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Accounting Policies of Bhushan Steel Ltd. Company

Mar 31, 2015

1) PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in compliance to the requirements of the Companies Act, 2013 (the Act), applicable Accounting Standards and the requirements of Schedule-Ill of the Act.

2) BASIS OF PREPARATION

The financial statements have been prepared on historical cost convention, in accordance with applicable Accounting Standards and provisions of the Act as adopted consistently by the Company, except for defined benefit pension / other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of Balance Sheet.

3) USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4) REVENUE / EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards / ownership are transferred to the customer. Sales are inclusive of sales during trial run, excise duty, custom duty. Exports sales are net of ocean freight, insurance and discount.

Dividend is recognized when company's right to receive is established. Interest income is recognized on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

5) FIXED ASSETS

The initial cost of Fixed Assets comprises its purchase price, including import duties, net of modvat / cenvat, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to the depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

Capital expenditure on assets not owned by the company with exclusive right to use is reflected in capital work-in-progress till the period of completion and thereafter in Fixed Assets.

6) ASSETS IN THE COURSE OF CONSTRUCTION

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management's intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

7) INTANGIBLE ASSETS

In accordance with Accounting Standard (AS)-26 relating to intangible assets, all costs incurred on technical know how / license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design / plants / facilities are capitalized at the time of capitalization of the said plant/facility and amortized over a period of three years.

8) IMPAIRMENT OF ASSETS

Carrying amount of cash generating units / fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of carrying value of the asset over the recoverable amount is charged, as an impairment loss to the Statement of Profit and Loss.

9) DEPRECIATION

Depreciation on all fixed assets at Khopoli Plant and a Cold Rolling Plant acquired prior to 1st April, 1996 and Galvanising Plant and Power Plant acquired before 1st April, 2002 including addition or extension forming integral part of above plants at Sahibabad Plant has been provided on Written Down Value method and depreciation on all other fixed assets at Sahibabad Plant and Orissa Plant has been provided on Straight Line Method.

The Economic Useftul Life of all major plants at various units has been determined as per technical assessment and in respect of all other fixed assets the life has been taken as per Schedule-II to the Companies Act, 2013.

The Economic Useful Life of Plants including auxiliary equipments has been determine below:-

S. No. Description of Plant Life Span in Years

1 Sinter Plant 35-38

2 Blast Furnace 35-38

3 Coke Ovens 35-38

4 Rolling Mill in Steel Plant 35-38

5 Basic Oxygen Furnace Converter 35-38

6 DRI Plant 38

7 Tube Mill, Large Dia Pipe Plant, H&T, 35 HTSS

8 Power Plant (Thermal Base) 38

9 Power Plant (HSD / Gas Base) 30

10 Lab Equipment 20

10) INVENTORIES

Inventories are valued at lower of cost or net realizable value, less any provisions for obsolescence.

Cost is determined on the following basis

Raw Material is recorded at cost on a first-in-first-out (FIFO) basis.

Finished goods and work-in-progress are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

Excise duty on closing stock of finished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

11) INVESTMENTS

Investments are classified into Current and Non-current investments. Current investments are stated at lower of cost or market value / fair value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

12) FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item.

13) BORROWING COST

Borrowing Cost relating to acquisition or construction of qualifying assets are included in the costs of those assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

14) MODVAT / CENVAT / VAT

Modvat / Cenvat / Vat claimed on capital goods is credited to Assets / Capital work in progress account. Modvat/ Cenvat/ VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

15) CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

16) EMPLOYEE BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end of twelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Company's contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each Balance Sheet date. The leave encashment and gratuity benefit obligations recognized in the balance sheet represent the present value of the obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reduction in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

17) TAX EXPENSE

Provision for current income tax is made after taking credit for allowance and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)-22 "Accounting for Taxes on Income", the Deferred tax liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

18) LEASES

(a) Lease Payment made on operating lease has been recognized as an expense in the statement of Profit and Loss on straight line basis with reference to lease term and other consideration.

(b) Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

19) DERIVATIVE FINANCIAL INSTRUMENTS

In respect of the financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to Statement of Profit and Loss. The contracts entered into are marked to market at the year end and the resultant profit / loss is charged to Statement of Profit and Loss except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.

20) PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the company, is classified as possible obligation.

Provisions 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 notes.

21) CONTINGENCIES & COMMITMENTS

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the financial position or profitability.


Mar 31, 2014

1) PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in compliance to the requirements of the Companies Act 1956, applicable Accounting Standards and the requirements of Part-I & II of Schedule-VI (revised).

2) BASIS OF PREPARATION

The financial statements have been prepared on historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company, except for Defined benefit pension / other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of Balance Sheet.

3) USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4) REVENUE/EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards / ownership are transferred to the customer. Sales are inclusive of sales during trial run, excise duty, customs duty. exports sales are net of ocean freight, insurance and discount.

Dividend is recognized when company''s right to receive is established. Interest income is recognized on accrual basis in the income statement.

expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

5) EXTRAORDINARY ITEMS

extraordinary items are those income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise, and, therefore, are not expected to recur frequently or regularly.

6) EXCEPTIONAL ITEMS

exceptional items are those items of income or expense arising from ordinary activities, or of such size, nature or incidence that requires separate disclosure to explain the performance of the enterprise.

7) FIXED ASSETS

The initial cost of Fixed Assets comprises its purchase price, including import duties, net of modvat / cenvat, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to the depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

Capital expenditure on assets not owned by the company with exclusive right to use is refected in capital work-in-progress till the period of completion and thereafter in Fixed Assets.

8) ASSETS IN THE COURSE OF CONSTRUCTION

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available

for use but incapable of operating at normal levels until a period of commissioning has been completed.

9) INTANGIBLE ASSETS

In accordance with Accounting Standard (AS)-26 relating to intangible assets, all costs incurred on technical know how / license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design / plants / facilities are capitalized at the time of capitalization of the said plant/facility and amortized over a period of three years.

10) IMPAIRMENT OF ASSETS

Carrying amount of cash generating units / fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of carrying value of the asset over the recoverable amount is charged, as an impairment loss to the Statement of profit and Loss.

11) DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956 except :

a) Cold Rolling Plant situated at Sahibabad acquired prior to 1st April, 1996, Galvanizing Plant, Power Plant acquired before 1st April, 2002 including addition or, extension forming integral part of above plants on which depreciation is provided on written down value method.

b) Plant situated at Khopoli (Maharashtra) on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

On incremental / decremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation has been provided as aforesaid over the residual life of the respective plants.

Capital expenditure on assets not owned by the company with exclusive right to use is amortized over a period of five years from the year in which the relevant assets have been completed and available for use. In other cases these are amortised in the year in which expenditure is incurred.

Premium on leasehold land is amortized over the period of lease except on leasehold land acquired on lease of ninety years or more. Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs.5,000/- or less are depreciated in full in the year of purchase.

12) INVENTORIES

Inventories are valued at lower of cost or net realizable value, less any provisions for obsolescence.

Cost is determined on the following basis :- Raw Material is recorded at cost on a frst-in-frst-out (FIFO) basis.

Finished goods and work-in-progress are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

excise duty on closing stock of fnished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

13) INVESTMENTS

Investments are classified into Current and Non-current investments. Current investments are stated at lower of cost or market value / fair

value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

14) FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of profit and Loss except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item.

15) BORROWING COST

Borrowing Cost relating to acquisition or construction of qualifying assets are included in the costs of those assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

16) MODVAT / CENVAT / VAT

Modvat / Cenvat / Vat claimed on capital goods is credited to Assets / Capital work in progress account. Modvat/Cenvat/VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

17) CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

18) EMPLOYEE BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end of twelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a Defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Company''s contribution to state Defined contribution plans namely employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, Defined benefit plans, are determined using the Projected unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each Balance Sheet date. The leave encashment and gratuity benefit

obligations recognized in the balance sheet represent the present value of the obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reduction in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Statement of profit and loss.

19) TAX EXPENSE

Provision for current income tax is made after taking credit for allowance and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)-22 "Accounting for Taxes on Income", the Deferred tax liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

20) LEASES

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

21) DERIVATIVE FINANCIAL INSTRUMENTS

In respect of the financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to Statement of profit and Loss. The contracts entered into are marked to market at the year end and the resultant profit / loss is charged to Statement of profit and Loss except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.

22) PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the company, is classified as possible obligation.

Provisions 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 notes.

23) CONTINGENCIES & COMMITMENTS

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very diffcult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the financial position or profitability.

The holders of equity Shares has one vote for each equity share held by them. The registered holders of equity Shares are entitled to dividend declared from time to time. The Preference Shareholders are entitled to pro-rata dividend in preference over equity Shareholders. The dividend is cumulative at the rate specified against each category.

The premium on redemption of preference shares to the extent of premium received on issue will be adjusted against the security premium account and any premium paid over the above said amount shall be paid out of current appropriation / General Reserve.

The Preference Shares are not convertible in equity and for terms of redemption. (Refer Note 31)

Foot Note:

(1) 12.00% Redeemable Non-Convertible 250 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.2500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 250 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.2500 Lacs). Debentures are redeemable at par in one bullet payment at the end of 10th year from the date of allotment i.e 31.08.2012 and are Secured by frst charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Shri B.B.Singal & Shri Neeraj Singal.

(2) 12.50% Redeemable Non-Convertible 2000 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.20000 Lacs (Previous

Year Rs.NIL) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 30.08.2013 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(3) 12.00% Redeemable Non-Convertible 100 Debentures of Rs.100 Lacs each outstanding on 31st March 2014 Rs.10000 Lacs (Previous Year 12.00% Redeemable Non Convertible Debentures of Rs.100 Lacs each outstanding on 31st March 2013 Rs.10000 Lacs) (subordinate debt),are redeemable at par in one bullet payment at the end of 10 years and 1 Month from the date of allotment i.e 31.03.2008 and are secured by subsequent and subservient charge by way of hypothecation on the present and future assets of the Company so as to maintain

minimum asset coverage of 1.25 times, throughout the currency of the Debentures.Debentures are further secured by pledge of equity Shares of Bhushan Steel Limited,having market value not less than 1.5 times of loans,held by promoters/promoter entities,and Personal Guarantee of Shri B.B.Singal and Shri Neeraj Singal.

(4) 11.50% Redeemable Non-Convertible 3500 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.35000 Lacs (Previous Year 11.50% Redeemable Non-Convertible 3500 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.35000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 04.01.2013 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(5) 12.00% Redeemable Non-Convertible 1050 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.10500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 1050 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.10500 Lacs) are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 28.03.2013 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(6) 11.75% Redeemable Non-Convertible 3000 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.30000 Lacs (Previous Year 11.75% Redeemable Non-Convertible 3000 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.30000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 02.02.2012 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(7) 12.00% Redeemable Non-Convertible 4750 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.47500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 4750 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.47500 Lacs). Debentures are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 31.08.2012 and are Secured by frst charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Assets Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Shri B.B.Singal and Shri Neeraj Singal.

(8) 10.50% Redeemable Non-Convertible 3000 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.30000 Lacs (Previous Year 10.50% Redeemable Non-Convertible 3000 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.30000 Lacs ) Debentures are redeemable at par in three equal anuual installments commencing from the end of 6th year from the date of allotment i.e 13.08.2010 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(9) 10.90% Redeemable Non-Convertible 1750 Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.17500 Lacs (Previous Year 10.90% Redeemable Non-Convertible 1750 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.17500 Lacs) are redeemable at par in four equal annual installments commencing from the end of 5th year from the date of allotment i.e 26.08.2010 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(10) 10.20% Redeemable Non-Convertible Nil Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.NIL (Previous Year 10.20% Redeemable Non-Convertible 1000 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.10000 Lacs) are redeemable at par in one bullet payment at the end of 7th year from the date of allotment i.e 26.03.2007 and are Secured by frst charge on pari passu basis on the fixed assets of the Company.

(11) 11.50% Redeemable Non-Convertible Nil Debentures of Rs.10 Lacs each outstanding on 31st March 2014 Rs.NIL (Previous Year 11.50% Redeemable Non-Convertible 1500 Debentures of Rs.10 Lacs each outstanding on 31st March 2013 Rs.7500 Lacs) were secured by subsequent and subservient charge on the movable fixed assets of the Company.

(12) Secured by frst mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding Specific charge created in favour of eCA Lenders), ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement,except Rs.37933 Lacs (Previous Year Rs.49658 Lacs) secured by subsequent & subservient charge on movable assets. Out of the above, the eCA Loans of Rs.290449 Lacs (Previous Year Rs.261124 Lacs) financed by eCA Lenders are secured by frst exclusive charge on the assets financed & personal guarantee of two promoter directors. Out of these,Loans of Rs.874937 Lacs (Previous Year Rs.758367 Lacs) are guaranteed by the Personal Guarantee of two promoter directors & Loans of Rs.19182 Lacs (Previous Year Rs.15053 Lacs) are guaranteed by the Personal Guarantee of one Promoter Director.

(13) Secured by frst mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding Specific charge created in favour of eCA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement,except Rs.4700 Lacs (Previous Year Rs.36996 Lacs) secured by subsequent & subservient charge on movable assets.Loans of Rs.1341416 Lacs (Previous Year Rs.786878 lacs) are guaranteed by the Personal Guarantee of two promoter directors & Loans of Rs.447398 Lacs (Previous Year Rs.501130 Lacs) are guaranteed by the Personal Guarantee of one Promoter Director.Apart from this,Loans of Rs.175662 Lacs (Previous year Rs.NIL) are also secured by pledge of 26% shares of Bhushan Steel Limited.

(14) Out of these Loans of Rs.3750 Lacs (Previous year Rs.6000 Lacs) are Secured by frst mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding Specific charge created in favour of eCA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement and guaranteed by the Personal Guarantee of one Promoter Director.Apart from this Loans of Rs.1793 Lacs(Previous year Rs.NIL) are secured by subsequent & subservient charge on movable assets.

(15) Secured by the hypothecation of Specific assets.

(16) Guaranteed by the Personal Guarantee of one Promoter Director.

(17) Out of these Loans of Rs.NIL (Previous Year Rs.31487 Lacs) are guaranteed by the Personal Guarantee of two Promoter Directors & Loans of Rs.NIL (Previous Year Rs.10860 Lacs) are guaranteed by the Personal Guarantee of one Promoter Director.

Detail of Repayment and Rate of Interest

(18) Maturity Profle of Long Term Borrowing (Other than NCDs) are set out as below:

(Rs in Lacs) 1 year 2-3 Years Beyond 3 years

Term Loans 338497 569500 1784110

(19) Domestic Loans sanctioned by SBI Syndication for Phase I & II of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.00% (presently 12.00% p.a.) and repayable in 24 quarterly installments commencing from 24 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(20) Foreign Currency Loans for Phase I & II of Orissa project was sanctioned at interest rate of euRIBOR 0.45% (Presently 0.794% p.a.) repayable in 20 Half Yearly Installments commencing from six Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(21) Domestic Loans sanctioned by SBI Syndication for Phase III of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.50% (presently 12.50% p.a.) and repayable in 17 quarterly installments commencing from 18 months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(22) Foreign Currency Loans for Phase III of Orissa project was sanctioned at interest rate of euRIBOR 1.50% (Presently 1.944% p.a.) repayable in 20 half yearly installments commencing from 6 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(23) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of uSD LIBOR 3.95% (Presently 4.309% p.a.) repayable in 6 annual installments commencing from 36 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(24) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of euRIBOR 1.75% (Presently 2.093% p.a.) repayable in 18 half yearly installments commencing from three Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(25) Domestic Loans sanctioned for Coke Oven 2 of Orissa project was sanctioned at rate of interest of Base Rate 2.50% (Presently 12.00% p.a.) and repayable in 24 quarterly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(26) Foreign Currency Loans for Coke Oven 2 of Orissa Project was sanctioned at interest rate of euRIBOR 4.50% (Presently 4.9562%

p.a.) repayable in 12 half yearly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(27) Other Foreign Currency Loan for Orissa Project was sanctioned at rate of interest of uSD LIBOR 3.50% (Presently 3.9459% p.a. ) repayable in three annual installments commencing from 48 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(28) Domestic Loans sanctioned for CRCA & CRNGO Project of Orissa project was sanctioned at rate of interest of Base Rate 2.25% (Presently 12.25% p.a.) and repayable in 24 quarterly installments commencing from 12 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(29) Domestic Loans sanctioned for Addition,modification & Replacement Project at Orissa Site was sanctioned at rate of interest of Base Rate TP 1.25% (Presently 12.00% p.a.) and repayable in 32 quarterly installments commencing from 3 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

(30) Domestic Loans sanctioned for shoring up of Net Working Capital / Normal Capital expenditure was sanctioned at rate of interest of Base Rate 2.50% (Presently 12.50% p.a.) and repayable in 40 quarterly installments commencing from 30th June 2016 as per terms stipulated in respective loan/facility agreement/s.

(31) Rate of interests of other Term Loans/Foreign Currency Loans are linked with the Base Rate / LIBOR of the respective lenders.

Foot Note :

(1) Working Capital Loans are secured by hypothecation of stock & book debts,second charge on company''s land,building and other immovable properties ranking pari passu inter-se and personal guarantee of two promoter directors.

(2) Including Commercial Papers Rs.2500 Lacs (Previous Year Rs.Nil) personally guaranteed by two promoter directors. Apart from these other loans are secured by Subsequent and subservient charge on movable assets of the company. Out of these(other than commercial papers) Loans of Rs.nil (Previous Year Rs.15000 Lacs ) were guaranteed by the personal guarantee of two promoter directors & Loans of Rs.31950 Lacs (previous year Rs.25000 Lacs) are guaranteed by the personal guarantee of one promoter director.

(3) Secured by Subsequent and subservient charge on movable assets of the company.Out of these Loans of Rs.NIL (Previous Year Rs.9990 Lacs ) were guaranteed by the personal guarantee of two promoter directors & Loans of Rs.NIL (previous year Rs.4890 Lacs) are guaranteed by the personal guarantee of one promoter director.

(4) Including Commercial Papers Rs.Nil (Previous Year Rs.63000 Lacs) personally guaranteed by two promoter directors. Apart from these Loans of Rs.nil (Previous Year Rs.5032 Lacs) were personally guaranteed by one promoter director.

(5) Rs.NIL (Previous Year Rs.10860 lacs) guaranteed by the personal guarantee of one promoter director.

Notes:

1. Certain Building under Possession of the Company are pending registration in the name of the Company.

2. No write off has been done for lease hold land acquired on lease of 90 years and more.

3. Depreciation for the year includes Rs.1314.50 Lacs (Previous Year Rs.748.40 Lacs) charged to Capital Work In Progress.

4. Adjustment during the year includes addition of Rs.143554.32 Lacs (Previous Year Rs.62802.07 Lacs) on account of borrowing cost / exchange fuctuation and deduction of Rs.946.77 Lacs (Previous Year Rs.267.03 Lacs) on account of depreciation capitalised.


Mar 31, 2013

1) PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in compliance to the requirements of the Companies Act 1956, applicable Accounting Standards and the requirements of Part-I & II of Schedule-VI (revised).

2) BASIS OF PREPARATION

The financial statements have been prepared on historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company, except for defined benefit pension / other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of Balance Sheet.

3) USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4) REVENUE/EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards / ownership are transferred to the customer. Sales are inclusive of sales during trial run, excise duty, customs duty. Exports sales are net of ocean freight, insurance and discount.

Dividend is recognized when company''s'' right to receive payment is established. Interest income is recognized on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

5) EXTRAORDINARY ITEMS

Extraordinary items are those income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise, and, therefore, are not expected to recur frequently or regularly.

6) EXCEPTIONAL ITEMS

Exceptional items are those items of income and expense arising from ordinary activities, or of such size, nature or incidence that requires separate disclosure to explain the performance of the enterprise.

7) FIXED ASSETS

The initial cost of Fixed Assets comprises its purchase price, including import duties, net of modvat / cenvat, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to the depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

Capital expenditure on assets not owned by the company with exclusive right to use is reflected in capital work-in-progress till the period of completion and thereafter in Fixed Assets.

8) ASSETS IN THE COURSE OF CONSTRUCTION

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

9) INTANGIBLE ASSETS

In accordance with Accounting Standard (AS)-26 relating to intangible assets, all costs incurred on technical know how / license fee relating to production process are charged to revenue in the year of incurrence.Technical know how / license fee relating to process design / plants / facilities are capitalized at the time of capitalization of the said plant / facility and amortized over a period ofthree years.

10) IMPAIRMENT OF ASSETS

Carrying amount of cash generating units / fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of carrying value of the asset over the recoverable amount is charged, as an impairment loss to the statement of Profit and Loss.

11) DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956 except :

a) Cold Rolling Plant situated at Sahibabad acquired prior to 1st April, 1996, Galvanizing Plant, Power Plant acquired before 1st April, 2002 including addition or, extension forming integral part of above plants on which depreciation is provided on written down value method.

b) Plant situated at Khopoli (Maharashtra) on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

On incremental / decremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation has been provided as aforesaid over the residual life of the respective plants.

Capital expenditure on assets not owned by the company with exclusive right to use is amortized over a period of five years from the year in which the relevant assets have been completed and available for use. In other cases these are amortised in the year in which expenditure is incurred.

Premium on leasehold land is amortized over the period of lease except on leasehold land acquired on lease of ninety years or more. Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs.5,000/- or less are depreciated in full in the year of purchase.

12) INVENTORIES

Inventories are valued at lower of cost or net realizable value, less any provisions for obsolescence.

Cost is determined on the following basis :-

Raw Material is recorded at cost on a first-in-first-out (FIFO) basis.

Finished goods and work-in-progress are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

Excise duty on closing stock of finished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

13) INVESTMENTS

Investments are classified into Current and Non-current investments. Current investments are stated at lower of cost or market value / fair value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

14) FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item.

15) BORROWING COST

Exchange difference on foreign currency borrowings relating to acquisition or construction of qualifying assets are included in the costs of those assets when they are recorded as adjustment to interest costs on those foreign currency borrowings. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

16) MODVAT / CENVAT / VAT

Modvat / Cenvat / Vat claimed on capital goods is credited to Assets / Capital work in progress account. Modvat / Cenvat / VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

17) CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

18) EMPLOYEE BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end ofthe period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end oftwelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Company''s contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each Balance Sheet date. The leave encashment and gratuity benefit obligations recognized in the balance sheet represent the present value ofthe obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reduction in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Statement of profit and loss.

19) TAX EXPENSE

Provision for current income tax is made after taking credit for allowance and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)-22 "Accounting for Taxes on Income", the Deferred tax liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

20) LEASES

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

21) DERIVATIVE FINANCIAL INSTRUMENTS

In respect of the financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to Statement of Profit and Loss. The contracts entered into are marked to market at the year end and the resultant profit / loss is charged to Statement of Profit and Loss except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.

22) PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the company, is classified as possible obligation.

Provisions 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 notes.

23) CONTINGENCIES & COMMITMENTS

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the financial position or profitability.


Mar 31, 2012

1) PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in compliance to the requirements of the Companies Act 1956, applicable Accounting Standards and the requirements of PartI & II of ScheduleVI (revised).

2) BASIS OF PREPARATION

The financial statements have been prepared on historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company, except for defined benefit pension/ other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of Balance Sheet.

3) USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4) REVENUE/EXPENDITURE RECOGNITION

Revenue is recognized when it can be realibly measured and when all significant risks and rewards/ownership are transferred to the customer. Sales are inclusive of sales during trial run, excise duty, customs duty. Exports sales are net of ocean freight, insurance and discount.

Dividend is recognized when company's' right to receive payment is established. Interest income is recognized on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

5) EXTRAORDINARY ITEMS

Extraordinary items are those income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise, and, therefore, are not expected to recur frequently or regularly.

6) EXCEPTIONAL ITEMS

Exceptional items are those items of income and expense arising from ordinary activities, or of such size, nature or incidence that requires separate disclosure to explain the performance of the enterprise.

7) FIXED ASSETS

The initial cost of Fixed Assets comprises its purchase price, including import duties, net of modvat/cenvat, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to the depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

Capital expenditure on assets not owned by the company with exclusive right to use is reflected in capital workinprogress till the period of completion and thereafter in Fixed Assets.

8) ASSETS IN THE COURSE OF CONSTRUCTION

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management's intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

9) INTANGIBLE ASSETS

In accordance with Accounting Standard (AS)26 relating to intangible assets, all costs incurred on technical know how/ license fee relating to production process are charged to revenue in the year of incurrence.Technical know how/license fee relating to process design/plants/facilities are capitalized at the time of capitalization of the said plant/facility and amortized over a period of three years.

10) IMPAIRMENT OF ASSETS

Carrying amount of cash generating units/fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of carrying value of the asset over the recoverable amount is charged as an impairment loss to the statement of Profit and Loss.

11) DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956 except:

a) Cold Rolling Plant situated at Sahibabad acquired prior to 1st April, 1996, Galvanizing Plant, Power Plant acquired before 1st April, 2002 including addition or, extension forming integral part of above plants on which depreciation is provided on written down value method.

b) Plant situated at Khopoli (Maharashtra) on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

On incremental / decremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation has been provided as aforesaid over the residual life of the respective plants.

Capital expenditure on assets not owned by the company with exclusive right to use is amortized over a period of five years from the year in which the relevant assets have been completed and available for use. In other cases these are amortised in the year in which expenditure is incurred.

Premium on leasehold land is amortized over the period of lease except on leasehold land acquired on lease of ninety years or more. Depreciation is charged on prorata basis for assets purchased / sold during the year. Individual assets costing Rs.5,000/ or less are depreciated in full in the year of purchase.

12) INVENTORIES

Inventories are valued at lower of cost or net realizable value, less any provisions for obsolescence.

Cost is determined on the following basis :

Raw Material is recorded at cost on a firstinfirstout (FIFO) basis.

Finished goods and workinprogress are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

Excise duty on closing stock of finished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

13) INVESTMENTS

Investments are classified into Current and Noncurrent investments. Current investments are stated at lower of cost or market value/fair value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

14) FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Nonmonetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item or 31st March, 2013, which ever is earlier.

15) BORROWING COST

Exchange difference on foreign currency borrowings relating to acquisition or construction of qualifying assets are included in the costs of those assets when they are recorded as adjustment to interest costs on those foreign currency borrowings. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

16) MODVAT / CENVAT / VAT

Modvat / Cenvat / Vat claimed on capital goods is credited to Assets / Capital work in progress account. Modvat/Cenvat/VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

17) CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

18) EMPLOYEE BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end of twelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Company's contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each Balance Sheet date. The leave encashment and gratuity benefit obligations recognized in the balance sheet represent the present value of the obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reduction in future contributions to the plan. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

19) TAX EXPENSE

Provision for current income tax is made after taking credit for allowance and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)22 "Accounting for Taxes on Income", the Deferred tax liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

20) LEASES

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

21) DERIVATIVE FINANCIAL INSTRUMENTS

In respect of the financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to Statement of Profit and Loss. The contracts entered into are marked to market at the year end and the resultant profit / loss is charged to Statement of Profit and Loss except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.

22) PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the company, is classified as possible obligation.

Provisions 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 notes.

23) CONTINGENCIES & COMMITMENTS

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the company does not expect them to have a materially adverse impact on the financial position or profitability.


Mar 31, 2011

1. CONVENTION

Financial statements are prepared in accordance with generally accepted accounting principles, applicable Accounting Standards and in accordance with relevant requirements of the Companies Act, 1956. A summary of important accounting policies, which have been applied consistently, is set out below.

2. USE OF ESTIMATES

The preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

3. BASIS FOR PREPARATION OF ACCOUNTS

Financial statements are prepared in accordance with the historical cost convention on accrual basis.

4. FIXED ASSETS

Fixed Assets are stated at cost, net of Modvat/Cenvat/Vat/GST, less accumulated depreciation. All costs including borrowing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to long term monetary items attributable to depreciable fixed assets are captialised. Capital expenditure on assets not owned by the Company with exclusive right to use is reflected in capital work in progress till the period of completion and thereafter in the fixed assets. Machinery spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalised. Replacement of such spares ischarged to revenue.

5. INTANGIBLE ASSETS

Computer software is capitalized on the date of installation and is amortised over a period of three years.

6. IMPAIRMENT OF ASSETS

Carrying amount of cash generating units/assets is reviewed for impairment. Impairment, ifany, is recognized where the carrying amount exceeds the recoverable amount being the higher of net realizable price and value in use.

7. DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, except:-

a) Cold Rolling Plant situated at Sahibabad acquired prior to 1 st April, 1 996, Galvanizing Plant, Power Plant acquired before 1 st April, 2002 including addition or, extension forming integral part of above plants on which depreciation is provided on written down value method.

b) Plant situated at Khopoli (Maharashtra) on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 On incremental / decremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation has been provided as aforesaid over the residual life of the respective plants.

Capital expenditure on assets not owned by the company with exclusive right to use is amortized over a period of five years from the year in which the relevant assets have been completed and available for use. In other cases these are amortised in the year in which expenditure is incurred.

Premium on leasehold land is amortized over the period of lease except on leasehold land acquired on lease of ninety years or more. Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs.5000 or less are depreciated in full in the year of purchase.

8. FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item or 31 st March, 201 2, which ever is earlier.

9. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

10.INVESTMENTS

Investments are classified into current investments and long term investments. Current investments are stated at the lower of cost and quoted / fair value. Long term investments are stated at cost, provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

11 .DIVIDEND INCOME

Dividend on investments is accounted for as and when the right to receive the same is established.

12.REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are inclusive of sales during trial run, excise duty, custom duty and net of sales tax & discount. Export sales are net of ocean freight, insurance and discount.

13.INVENTORY VALUATION

Inventories are valued at lower of cost or net realisable value except scrap which is valued at net realisable value. The Cost is determined by using first-in-first-out (FIFO) method. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Excise Duty on closing stock of finished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

14.MODVAT /CENVAT/VAT

Modvat/Cenvat/VAT claimed on capital goods is credited to Assets / Capital work in progress account. Modvat/Cenvat/VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

15.INCOME TAX

Provision for current income tax is made after taking credit for allowances and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the Company.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1 961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)-22 "Accounting for Taxes on Income", the Deferred Tax Liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantiallyenactedasof the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

16.CLAIMS

Claims receivables are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

17.PROPOSED DIVIDEND

Dividend as proposed by the Directors is provided for in the books of accounts, pending approval at the Annual General Meeting.

18.EMPLOYEE BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end of twelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected UnitCredit Method on the basisof annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Company's contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligations recognized in the balance sheet represent the present value of the obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the profit and loss account.

19.PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the company, are classified as possible obligation.

Provisions 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 notes.

20.FINANCIAL DERIVATIVES TRANSACTIONS

In respect of the financial derivative contracts the premium/ interest paid and profit/loss on settlement is charged to profit and loss account. The contracts entered into are mark to market at the year end and the resultant profit /loss is charged to profit and loss account except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.


Mar 31, 2010

1. CONVENTION

Financial statements are prepared in accordance with generally accepted accounting principles, applicable Accounting Standards and in accordance with relevant requirements of the Companies Act, 1956. A summary of important accounting policies, which have been applied consistently, is set out below.

2. USE OF ESTIMATES

The preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

3. BASIS FOR PREPARATION OF ACCOUNTS

Financial statements are prepared in accordance with the historical cost convention on accrual basis.

4. FIXED ASSETS

Fixed Assets are stated at cost, net of Modvat/Cenvat/Vat, less accumulated depreciation. All costs including borrowing costs till commencement of commercial production and adjustment arising from exchange rate variations relating to long term monetary items attributable to depreciable fixed assets are captialised. Capital expenditure on assets not owned by the Company is reflected in capital work in progress account till the period of completion and thereafter in the fixed assets.

Machinery spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalised. Replacement of such spares is charged to revenue.

5. INTANGIBLE ASSETS

Computer software is capitalised on the date of installation and is amortised over a period of three years.

6. IMPAIRMENT OF ASSETS

Carrying amount of cash generating units/assets is reviewed for impairment. Impairment, if any, is recognized where the carrying amount exceeds the recoverable amount being the higher of net realizable price and value in use.

7. DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, except:- a) Cold Rolling Plant situated at Sahibabad acquired prior to 1st April, 1996, Galvanizing Plant, Power Plant acquired before 1st April, 2002 including addition or, extension forming integral part of above plants on which depreciation is provided on written down value method.

b) Plant situated at Khopoli (Maharashtra) on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

On incremental / decremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation has been provided as aforesaid over the residual life of the respective plants.

Capital expenditure on assets not owned by the Company is amortized over a period of five years from the year in which the relevant assets have been completed and available for use.

Premium on leasehold land is amortized over the period of lease except on leasehold land acquired on lease of ninety years or more. Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs. 5000 or less are depreciated in full in the year of purchase.

8. FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currency outstanding at the year end are translated at exchange rate applicable on the date of Balance Sheet. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account except in cases of long term monetary items, where these relate to the acquisition of depreciable fixed assets, are adjusted to the carrying cost of such assets and in other cases are amortized over the period of such long term monetary item or 31st March, 2011, which ever is earlier.

9. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

10. INVESTMENTS

Investments are classified into current investments and long term investments. Current investments are stated at the lower of cost and quoted / fair value. Long term investments are stated at cost, provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

11. DIVIDEND INCOME

Dividend on investments is accounted for as and when the right to receive the same is established.

12. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are inclusive of sales during trial run, excise duty, custom duty and net of sales tax & discount. Export sales are net of ocean freight, insurance and discount.

13. INVENTORY VALUATION

Inventories are valued at lower of cost or net realisable value except scrap which is valued at net realisable value. The Cost is determined by using first-in-first-out (FIFO) method. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Excise Duty on closing stock of finished goods and scrap is accounted for on the basis of payments made in respect of goods cleared as also provision made for goods lying in the factory and included in the value of such stocks.

14. MODVAT /CENVAT/VAT

Modvat/Cenvat/VAT claimed on capital goods is credited to Assets / capital work in progress account. Modvat/Cenvat/VAT on purchase of raw materials and other materials are deducted from the cost of such materials.

15. INCOME TAX

Provision for current income tax is made after taking credit for allowances and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the Company. Provision for fringe benefit tax is made on fringe benefits taxable under the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset.

In accordance with the Accounting Standard (AS)-22 "Accounting for Taxes on Income", the Deferred Tax Liability for timing differences between the book and tax profits is accounted for using the tax rates and tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

16. CLAIMS

Claims receivables are accounted for depending on the certainty of receipt and claims payables are accounted for at the time of acceptance.

17. PROPOSED DIVIDEND

Dividend as proposed by the Directors is provided for in the books of account, pending approval at the Annual General Meeting.

18. EMPLOYEES BENEFITS

Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render service) are measured at cost. Long term employee benefits (which are payable after the end of twelve months from end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuations.

Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

Companys contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare fund are made in accordance with the statute, and are recognized as an expense when employees have rendered services entitling them to the contribution.

The cost of providing leave encashment and gratuity, defined benefit plans, are determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The leave encashment and gratuity benefit obligations recognized in the balance sheet represent the present value of the obligations as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognized immediately in the profit and loss account.

19. PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. Where the demand notices are raised, the show cause notice, disputed by the Company, are classified as possible obligation.

Provisions 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 notes.

20. FINANCIAL DERIVATIVES TRANSACTIONS

In respect of the financial derivative contracts the premium/ interest paid and profit/loss on settlement is charged to profit and loss account. The contracts entered into are mark to market at the year end and the resultant profit /loss is charged to profit and loss account except where these relate to long term monetary items attributable to depreciable fixed assets in which case it is adjusted to the cost of fixed assets.

 
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