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Accounting Policies of Ankit Metal & Power Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

a) These Financial Statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable.

b) All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

c) Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as "0.00" in the relevant notes in these Financial Statements.

1.2 Tangible Assets, Intangible Assets and Capital Work-in-Progress

a) Tangible Assets are stated at cost of acquisition less accumulated depreciation and impairment losses, if any.

b) Expenditure which are of Capital in nature are capitalised which comprises of purchase price and all other expenditure directly attributable to bringing the assets to its working condition for the intended use. Assets under erection / installation are shown as Capital Work-in-Progress. Capital Work-in-Progress are net of CENVAT credit availed / available thereon.

c) Intangible Assets are stated at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and impairment losses, if any.

d) Interest on borrowing costs related to qualifying assets is worked out on the basis of actual utilisation of funds out of project specific loans and/or other borrowings to the extent identifiable with the qualifying assets and are capitalised with the cost of qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection / acquisition on commencement of commercial production.

e) Subsidy received / or crystallisation in respect of fixed assets are deducted from the cost of respective assets.

f) Variations of exchange rate attributable to fixed assets are capitalised.

1.3 Depreciation & Amortisation

a) Depreciation on Fixed Assets is calculated on the Straight Line Method at the rate prescribed under the Schedule II of Companies Act, 2013.

b) Intangible Assets are amortised over their respective individual estimated useful lives on a straight-line basis commencing from the date the assets is available to the Company for its use.

1.4 Inventories

Inventories are valued at lower of Cost and Net Realisable Value. Cost is computed on FIFO basis. Finished goods and Work-in-Progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

1.5 Investments

Long Term Investment are valued at cost. Provision for diminution in value of these investments is made only if such a decline other than of temporary in nature.

1.6 Excise Duty

Excise duty on finished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of finished goods stock as on the Balance Sheet date.

1.7 Recognition of Income & Expenditures

a) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

b) Sales are recognised net of trade discounts, rebates, sales tax and excise duties.

c) Export Incentives Income arising out of Export Sales are accounted for on accrual basis.

d) Purchases are inclusive of freight and the net of CENVAT/VAT Credit, Trade Discount and Claims.

e) Gain and losses from the remeasurement and settlement of financial instrument at fair value are reported in the financial result through profit and loss.

f) Interest income is recognised on a time proportion basis taking into account and the amount outstanding and the rate applicable.

g) Income from commission is recognised based on agreements/arrangements with the customers as the service is performed using the proportionate completion method, when no significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the service.

1.8 Subsidy

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystallisation.

b) The Company has been granted eligibility certificate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notification no. 276-CI/G/Incentive/052/05/i dt. 19.05.2005, effective from 1st April, 2004. Under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

1.9 Foreign Currency Transaction

Foreign Currency Transactions are accounted for at the exchange rates prevailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

1.10 Taxation

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961, Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, 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.

1.11 Segment Reporting

The Company has identified Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with different risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard - 17 " Segment Reporting" as issued by the 'The Institute of Chartered Accountants of India'.

1.12 Retirement Benefits

a) Liability with regards to long-term employee benefits is provided for on the basis of actuarial valuation at the Balance sheet date. Actuarial gain/ loss is recognised immediately in the statement of Profit & Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement benefit in the form of contribution to Provident Fund is a defined contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short - term compensated absences are provided for on the basis of estimates.

1.13 Preliminary & Public Issue Expenses

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the share premium.

1.14 Borrowing Costs

a) Borrowing costs and its related expenses that are directly att ributable to the acquisition, construction or production of a qualifying assets is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expenses in the period in which they are incurred.

b) Net exchange gain/loss on foreign currency borrowings to the extent considered as an adjustment to interest cost is attributable to the finance cost.

1.15 Impairment of Assets

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is charged to the statement of Profit & Loss to the extent the carrying amount exceeds the recoverable amount.

1.16 Provision, Contingent Liabilities and Contingent Assets -

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes unless the possibility of outflow of resources is remote. Contingent Assets are neither recognised nor disclosed in the Financial Statements.




Mar 31, 2014

1. Basis of Preparation of Financial Statements

a) These Financial Statements have been prepared in accordance with generally accepted accounting principle in India under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notifi ed under the Companies Act, 1956 (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Aff airs in respect of Section 133 of the Companies Act, 2013.

(b) All the assets and liabilities have been classifi ed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of services and the time between acquisition of assets/inputs for processing and their realisation in cash and cash equivalents, the Company has ascertained its normal operating cycle as 12 months for the purpose of current/non-current classifi cation of assets and liabilities.

2. Use of Estimates

The preparation of Financial Statements in conformity with Generally Accepted Accounting Principles requires that the management makes estimates and assumptions that aff ect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the Financial Statements, and the reported amounts of revenue and expenses during the reported year. Actual results could diff er from those estimates.

3. Fixed Assets, Intangible Assets and Capital Work-in-Progress

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation.

b) Expenditure which are of Capital nature are capitalised at a cost which comprises of purchase price and all other expenditure directly attributable to the cost of bringing the assets to its working condition for the intended use. Assets under erection / installation are shown as Capital Work-in-Progress. Capital assets and Capital Work-in- Progress are net of CENVAT credit availed / available thereon.

c) Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and impairment.

d) Interest on borrowing costs related to qualifying assets is worked out on the basis of actual utilisation of funds out of project specifi c Loans and/or other borrowings to the extent identifi able with the qualifying assets and are capitalised with the cost of qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection / acquisition on commencement of commercial production.

e) Subsidy received / or crystallisation in respect of Fixed Assets are deducted from the cost of respective assets.

f) Variations of exchange rate attributable to Fixed Assets are capitalised.

4. Depreciation & Amortisation

a) Depreciation on Fixed Assets is calculated on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV of Companies Act, 1956.

b) Intangible assets are amortised over their respective individual estimated useful lives on a straight-line basis commencing from the date the assets is available to the Company for its use.

5. Inventories

All inventories are valued at lower of Cost, computed on FIFO basis, and Net Realisable Value. Finished goods and Work- in-Progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

6. Excise Duty

Excise duty on fi nished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of fi nished goods stock lying in the factory as on the Balance Sheet date.

7. Recognition of Income & Expenditures

a) Revenue is recognised to the extent that it is probable that the economic benefits will fl ow to the Company and the revenue can be reliably measured.

b) Sales are recognised when the signifi cant risks and rewards of ownership of the goods have passed to the buyer. Sales are inclusive of excise duty but net of trade discounts and VAT. However, excise duty relating to sales is reduced from gross turnover for disclosing net turnover. Domestic sales are recognised at the time of despatch of materials to the buyer. Export sales are recognised on the issue of bill of lading.

c) Export Incentives arising out of Export Sales are accounted for on accrual basis.

d) Purchases are inclusive of freight and the net of CENVAT/VAT Credit, Trade Discount and Claims.

e) Interest income is recognised on a time proportion basis taking into account and the amount outstanding and the rate applicable.

8. Subsidy

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystallisation.

b) The Company has been granted eligibility certifi cate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notifi cation no. 276-CI/O/Incentive/052/05/i dt. 19.05.2005, eff ective from 1st April, 2004. under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

9. Sales

Sales are recognised on despatch of goods to customers. It includes Excise Duty & Sales Tax.

10. Foreign Currency Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year end are restated at the year end rates. All exchange diff erences are dealt within Profit & Loss Account.

11. Taxation

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961, Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, on timing diff erences, being the diff erence between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

12. Segment Reporting

The Company has identifi ed Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with diff erent risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard-17 "Segment Reporting" as issued by the ''The Institute of Chartered Accountants of India''.

13. Retirement Benefits

a) Liability with regards to long term employee benefits is provided for on the basis of actuarial valuation at the Balance sheet date. Actuarial gain/ oss is recognised immediately in the Statement of Profi t & Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement benefit in the form of contribution to Provident Fund is a defi ned contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short-term compensated absences are provided for based on estimates.

14. Preliminary & Public Issue Expenses

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the Share Premium.

15. Borrowing Costs

a) Borrowing costs and its related expenses that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expenses in the period in which they are incurred.

b) Net exchange gain/loss on foreign currency borrowings to the extent considered as an adjustment to interest cost attributable to the fi nance cost.

16. Impairment of Assets

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

17. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the fi nancial statements.

18. Investments

Investments are treated as long term investments and valued at cost less permanent diminution in value of such investments.

Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. On a show of hands, every member present in person or by proxy, is entitled to one vote and in case of poll, the voting rights of every member shall be in proportion to his shares of the paid-up equity share capital of the Company.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

During the year under review the Board of Directors has issued & alloted 267 lacs of Equiy Shares of Rs. 10/- each at a premium of Rs.20/- per share on preferential basis to working capital requirement of the Company, capital expenditure for expansion and modernisation activities and other corporate purposes. The entire proceeds received from the said issue during the year has been fully utilised towards the object of the issue.

A) Nature of Security

i) Term Loan are primary secured by

a) 1st pari-passu charge on fixed assets by way of equitable mortgage of the land & building / shed along with all movable and immovable plant & machinery and other fixed assets thereon at Chhatna Dist. Bankura & extension of second charge on the Company''s current assets on pari passu basis.

b) Collateral Security equitable mortgage on offi ce space at 35, C. R. Avenue, Kolkata on pari passu basis.

c) Personal guarantee of Promoters / Director - Mr. Suresh Kumar Patni, Mr. Rohit Patni, Mr. Ankit Patni & Mrs. Sarita Patni.

d) Corporate guarantee of four group companies - Vasupujaya Enterprises Pvt. Ltd., Poddar Mech Tech Services Pvt. Ltd., Suanvi Trading & Investment Co. Pvt. Ltd., Sarita Steel & Power Ltd. & pledge of 57,44,700 shares of Company in the name of promoters & group associates.

The Company is currently facing cash fl ow shortage, which resulted in defaults in repayment of dues. The Company has approached to the lenders for restructuring of debts under CDR route which is under process.

ii) Loans against Vehicle amounted toRs. 13.93 Lacs are repayable by way of Equated Monthly Installments subsequent to taking of such loan. The original period of such loans is 3 yrs.

iii) Unsecured Loan from Bodies Corporate from Related Parties Rs. NIL & others aggregating to Rs. 1568.57 Lacs. The said Loans are repayable at the option of the Company and are stated by the management to be in the nature of Long Term Borrowings. The average rate of interest is 13.79 %.

Details of Security

Working Capital including SLC are jointly secured by hypothecation of all the Current Assets on 1st Pari Passu Basis & 2nd pari- passu charge by way of extension of charge on the entire Fixed Assets of factory land, building/shed, etc. & along with equitable mortgage on offi ce space at 35, C. R. Avenue, Kolkata on pari passu basis & personal guarantee of Promoters/Directors & Corporate Guarantee of three group Companies - Vasupujaya Enterprises Pvt. Ltd., Poddar Mech Tech Services Pvt. Ltd., Suanvi Trading & Investment Co. Pvt. Ltd., Sarita Steel & Power Ltd. & pledge of 57,44,700 shares of Company in the name of promoters & group associates.

Working Capital Loan from Banks is secured by Personal Guarantee of Promoters/Director - Mr. Suresh Kumar Patni, Mr. Rohit Patni, Mr. Ankit Patni & Mrs. Sarita Patni and subservient charge on all moveable assets including stock and debtor.


Mar 31, 2013

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared as per Revised Schedule - VI under the Companies Act 1956.

b) The financial statements have been prepared under the historical cost convention, on going concern concept and in accordance with the generally accepted accounting principles & the provisions of the Companies Act 1956The Company follows mercantile system of accounting and is in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India''.

c) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles in India.

2. Fixed Assets, Intangible Assets and Capital Work-in-Progress

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation.

b) Expenditure which are of Capital nature are capitalised at a cost which comprises of purchase price and all other expenditures directly attributable to the cost of bringing the assets to its working condition for the intended use. Assets under erection / installation are shown as Capital Work-in-Progress. Capital assets and Capital Work-in- Progress are net of CENVAT credit availed / available thereon.

c) Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and impairment.

d) Interest on borrowing costs related to qualifying assets is worked out on the basis of actual utilisation of funds out of project specific loans and/or other borrowings to the extent identifiable with the qualifying assets and are capitalised with the cost of qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection / acquisition on commencement of commercial production.

e) Subsidy received / or crystallisation in respect of fixed assets are deducted from the cost of respective assets.

f) Variations of exchange rate attributable to fixed assets are capitalised.

3. Depreciation & Amortisation

a) Depreciation on Fixed Assets is calculated on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV of Companies Act 1956.

b) Intangible Assets are amortised over their respective individual estimated useful lives on a straight-line basis commencing from the date the assets is available to the Company for its use.

c) Leasehold land acquired on perpetual lease is not amortised.

4. Inventories

All inventories are valued at lower of Cost computed on FIFO basis, and Net Realisable Value. Finished Goods and Work-in-Progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

5. Excise Duty

Excise duty on finished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

6. Recognition of Income & Expenditures

a) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

b) Sales are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are inclusive of excise duty but net of trade discounts and VAT. However, excise duty relating to sales is reduced from gross turnover for disclosing net turnover. Domestic sales are recognised at the time of despatch of materials to the buyer. Export sales are recognised on the issue of bill of lading.

c) Export Incentives arising out of Export Sales are accounted for on accrual basis.

d) Purchases are inclusive of freight and the net of CENVAT/VAT Credit, Trade Discount and Claims.

e) Interest income is recognised on a time proportion basis taking into account and the amount outstanding and the rate applicable.

7. Subsidy

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystallisation.

b) The Company has been granted eligibility certificate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notification no. 276-CI/O/lncentiveA)52/05/i dt. 19.05.2005, effective from 1st April 2004. Under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

8. Foreign Currency Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year end are restated at the year end rates. All exchange differences are dealt in the Statement of Profit & Loss.

9. Taxation

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961, Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, 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.

10. Segment Reporting

The Company has identified Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with different risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard - 17 "Segment Reporting" as issued by the ''The Institute of Chartered Accountants of India''.

11. Retirement Benefits

a) Liability with regards to long term employee benefits is provided for on the basis of actuarial valuation at the Balance Sheet date. Actuarial gain/ loss is recognised immediately in the Statement of Profit and Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement benefit in the form of contribution to Provident Fund is a defined contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short-term compensated absences are provided for based on estimates.

12. Preliminary & Public Issue Expenses

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the share premium.

13. Borrowing Costs

a) Borrowing costs and its related expenses that are directly attributable to the acquisition, construction or production of a qualifying assets is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expenses in the period in which they are incurred.

b) Net exchange gain/loss on foreign currency borrowings to the extent considered as an adjustment to interest cost attributable to the finance cost.

14. Impairment of Assets

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

15. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

16. Investments

Investments are treated as long term investments and valued at cost less permanent diminution in value of such investments.


Mar 31, 2012

1. Basis of preparation of financial statements :

a) The financial statements have been prepared as per Revised Schedule - VI under the Companies Act, 1956.

b) The financial statements have been prepared under the historical cost convention, on going concern concept and in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956. The Company follows mercantile system of accounting and is in compliance with the Accounting Standards issued by 'The Institute of Chartered Accountants of India1.

c) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles in India.

2. Fixed Assets, Intangible Assets and Capital Work-in-Progress :

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation.

b) Expenditure which are of Capital nature are capitalised at a cost which comprises of purchase price and all other expenditure directly attributable to the cost of bringing the assets to its working condition for the intended use. Assets under erection/ installation are shown as Capital Work-in-Progress. Capital Assets and Capital Work-in-Progress are net of CENVAT credit availed/available thereon.

c) Intangible Assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and impairment.

d) Interest on borrowing costs related to qualifying assets is worked out on the basis of actual utilisation of funds out of project specific loans and/or other borrowings to the extent identifiable with the qualifying assets and are capitalised with the cost of qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection/acquisition on commencement of commercial production.

e) Subsidy received/or crystallisation in respect of Fixed Assets are deducted from the cost of respective assets.

f) Variations of exchange rate attributable to Fixed Assets are capitalised.

3. Depreciation & Amortisation :

a) Depreciation on Fixed Assets is calculated on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV of Companies Act,1956.

b) Intangible Assets are amortised over their respective individual estimated useful lives on a straight-line basis commencing from the date the assets is available to the Company for its use.

4. Inventories :

All inventories are valued at lower of Cost, computed on FIFO basis, and Net Realisable Value. Finished goods and Work-in-Progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

5. Excise Duty :

Excise duty on finished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

6. Recognition of Income & Expenditures:

Revenue/Income and Cost/Expenditures are generally accounted for on accrual basis as they are earned or incurred. Insurance & other claims to the extent considered recoverable, are accounted for in the year of claims. However claims and refunds whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance basis.

7. Subsidy :

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystallisation.

b) The Company has been granted eligibility certificate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notification no. 276-CI/O/Incentive/052/05/i dt. 19.05.2005, effective from 1st April, 2004. Under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

8. Sales :

Sales are recognised on despatch of goods to customers. It includes Excise Duty & Sales Tax.

9. Foreign Currency Transaction :

Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year end are restated at the year end rates. All exchange differences are dealt within Profit & Loss Account.

10. Taxation :

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961, Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, 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.

11. Segment Reporting :

The Company has identified Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with different risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard-17 "Segment Reporting"as issued by the'The Institute of Chartered Accountants of India1.

12. Retirement Benefits:

a) Liability with regards to long-term employee benefits is provided for on the basis of actuarial valuation at the Balance Sheet date. Actuarial gain/loss is recognised immediately in the Statement of Profit and Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement benefit in the form of contribution to Provident Fund is a defined contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short-term compensated absences are provided for based on estimates.

13. Preliminary & Public Issue Expenses :

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the share premium.

14. Borrowing Costs :

a) Borrowing costs and its related expenses that are directly attributable to the acquisition, construction or production of qualifying assets is capitalised as part of the cost of that asset. Other borrowing costs are recognised as expenses in the period in which they are incurred.

b) Net exchange gain/loss on foreign currency borrowings to the extent considered as an adjustment to interest cost attributabe to the finance cost.

15. Impairment of Assets:

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

16. Provision, Contingent Liabilities and Contingent Assets:

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

17. Investments:

Investments are treated as long-term investments and valued at cost less permanent diminution in value of such investments.


Mar 31, 2011

1. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention, on going concern concept and in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956. The Company follows mercantile system of accounting and is in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India'.

b) Accounting polices not specifically referred to otherwise are consistent with generally accepted accounting principles in India.

2. Fixed Assets

a) Fixed Assets are stated at cost of acquisition less accumulated deprecation.

b) Expenditure which are of Capital nature are capitalised at a cost which comprises of purchase price and all other expenditure directly attributable to the cost of bringing the assets to its working condition for the intended use. Assets under erection/installation are shown as Capital work-in-progress. Capital assets and Capital work-in-progress are net of CENVAT credit availed/available thereon.

c) Interest on borrowing costs related to qualifying assets is worked out on the basis of actual utilisation of funds out of project specific loans and/or other borrowings to the extent identifiable with the qualifying assets and are capitalized with the cost of qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection/acquisition on commencement of commercial production.

d) Subsidy received/or crystallisation in respect of fixed assets are deducted from the cost of respective assets.

3. Depreciation

Deprecation on Fixed Assets is calculated on straight line method at the rates and in the manner prescribed in the Schedule XIV of the Companies Act, 1956.

4. Inventories

All inventories are valued at lower of cost, computed on FIFO basis and Net Realisable Value. Finished goods and work- in-progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

5. Excise Duty

Excise duty on finished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

6. Recognition of Income & Expenditures

Revenue/Income and Cost/Expenditures are generally accounted for on accrual basis as they are earned or incurred. Insurance & other claims to the extent considered recoverable, are accounted for in the year of claims. However claims and refunds whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance basis.

7. Subsidy

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystallisation.

b) The Company has been granted eligibility certificate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notification no. 276- CI/O/lncentive/052/05/i dt. 19th May, 2005, effective from 1st April, 2004. Under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

8. Sales

Sales are recognised on despatch of goods to customers. It includes Excise Duty & Sales tax.

9. Foreign Currency Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year end are restated at the year end rates. All exchange differences are dealt within Profit & Loss Account.

10. Taxation

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961, Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, 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.

11. Segment Reporting

The Company has identified Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with different risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard-17 "Segment Reporting" as issued by the The Institute of Chartered Accountants of India'.

12. Retirement Benefits

a) Liability with regards to long term employee benefits is provided for on the basis of actuarial valuation at the Balance Sheet date. Actuarial gain/loss is recognised immediately in the statement of Profit and Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement benefit in the form of contribution to Provident Fund is a defined contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short-term compensated absences are provided for based on estimates.

13. Preliminary & Public Issue Expenses

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the share premium.

14. Borrowing Costs

Borrowing costs and its related expenses that are directly attributable to the acquisition, construction or production of a qualifying assets is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expenses in the period in which they are incurred.

15. Impairment of Assets

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

16. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

17. Investments

Investments are treated as long term investments and valued at cost.


Mar 31, 2010

1. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention, on Going Concern Concept and in accordance with the Generally Accepted Accounting Principles & the provisions of the Companies Act, 1956. The Company follows Mercantile System of accounting and is in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India.

b) Accounting policies not specifically referred to otherwise are consistent with Generally Accepted Accounting Principles in India.

2. Fixed Assets

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation.

b) Expenditure which are of Capital nature are capitalized at a cost which comprises of purchase price and all other expenditure directly attributable to the cost of bringing the assets to its working condition for the intended use. Assets under erection/installation are shown as Capital Work-in-Progress. Capital Assets and Capital Work-in-Progress are net of CENVAT Credit availed/available thereon.

c) Interest on borrowing costs related to Qualifying assets is worked out on the basis of actual utilisation of funds out of project specific loans and/or other borrowings to the extent identifiable with the qualifying assets and are capitalized with the cost of Qualifying assets. Incidental indirect expenses relating to the project are apportioned amongst the Fixed Assets on the basis of their cost of erection/acquisition on commencement of commercial production.

d) Subsidy received/or crystallization in respect of fixed assets are deducted from the cost of respective assets.

3. Depreciation

Depreciation on Fixed Assests is calculated on Straight Line Method at the rates and in the manner prescribed in the Schedule XIV of Companies Act,1956.

4. Inventories

All inventories are valued at lower of Cost, computed on FIFO basis and Net Realisable Value. Finished Goods and Work-in-Progress include cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

5. Excise Duty

Excise duty on finished goods lying at the factory is accounted for at the point of manufacturing of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

6. Recognition of Income & Expenditures

Revenue/Income and Cost/Expenditures are generally accounted for on accrual basis as they are earned or incurred. Insurance & other claims to the extent considered recoverable, are accounted for in the year of claims. However, claims and refunds whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance basis.

7. Subsidy

a) The Company is registered under the West Bengal Incentive Scheme 2000 & 2004 of The Director of Industries, Government of West Bengal. Under the said scheme, the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy, Employment Generation Subsidy, Remission of Stamp Duty & Registration Fee. These shall be accounted for in the year of receipt and/or crystalisation.

b) The Company has been granted eligibility certificate under the West Bengal Incentives to Power Intensive Industries Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide notification no. 276- CI/O/lncentive/052/05/i dt. 19.05.2005, effective from 1st April, 2004. Under the said scheme, the Company is entitled to receive incentive on energy charges, which has been accounted for in the books on accrual basis.

8. Sales

Sales are recognised on despatch of goods to customers. It includes Excise Duty & Sales Tax.

9. Foreign Currency Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year end are restated at the year end rates. All exchange differences are dealt within Profits Loss Account.

10. Taxation

a) Current Tax is determined at the amount of tax payable in respect of taxable income for the period, computed with relevant tax rules and tax laws. In case of tax payable as per provisions of MAT under Section 115JB of the Income Tax Act, 1961 Deferred MAT Credit Entitlement is separately recognised as advance.

b) Deferred Tax is recognised, subject to the consideration of prudence, 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.

11. Segment Reporting

The Company has identified Iron & Steel as the sole business segment and the same has been treated as primary business segment. The Company sells mostly within India and does not have operations in economic environments with different risks and returns, it is considered operating in single geographical segment. Hence, no further disclosure as required under the Accounting Standard -17" Segment Reporting" as issued by the The Institute of Chartered Accountants of India.

12. Retirement Benefits

a) Liability with regards to long term employee benefits is provided for on the basis of actuarial valuation at the Balance Sheet date. Actuarial gain/loss is recognised immediately in the statement of Profit & Loss Account. The Company has an Employee Gratuity Fund managed by the Life Insurance Corporation of India.

b) Retirement Benefit in the form of contribution to Provident Fund is a defined contribution scheme and is charged to Profit & Loss Account in the year when they become due.

c) Short-term compensated absences are provided for based on estimates.

13. Preliminary & Public Issue Expenses

As the future economic benefit of Preliminary & Public Issue Expenses is not ascertainable & thus the same is adjusted with the Share Premium.

14. Borrowing Costs

Borrowing Costs and its related expenses that are directly attributable to the acquisition, construction or production of a Qualifying assets is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expenses in the period in which they are incurred.

15. Impairment of Assets

At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

16. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

17. Investments

Investments are treated as long term investments and valued at cost. B. NOTES ON ACCOUNTS

1. Contingent Liabilities not provided for in the books of Accounts:

a) In respect of Bills Discounted, outstanding as on 31.03.2010 amounting to Rs. 1259.02 Lacs (Previous year - Rs. 1951.46 Lacs).

b) In respect of Letter of Credit amounting to Rs. 508.92 Lacs (Previous year - Rs. 2254.26 Lacs) & Bank Guarantee amounting to Rs. 254.55 Lacs (Previous year - Rs. 275.55 Lacs).

c) Commitments against Capital Expenditure not provided in the accounts (Net of Advances) Rs. 1238.35 Lacs (Previous year - Rs. 180.00 Lacs).

d) Relating to assessment year 2006-07 & 2007-08, a demand of Rs. 21.11 Lacs & Rs. 3.54 Lacs was raised by the D. C. I. T. Circle -3, Kolkata against which the Company has filed an appeal. An amount of Rs. 11.11 Lacs was paid under protest relating to year 2006-07.

e) Relating to assessment year 2005-06 & 2006 -07, a demand of Rs. 318.99 Lacs & Rs. 1003.34 Lacs was raised by the department against which appeal has been filed by the Company.

f) Excise Duty Liability arising out of search operation by the Directorate General of Central Excise Intelligence. However, the Company has paid under protest a sum of Rs. 1.20 Crore pending issuance of any show cause notice.

 
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