Mar 31, 2010
A. Method of Accounting
The financial statements are prepared under the historical convention,
on the accrua. oasis of accounting and in accordance with the Generaliy
Accepted Accounting Policies in no a and comply with the accounting
standards prescribed by the Companies [Accounting Standards) Rules,
2006, to the extent applicable and in accordance with the provisions ot
the Companies Act, 1956, as adopted consistently by the Company,
b. Use of Estimates:
In preparing Company''s financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and the reported
amounts of revenues ana expenses during the reporting period Actual
results could differ from *hoso estimates An-, revision to accounting
estimates is recognized prospectively in current and future periods
c. Revenue Recognition
(ij Sales are recognized on dispatch of material to customers. Sales
are net ot traao other discounts and rebates, duties and taxes. (ii)
Sale of copper cathode is initially accounted at provisional invoice
rate, pena.nq finalization of the price (quotational period price] on
the future rote var''-aticns ere accounted for on final settlement of
the price (lii) Sales are after considering gain or loss on hedging of
Material (iv) Purchases are recognized on actual receipt of material
from supplier Purchases ore
net of discount, rebate, duties and taxes.
(v) Purchase of raw material is initially accounted at provisional
invoice rate, penamg finalization of quotational period price.
Variations are accountea for on vxii settlement of the price |vi| For
the provisional purchases and sales as at the balance sheet date, net
loss is calculated based on the difference between provisional price
and price/future contract price of the material on the balance shcc!
date Such k.ss is accounted in the profit and loss account; however if
the diffeienticr is net gem * it ignored.
d. Export obligation:
Obligation/entitlements on account of Advance Licence Scheme for inpo''f
o* raw rrav'',,, are accounted considering quantity consumed and net
custom duty payable f the expoi; obligation is not met.
e. Hedging
The Company has approved policy of hedging of material used in the
production Accordingly derivatives Contracts are entered into to hedge
highly probable sales transactions or firm commitments. The said policy
is approved by the Board of Directors ond the hedging relationship is
documented.
As per the accounting policies adopted by the company, the gam or :oss
on se''tleme-r ti- the hedge contract is adjusted in sales/purchase as
the case may be. in the period in *v:,cf transaction of sales/purchase
is accounted. On each balance sheet date the outstanjng contract are
marked to market and the difference is transferred to hedging reserve
acco,. n°. as per accounting provisions in Accounting Standard-30 for
highly probable transactiors/firm commitments.
f. Fixed Assets
i Fixed assets are stated at cost of acquisition less accumulated
depreciate-'''' amortization and provision for impairment, if any ii.
The cost of acquisition includes purchase price and all other directly
attr.txil.ir/ incidental expenses, net of cenvat credit iii. Cost of
fixed assets is inclusive of interest expense incurred during
construction pence
iv Capital work-in-progress comprises the cost of fixed assets that ate
not ready intended use at the balance sheet date.
g. Depreciation and Amortization
i. Depreciation is provided on straight line method at the rales
Schedule XIV of the Companies Act, 1956, unless the use of nigher rate
or a accelerated charge is justified through technical estimates
ii. Depreciation on additions / deductions to fixed assets is being
provided on pro-rat.,
basis from / to the date of acquisition / disposal. Depreciation on
exchange difference capitalised is provided prospectively over the
remaining life of the assets
iii. Leasehold land is amortized aver the period of the respective
lease
h. Impairment of assets:
The carrying values of assets of the Company''s cash-generating units
are reviewed h/ impairment annually or more often if there is an
indication of decline in value. It an, indication of such impairment
exists, the recoverable amounts of those assets are estimate. and
impairment loss is recognized, if carrying amount of those assets
exceeds ''ne recoverable amount. The recoverable amount is the greater
of the net selling price ana *r:e value in use. Value in use is arrived
at by discounting the estimated future cash flows to the present value
based on appropriate discount factor. However, the assessment of "rr.po
<"*.-'' of assets is not carried out.
i. Borrowing Cost
Borrowing cost incurred in relation to the acquisition and construction
of assets is capitate as the part of the cost of such assets up to
the date when such assets are ready for tended use. Other borrowing
costs are charged as on expense in the year in winch these
incurred.
j. Investments
Long term investments are volued at cost less provision for permanent
diminution in such investments, if any.
k. inventories
i Inventories of Stores and spares are valued at cost after providing
for cosi ; : obsolescence and other anticipated losses, wherever
considered necessary generally determined on weighted average cost
basis and wherever appropriate overheads are taken into
account.
ii Inventories of Raw Material are stated at cost.
iii. Inventories of Work In Progress and Finished Goods are valued ''At
cost or Net Value, whichever is lower''. Net realizable value
is estimated at the expected selling less estimated completion and
selling costs.
I. Foreign Currency Transactions
Transactions in foreign currency are accounted at the exchange rate
prevailing op en'' of the transactions. Assets / Liabilities in
foreign currency are restated at fee exchange a'' at the
vear-end. The gain or losses on exchange difference on account
settlement or restatement are recognized in profit and loss account
m. Lease Accounting
Lease of an asset whereby the lessor essentially remains the owner of
the asset is classif.eei as operating lease. The lease payment accrued
during the year is charged to Profit & toss a/c
n. Employee Benefits:
i. Post-employment benefit plans:
The Company has both defined-contribution and defined-benefit plans The
plans are
financed by the Company and in the case of some defined contribution
pans bv tne
Company along with its employees,
Defined-contribution Plan"
These are plans in which the Company pays pre-defined amounts to
separate tunas and does not have any legal or informal obligation to
pay additional sums comprise of contributions to the employees''
provident fund, family pension tuna ana superannuation fund. The
Company''s payments to the defined-contribution plans are reported as
expense during the period in which the employees perform *»''e services
that the payment covers,
Defined-benefit Plan:
Provision for Gratuity liability is made on the basis of actuarial
valuation corresponding contribution to the recognized LIC
Group Policies
ii. Short-term Employee Benefits:
Short term employee benefits are recognized as an expense at the
amount expected to be paid over the period of service
rendered by the employee1: to the Company.
iii. Long-term Employee Benefits:
Long term employee benefits comprise of compensated absences these are
measured based on an actuarial valuation carried out by an independent
actuary using the projected unit method at each Balance Sheet date
unless the, are Actuarial gains and losses and past
service costs are recognized immediately in the F-ot l & Loss account.
o. Taxation
Tax expenses comprise current tax, deferred tax and fringe benefit tax
Provision for deferred tax is made for timing differences arising
between toxaaie income accountings income computed using tax rate and
the laws that have been enacts.:, substantially enacted on balance
sheet date
Deferred tax assets are recognized only if there is virtual certainty
that they will be realized
p. Segment Reporting:
The Company reviewed the disclosure of segment-wise reporting and is of
the view that r
q. Provisions and Contingencies:
A provision is recognized when the Company has a present obligation as
a result of pas'' event and it is probable that an outflow of resources
will be required to settle then in respect of which reliable
estimate can be made. Provisions (excluding retirement bene''m are not
discounted to its present value and are determined based on best
es''imate rehire,. to settle the obligation at the balance sheet date
These are reviewed at each an. f sheet date and adjusted to reflect
the current best estimates,
Contingent liabilities are not recognized but are disclosed in the
notes to the fman, .a statement. A Contingent asset is neither
recognized nor disclosed.
r. Cash Flow Statements:
Cash-flow statements are prepared in accordance with "Indirect Method"
the Accounting Standord (AS) 3 - Cash Flow Statements as
prescribed under Section of the Companies Act, 1956,
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