| 1. | Significant Accounting Policies | |
| j. | Taxes on Income | |
| Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is provided / recognised on timing differences between taxable income and accounting income using the liability method subject to consideration of prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses under tax laws are not recognised unless there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Pursuant to the approval of the shareholders and Hon'ble Calcutta High Court's Order dated 5th February, 2002 deferred tax assets and liabilities as at 1st April, 2001 and for the years from 2001-2002 and onwards are adjusted against available balance in Securities Premium Account. | ||
| k. | Government Grants | |
| Grants of Capital nature and related to specific Fixed Assets are deducted from gross value of assets. Other grants of Capital nature are credited to Capital Reserve. Grant related to revenue are recognised in the Profit and Loss Account on a systematic basis to match them with related costs. | ||
| 2.A. | Company's 1.65 million tons cement expansion project in Vasavadatta Cement Unit commenced commercial production in March, 2007 and 17.5 MW captive power plant in the same unit which was under trial run till 31st March, 2007 commenced commercial generation in April, 2007. Expansion activities taken up in 2006-07 relating to fourth production line for a further 1.65 million tons capacity increase of cement together with 17.5 MW captive power plant in Company's Vasavadatta Cement Unit is expected to complete by end 2008. The Greenfield tyre project in Uttaranchal with a production capacity of 257 MT / day taken up in 2006-07 is being implemented, of which a part of the production capacity is expected to commence commercial production in May, 2008 and the balance in phases by end 2008. |
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| B. | In principle the Board has approved further expansion in Company's Tyre Unit at Uttaranchal for radial tyres (100 MT / day) and bias tyres (125 MT /day) involving an estimated aggregate capital outlay of Rs. 840 crores. The projects are expected to commence commercial production by end 2009 / early 2010. | |
| 3. | The Company intends to hive off its Hindusthan Heavy Chemicals unit (the Unit) as reflected in the Board Resolution of 31st January, 2006 and later on consented by the shareholders by postal ballot of 24th March, 2006. The Unit is not significant in terms of the Company's total assets / liabilities / revenue / expenses/ cashflows. Pending disposal of the Unit, the Unit is in operation and results thereof, have been reflected in these Accounts. | |
| 4. | Machinery breakdown (within the warranty period) in June, 2007 in the third production line (which started commercial production in March, 2007) of Company's Vasavadatta Cement Unit affected cement production in the region of 2,00,000 MT during the year till restoration / resumption of normal production level in August, 2007. | |
