreciation on Leasehold land of Rs,131.97 lac reclassified partly to Other expenses Rs,97.27 lac and remaining to Discounting Operations Rs,34.70 lac from Depreciation & Amortization

F) Other Expenses reclassified from Excise Duty Rs,10311.76 lac, Bank charges Rs,131.21 lac, Depreciation & Amortization Rs,97.27 Lakh and Part time Director Sitting Fees of Rs,6.16 lac respectively

G) Current Tax of Rs,12.01 lac on Discontinuing operations reclassified to Tax expenses on Discontinuing operations

H) Deferred Tax Liablity on Fair value on investment of Rs,5.18 lac has been considered in Deferred Tax

I) Depreciation on Lease hold land of Discounting Operations - Rs,34.70 lac transferred from Depreciation & Amortization J) Current Tax of Rs,12.01 lac on Discontinuing operations reclassified to Tax expenses on Discontinuing operations from Current Tax expenses

K) Acturial Gain /(Loss) on Gratuity of Employees of Rs,591.88 lac reclassified to OCI from Employees benefit expenses

1.Corporate Information

Established in 1967 and domiciled in India, Hindustan Copper Limited is a Central public sector undertaking under the administrative control of Ministry of Mines, Government of India. The registered office of the company is situated at Kolkata. The principal activities of the company are exploration, exploitation, mining of copper and copper ore including beneficiation of minerals, smelting and refining. The Company is listed with BSE Ltd. and National Stock Exchange of India Ltd.

2.Significant accounting policies

2.1 Basis of Accounting

The financial statements are prepared under historical cost convention from the books of accounts maintained under accrual basis except for certain financial instruments which are measured at fair value and in accordance with the Indian Accounting Standards prescribed under Companies Act, 2013.

2.2 Application of Indian Accounting Standards (Ind-AS)

All companies (listed or unlisted) having net worth of Rs,50,000 Lakhs or more are required to adopt Ind AS. The requirement to present comparatives implies that phase 1 companies will require an Ind AS compliant opening Balance Sheet as of 1 April 2015.

In the current year, Indian Accounting Standards (Ind AS) have been notified by MCA under the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS Rules"), of the Companies Act, 2013 and are mandatorily effective for the accounting period that begins on or after 1 April 2016.

The Company has adopted all the Ind AS as applicable and its adoption was carried out in accordance with Ind AS 101 - First Time Adoption of Indian Accounting Standards. The transition was carried out from the previous accounting principles generally accepted in India (IGAAP) to the current Ind AS and its effect with reconciliation and description have been summarised in Note No. I,II & III.

2.3 Use of Estimates

The preparation of the CompanyRs,s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

2.4 Revenue Recognition Sale of Products

Revenue is measured at the fair value of the consideration received or receivable and fair value has been defined. Operating revenue recognized is net of all promotional expenses and discounts, rebates and/or any other incentive to customers. 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. This is as per consistent practice followed by the company.

Sale of Services

Income from conversion of job work is accounted for on the basis of actual quantity dispatched.When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognized by reference to the stage of completion (Percentage of Completion Method) of the transaction at the end of the reporting period

Other Income

a.Interest from Customers

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

b.Claims

Claims are recognized in the Statement of Profit & Loss (Net of any payable) on actual basis including receivables from Government towards subsidy, cash incentives, reimbursement of losses, insurance claims etc, where it is reasonably certain that these assets will be realised.

c.Dividend and Interest from Investments

Dividend income and interest income from investments is recognized in the Statement of Profit and Loss when the right to receive the same has been established and it is certain that the economic benefits will flow to the company and the amount of income can be measured reliably.

d.Profit on Sale of Investment

Profit on sale of investment is recognized upon transfer of title by the company and is determined as the difference between the sales price and the then carrying value of the investment.

e.Penalty and Liquidated Damages

Penalty and liquidated damages are accounted for as and when these are realised and/or considered recoverable by the company.

f.Others

Any other income is recognized on accrual basis.

2.5 Employees Benefit

Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Statement of Profit or Loss. Past service cost is recognized in Statement of Profit or Loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

i. Service cost (including current service cost, past service cost, etc.);

ii.Net interest expense or income; and

iii.Re-measurement.

The company presents the first two components of defined benefit costs in profit or loss in the line item ''employee benefits expense''.

The retirement benefit obligation recognized in the statement of financial position represents the actual deficit or surplus in the company defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the company can no longer withdraw the offer of the termination benefit and when the company recognizes any related restructuring costs.

Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the company in respect of services provided by employees up to the reporting date.

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.

2.6 Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest expenses calculated using the effective interest method and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs

2.7 Depreciation and Amortization

The company has used the exemption available in Ind AS 101 with respect to recognisation of Plant, Property and Equipment (PPE) and Intangible Assets at their carrying value being deemed cost.

The depreciable amount of an item of PPE is allocated on a straight line basis over its useful life prescribed in Part C of Schedule II of the Companies Act,2013 or actual useful life of assets assessed by the Technical Committee of the company, whichever is lower. The residual value and the useful life of an asset are reviewed, at each financial year-end. Each part of an item of PPE with a cost that is significant in relation to the total cost of the item is depreciated separately. Depreciation on all such items have been provided from the date they are ''Put to Use'' till the date of sale and includes amortization of intangible assets and lease hold assets. Freehold land is not depreciated. The residual value of all such items is taken at 5% of the original cost of individual asset.

An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Certain consumable items of small value whose useful life is very limited are directly charged to revenue in the year of purchase..

From the date Ind AS came into effect, the carrying amount of an asset is depreciated over the remaining useful life of the asset as per estimate of remaining useful life. Wherever, the remaining useful life of an asset is nil, the carrying amount is recognized in the opening balance of retained earnings after retaining the residual value.

2.8 Taxation

Income tax expense represents the sum of current tax and deferred tax.

Current tax

The current tax payable is based on taxable profit for the year as determined from net profit before tax as represented in Statement of Profit and Loss and Other Comprehensive Income, in line with different provisions under Income Tax Act 1961.Current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Current and Deferred Tax for the year

Current and deferred tax are recognized in Statement of Profit or Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

2.9(a) Property Plant and Equipments

The cost of an item of PPE is recognized as an asset if and only if, it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The cost of an item of PPE is the cash price equivalent at the recognition date. The cost of an item of PPE comprises:

i. Purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.

ii. Costs directly attributable to bringing the PPE to the location and condition necessary for it to be capable of operating in the manner intended by management.

iii. The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the company incurs either when the PPE is acquired or as a consequence of having used the PPE during a particular period for purposes other than to produce inventories during that period.

The company has chosen the cost model of recognition and this model is applied to an entire class of PPE. After recognition as an asset, an item of PPE is carried at its cost less any accumulated depreciation and any accumulated impairment losses.

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.

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 incidentals to construction are capitalized allocating to various items of PPE 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.

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.

2.9(b) Intangible Assets

Identifiable intangible assets are recognized when the company controls the asset; it is probable that future economic benefits associated with respective assets will be realized for more than one economic period. At initial recognition, intangible assets are recognized at cost. Intangible assets are amortized on straight line basis over estimated useful life from the date on which they are available on use. Intangible Assets other than Software are amortized over estimated useful life which is equivalent to license period, generally not more than 5 years. However, Software which are considered as Intangible Assets are fully amortized in the year in which the expenses are incurred.

2.10 Mine Development Expenditure

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 depleted on the basis of ore raised during the year and the mineable ore reserves estimated from time to time.

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.

In respect of open cast mines : The expenditure on removal of waste and overburden, is capitalized and the same is depleted 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.

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.

If a working mine is closed due to economic reasons, the un-depleted value of 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 depleting it year wise based on the estimated remaining life of that mine.

2.11 Overhauling Expenses

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

2.12 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.

2.13 Non Current Assets Held for Sale

The company classifies a non-current asset (or disposal group of assets) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. A non-current asset (or disposal group) is classified as being held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Immediately before the initial classification of the asset (or disposal group) as held for sale, the carrying amounts of the asset (or all the assets and liabilities in the group) are be measured in accordance with applicable Indian Accounting Standards.

2.14 Inventories

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.

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.

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.

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.

The inventories out of inter-unit transfers at the close of the year are valued on the basis of cost to the transferor unit.

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.

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 Property Plant and Equipments.

Scrap sales are accounted for on delivery of material.

2.15 Grants-in-Aid

All government grants are recognized as deferred income and it will be taken to Statement of Profit and Loss over the period of time in accordance with the pattern in which the obligations are met.

2.16 Impairment of Assets

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in Statement of Profit and Loss, unless the relevant asset is carried at a revalue amount, in which case the impairment loss is treated as a revaluation decrease.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in statement of Profit or Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

2.17 Foreign Exchange Transactions

Transactions in currencies other than the company''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Foreign currency monetary items (except overdue recoverable where reliability is uncertain) are converted using the closing rate as defined in the Ind AS-21- The effects of changes in Foreign Exchange Rates. Non-monetary items are reported using the exchange rate at the date of the transaction. The exchange difference gain/loss is recognized in the Statement of Profit and Loss.

Liability in foreign currency loans relating to acquisition of fixed assets is converted using the closing rate as defined in Ind AS 21-The effects of changes in Foreign Exchange Rates and the difference in exchange is recognized in terms of exemptions given in paragraph D13AA of Appendix D to Ind AS-101, where the effect of exchange differences on foreign currency loans of the company is accounted for by addition or deduction to the cost of the assets so far it relates to the depreciable capital assets and shall be depreciated over the balance life of the assets.

2.18 Provisions

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event and it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

2.19 Contingent Liabilities/ Assets Contingent Liabilities

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.

Contingent Assets

Contingent Assets are not recognized in the financial statements but are disclosed in Notes to the Accounts. Such assets occur when the inflow of economic benefits is probable. Such contingent assets are assessed continuously, if it''s virtually certain that inflow of economic benefits will arise then such assets and the relative income will be recognized in the financial statements.

2.20 Leasing

Assets held under lease, in which a significant portion of the risks and rewards of ownership are transferred to lessee are classified as finance leases. All other leases are classified as operating leases.

Depreciation expenses are recorded if asset held under finance lease is depreciable.

Finance expenses are recognized immediately in the statement of profit and loss if they are not directly attributable to qualifying assets, otherwise they are capitalized in accordance with the company''s general policy on borrowing costs.

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

2.21 Financial Instruments

Non Derivative Financial Instruments

(i) Initial Recognition

Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

(ii) Subsequent Recognition

a. Financial assets

Financial assets are subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss.

b. Financial Liabilities

Financial liabilities are subsequently measured at amortized cost using Effective Interest Rate (EIR) method except for derivatives, which are measured at fair value.

Derivative Financial Instruments

All derivatives are recognized and measured at fair value with changes in fair value being recognized in profit or loss for the period.

2.22 Events Occurring after the Reporting Period

The company adjusts the amount recognized in its financial statements to reflect adjusting material events after the reporting period and does not adjust the amount to reflect non-adjusting events after the reporting period. However where retrospective restatement is not practicable for a particular prior period then the circumstances that lead to the existence of that condition and the description of how and from where the error is corrected are disclosed in Notes on Accounts.

2.23 Prior Period Items

Errors of material amount relating to prior period(s) are disclosed by a note with nature of prior period errors, amount of correction of each such prior period presented retrospectively, to the extent practicable along with change in basic and diluted earnings per share. However where retrospective restatement is not practicable for a particular period then the circumstances that lead to the existence of that condition and the description of how and from where the error is corrected are disclosed in Notes on Accounts.

2.24 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 PPE in this regard, if any, is capitalized.

2.25 Dividends

Final dividend on shares are recorded as a liability on the date of approval by the shareholders in general meeting and interim dividends are recorded as a liability on the date of declaration by the directors in the meeting of the Board of Directors.


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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