1. Significant Accounting Policies
a. Basis of Preparation of Financial Statements
  These Financial Statements have been prepared under the historical cost convention [other than for revaluation of certain fixed assets as detailed in '1 (b)(ii)' and '1 (b)(iv)' below] and in compliance with all the applicable accounting principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 (the 'Act') and the relevant provisions of the Act. A summary of significant accounting policies which have been applied is set out below.
b. Fixed Assets and Depreciation
  i. Fixed Assets are stated at cost of construction/ acquisition [except for items mentioned in (b)(ii) below] inclusive of inward freight, non refundable duties / taxes, incidental expenses directly related to acquisition, borrowing cost where applicable and adjustments for exchange difference referred to in Note 1(f) below. In respect of projects involving construction, related pre-operational expenses form part of the value of assets capitalised. An impairment loss is recognised wherever the carrying amount of fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use).
ii. Land, buildings and certain plant and machineries of Rayon and Transparent Paper Unit as at 31st March, 1982 and of Cement (at Basantnagar) and Spun Pipes & Foundries Units as at 31st March, 1983 are stated at valuation made by the professional valuers in 1982-1983 at the then current value.
iii. Capital work in progress is stated at cost [including borrowing cost, where applicable and adjustment for exchange difference referred to in Note 1 (f) below], incurred during construction / installation / pre-operative period relating to items or projects in progress.
iv. Depreciation on revalued items of fixed assets referred to in (b)(ii) above is calculated on their respective revalued amounts at rates considered applicable by the valuers on straight line method as against the methods / rates / bases which would have otherwise been adopted for the purpose of the annual accounts of the Company and accordingly includes additional depreciation charge. An amount equivalent to the aforesaid additional depreciation charge is transferred to the credit of the Profit and Loss Account from Capital Reserve - Revaluation of Fixed Assets.
v. Depreciation on fixed assets acquired up to 31st March, 1983 and not covered by revaluations referred to in (b)(ii) above pertaining to Transparent Paper Division of Rayon & Transparent Paper Unit and fixed assets of Bharat General Unit (except those pertaining to Malkapur Extraction Division) is calculated under reducing balance method at applicable rates as per Schedule XIV to the Companies Act, 1956 as revised during 1993-1994.
vi. Leasehold land is amortised over the lease period.
vii. Certain indirect project expenditure included under fixed assets amortised over a period of five years.
viii. Depreciation on fixed assets acquired up to 31st March, 1993 other than items covered in (b)(iv) to (b)(vii) above is calculated under straight line method at the rates considered adequate to amortise the depreciable book value over the remaining part (as at 1st April, 1993) of the specified period recomputed by applying the Schedule XIV rates as revised during 1993-94 in keeping with the Circular No. 14/93 dated 20th December, 1993 of the Department of Company Affairs, Government of India.
ix. Depreciation on additions to fixed assets from 1st April, 1993 [except for deferral of annual depreciation charge for three years from 1999-2000 to 2001-2002 on certain fixed assets of Cement Units as indicated in (b)(x) below], fixed assets of Hindusthan Heavy Chemical Unit, Assam Cotton Mills Unit and those pertaining  to Malkapur Extraction Divisions of Bharat General Unit [referred to in (b)(v) above], is calculated under straight line method at applicable rates as per Schedule XIV to the Companies Act, 1956 as amended during 1993-94.
x. Pursuant to Central Government's approval under Section 205(2)(c) of the Act, depreciation not provided in 1999-2000, 2000-2001 and 2001-2002 accounts on certain fixed asset items of Cement Units are amortised over the remaining part of specified period (as at 1st April, 2000, 1st April, 2001 and 1st April, 2002 respectively) based on the prescribed rates.
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