Accounting Policies of AML Steel Ltd. Company

Mar 31, 2014

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

The financial statements have been prepared under the historical cost conversion, on accrual basis and in accordance with the generally accepted accounting principles in India (Indian GAAP). The said financial statements comply with the relevant provision of the Companies Act, 1956 and the Accounting Standards notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006 as applicable. The Ministry of Corporate Affairs revised Schedule VI to the Act for the Financial Years commencing on or after 1st April, 2011. The Balance Sheet, profit and loss account and the comparative financial information for the previous year have accordingly being prepared and presented with disclosures as required under the Revised Schedule VI.

b) USE OF ESTIMATES:-

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities including the disclosure of contingent liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

c) FIXED ASSETS AND DEPRECIATION:-

All fixed Assets are stated at cost inclusive of all installation expenses incurred relating to acquisition. Depreciation is provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation is charged on pro rata basis on additions to Assets taken into account the date of additions.

d) BORROWING COST:-

Borrowing costs are capitalized as a part of the cost of qualifying asset when it is possible that they will result in future economic benefit. Other borrowing costs expensed as incurred.

e) INVESTMENTS:-

Investments are classified into current and long term investments in line with the revised schedule VI requirements. Long term investments are valued at cost.

f) INVENTORIES:-

Raw Materials and stores and spares are valued at cost. Finished stocks are valued at cost (including applicable overheads and excise duty) or net realizable value whichever is lower.

g) FOREIGN CURRENCY TRANSACTIONS:-

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains / losses arising out of fluctuation in the exchange rates are recognized in Profit and Loss Account in the period in which they arise.

h) EMPLOYEE BENEFITS:-

All the benefits is accounted on accrual basis and charged to profit and loss account of the year. No provision has been made for the retirement benefits in respect of gratuity and leave encashment.

i) TAXES ON INCOME:-

Tax expenses comprises of Current tax and deferred tax. Current Income tax is provided on the taxable income for the period as per provision of the Income tax Act, 1961. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being the difference between the taxable income and accounting income that originates in one period and is capable of reversal in one or more subsequent periods.

j) CONTINGENT LIABILITY:-

A provision is recognize when the company has a present obligation as a result of past events, the settlement of which is expected to result in outflow of resources and which can be measured only by using a substantial degree

of estimation. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

k) CASH FLOW STATEMENT:-

The Cash flow statement is prepared using the indirect method set out in Accounting Standard 3 Cash Flow Statements and presents the Cash flows by operating, investing and financing activities of the Company.

l) EARNINGS PER SHARE:-

The earnings considered in ascertaining earnings per share comprises of the net profit after tax before exceptional items. The number of shares used in computing earnings per share is the weighted average number of shares outstanding during the year. Diluted earnings per share comprises of weighted average shares considered for deriving basic earnings per share as well as dilutively potential equity shares.

m) OPERATING LEASES:-

This is not applicable to the Company.

n) BALANCE''S ARE SUBJECT TO CONFIRMATION

The authorised capital of the company is Rs.30,00,00,000/-.The issued subscribed and the paid up capital of the company is Rs.75,000,000/-.The shares are listed in the Madras Stock Exchange, Delhi Stock Exchange and Ahmedebad Stock Exchange.The Company has not allotted any shares during the year.

The Share application money pending for allotment in the year ended is Rs.20,45,66,240/-. As the Company had planned to go for public issue in the year 2005-2006, the company had received the application money which has come from the promoters on a premium basis.But due to adverse market conditions the company could not proceedwith the public offer and the same has been held as a part of promoters contribution to the company.As on 01.04.2013 the same amount has been treated as unsecured loans from promoters.

Term Loan includes Loan taken from Axis Bank Limited of Rs.3.50 Crores availed on 20.08.2006 and the same is secured by way of mortgage of property situated at Chennai.Till 31.03.2014 we have repaid 92 EMI''s and balance 28 are due.Total term of the loan is 120 Months.

The Company has availed working capital facility from Central Bank of India, State Bank of India, The Federal Bank Limited, the same are secured by hypothecation of the present and future stock of Raw Materials, Finished Goods, Consumables and Book Debts, The First Charge is on the Current Assets and the Second Charges on the Fixed Assets of the Company. Unsecured Loans received from directors and other body corporates are repayable on demand and are interest free.

The Company has not received information from vendors regarding their status under Micro, small and medium enterprises Act, 2006.The Disclosures relating to amounts unpaid as at the year end together with interest payable/paid under this act could not be given.

During the year The Company has launched a new exclusive product in the brand name of Shakti TMT and has incurred a business promotion expenditure of Rs.1.42 Crores.

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Mar 31, 2010

I. System of Accounting :

The Financial Statements are prepared under the historical cost convention and accrual concept.

ii. Sales :

Sales are invoiced on delivery of goods to the customers. Invoiced value of sales including excise duty and VAT.

iii. Fixed Assets and Depreciation :

All fixed Assets are stated at cost inclusive of all installation expenses incurred relating to acquisition. Depreciation is provided on straight line method at the rates specified in Schedule XIV of the Companies Act,1956. Depreciation is charged on pro rata basis on additions to Assets taken into account the date of additions.

iv. Foreign Currency Transactions :

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains / losses arising out of fluctuation in the exchange rates are recognized in Profit and Loss Account in the period in which they arise.

v Inventories :

Stock-in-Trade is valued at cost or net realizable value whichever is lower.

vi. Taxes on Income :

Taxes on Income have been provided as the amount of tax payable in respect of taxable income for the period. Deferred Tax has been provided on the timing difference between taxable income and accounting income subject to consideration of prudence.

vii. Investment :

Investments are stated at cost.

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Mar 31, 2009

I System of Accounting:

The Financial Statements are prepared under the historical cost convention and accrual concept.

ii. Sales:

Sales are invoiced on delivery of goods to the customers. Invoiced value of sales including excise duty and VAT is accounted for as sales;

iii Fixed Assets and Depreciation:

All fixed Assets are stated at cost inclusive of all installation expenses incurred relating to acquisition. Depre- ciation is provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation is charged on pro rata basis on additions to Assets taken into account the date of additions.

iv. Foreign Currency Transactions;

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction.

Gains / losses arising out of fluctuation in the exchange rates are recognized in Profit and Loss Account in the period in which they arise.

v. Inventories:

Stock-in-Trade is valued at cost or net realizable value whichever is lower.

vi. Taxes on Income:

Taxes on Income have been provided as the amount of tax payable in respect of taxable income for the period.

Deferred Tax has been provided on the timing difference between taxable income and accounting income subject to consideration of prudence.

vii. Investment:

Investments are stated at cost.