Mar 31, 2014
(A) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
(B) Tangible fixed assets
Fixed Assets are stated at cost of acquisition and installation, net of
cenvat, Vat less accumulated Depreciation. Borrowing costs incurred
during the period of construction/Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/alterations
increasing efficiency/capacity of the plant are also capitalized.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to- day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred. Gains or losses arising from derecognition
of fixed assets are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized.
(C) Depreciation on Tangible Fixed Assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher.
(D) Borrowing Costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
(E) Impairment of Tangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset''s recoverable amount. An impairment loss is
recognised in the accounts to the extent the carrying amount exceeds,
the recoverable amount.
(F) Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the company will comply with the conditions
attached to them, and the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Such grants are deducted in reporting the
related expense. Where the grant relates to an asset, it is recognized
as deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Government grants of the nature of promoters'' contribution are credited
to capital reserve and treated as a part of the shareholders'' funds.
(G) Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost.
However, provision for diminution in value is made to recognize a
decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
(H) Inventories
Raw materials and stores and spares are valued at lower of cost and net
realizable value. However, materials and other items held for use in
the production of inventories are not written down below cost if the
stores and spares are determined on FIFO basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty and is determined
on First-in-First-out basis.
Waste is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
(I) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
(J) Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
(K) Employee benefits
Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia is recognized in the period in which
the employee renders the related service.
Post-Employment Benefits
(i) Defined Contribution Plans
The contribution paid/payable under the scheme is recognized during the
period in which the employees render the related services.
(ii) Defined Benefit Plan
The employee''s gratuity fund scheme is company''s defined benefit plan.
The present value of the obligation under such defined benefit plan is
determined on estimate basis.
(L) Income taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Where there is an
unabsorbed depreciation or carry forward loss, deferred tax assets are
recognised only to the extent there is reasonable certainty of
realization in future. Such assets are reviewed at each balance sheet
date to reassess realization.
(M) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the number
of equity shares outstanding during the period.
(N) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
(O) Measurement of EBITDA
As permitted by the Guidance note on the Revised Schedule VI to The
Companies Act, 1956, the company has to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. In its
measurement, the company does not include depreciation and amortization
expense, finance cost and tax expense.
Mar 31, 2012
(1) Basis of Preparation of Financial Statements
(a) The Financial Statements of the Company have been prepared in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP). The Company has prepared theses Financial Statement to
comply in all material aspects with the notified Accounting Standards
by Companies
(Accounting Standards) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956.
(b) The Company follows mercantile system of accounting, unless stated
otherwise.
(c) The Accounts are prepared on the historical basis and on the
Accounting Principles of on Going Concern.
(d) Accounting Policies not specifically referred to otherwise are
consistent and in consonance with generally accepted Accounting
Principles. In applying Accounting Policies, consideration has been
given to Prudence, Substance over form and Materiality.
(e) Expenses and Income considered payable and receivable respectively
are generally accounted for on Accrual Basis.
(2) Change in Accounting Policy
Presentation and Disclosure of the Financial Statements during the year
ended on 31st March, 2012 the revised Schedule VI notified under the
Companies Act, 1956 has become applicable to the Company, for
preparation and presentation of its Financial Statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of Financial Statements. However it
has significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year.
(3) Use of Estimates
The preparation of Financial Statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities as on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognizes in the period in
which the results are known / materialized.
The cost of Semi-Finished and Finished Goods includes the Cost of
Material, Labor and manufacturing overheads.
(5) Fixed Assets, Method of Depreciation, Amortization and Impairment
(a) The Gross Block of Assets is shown at the Cost, which includes
taxes, duties and other identifiable, direct expenses which are
attributable to acquisition of fixed assets and other direct expenses
and overheads incurred up to date on which such assets were first put
to use less accumulated depreciation and impairment loss..
(b) Expenditure incurred during Construction / Erection period is
included under Capital Work-in-Progress and allocated to the respective
Fixed Assets on Completion of Construction / Erection.
(c) Depreciation has been provided in the books on straight-line method
basis at the rate and the method as specified under schedule XIV to the
Companies Act, 1956.
Lease hold Land is for 99 years and therefore Lease provision is not
amortized. Moreover yearly rent paid for the Lease Hold land is
expensed in the Profit & Loss Statement.
(d) The company evaluates impairment of losses on the Fixed Assets
whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable. If such assets are considered
to be impaired, the impairment loss is then recognized for the amount
by which the carrying amount of the assets exceeds recoverable amount,
which is the higher of an assets net selling price and value in use.
(6) Employee Benefits
(a) Defined Contribution Plan
Contribution to the Provident Fund, Pension Fund, Other Funds and Leave
encashment paid during the year are being charged to Profit & Loss
Account.
(b) Liability towards Gratuity is paid to fund maintained by the LIC of
India and administered through a separate trust set up by the Company.
Difference between the fund balance and the accrued liability
determined based on the actuarial valuation as per the Projected Limit
Credit Method by LIC of India is charged to Profit & Loss Account
during the year. Any Shortfall arising in future between the Gratuity
amounts received from LIC of India and an employee actual Gratuity
payable to being undetermined shall be accounted in the year of actual
payment of Gratuity.
(7) Investments
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 in the opinion of the Management.
(8) Accounting for Taxes on Income
(a) Income Tax expenses comprises of Current Tax, Deferred Tax Charge
or Credit. Provision for Current Tax is made with reference to Taxable
Income Computed for the Accounting period, for which the Financial
Statements are prepared and applying the tax rates as applicable.
(b) Deferred tax results from Timing Difference between Book Profit and
Taxable Profit is accounted for using tax rates and laws that have been
'' enacted / or substantial annexed as on the Balance Sheet date.
(c) MAT Credit is recognized as an asset only when there is convincing
evidence that the Company will pay normal Income Tax within the
specified period. The asset shall be reviewed at each Balance Sheet
Date.
(9) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as 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.
(10) Revenue Recognition
(a) Revenue recognized when it is earned and no significant uncertainty
exists as to its realization or collection and is recorded on gross
value including CENVAT and VAT.
(b) Revenue from Job work income is recognized on delivery of the
products, when all significant contractual obligations have been
satisfied.
(c) Other income is accounted on accrual basis.
(11) Earnings per Share
The company reports Basic and Diluted Earnings per Share (EPS) in
accordance with Accounting Standards - 20 on Earnings per Share.
Basic Earnings per share are calculated, by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Diluted
Earnings per share reflect the potential dilution that could occur if
contracts to issue equity shares were exercised or converted during the
period. Diluted earnings per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period, except where the results are
anti-dilutive.
(12) Government Grant Treatment
Government grants of Capital Nature are credited to Capital reserve and
treated as a part of shareholder''s fund.
(13) Segment Information
The company is primarily engaged in a single segment business of
manufacturing , of Iron and Steel items.
(14) Leases
Land subject to operating leases is included under Fixed Assets. Rent
(Lease) payment is recognized in the profit & loss account on a payment
basis over the lease term.
(15) CENVAT Treatment
(a) Revenue from operations and Cost of Materials Consumed are
inclusive of Excise Duty Levied. The excise duty paid net of CENVAT
claimed is accounted separately.
(b) Unutilized balance of CENVAT claimable at the yearend has been
accounted and disclosed separately under the head "Short Term Loans
and Advances" and the CENVAT component at the yearend
inventoried been adjusted accordingly
Mar 31, 2010
1.1 Basis of Preparation of Financial Statements
a) The Financial Statement have been prepared to comply in all material
aspects with the notified Accounting Standards by Companies (Accounting
Standards) Rules, 2006 (as amended) and the relevant provisions of the
Companies Act, 1956.
b) The Company follows mercantile system of accounting, unless stated
otherwise.
Use of Estimates
The preparation of Financial Statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities as on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognises in the period in
which the results are known / materialized.
1.2 Fixed Assets
The Gross Block of Assets is shown at the Cost, which includes taxes,
duties and ether identifiable, direct expenses which are attributable
to acquisition of fixed assets and other direct expenses and overheads
incurred up to date on which such assets were first put to use.
Expenditure incurred during Construction / Erection period is included
under Capital Work-in-Progress and allocated to the respective Fixed
Assets on Completion of æ Construction / Erection.
1.3 Impairment of Assets
The company evaluates impairment of losses on the Fixed Assets whenever
events or changes in circumstances indicate that their carrying amounts
may not be recoverable. If such assets are considered to be impaired,
the impairment loss is then recognised for the amount by which the
carrying amount of the assets exceeds recoverable amount, which is the
higher of an assets net selling price and value in use.
1.4 Depreciation
Depreciation has been provided in the books on straight-line method
basis at the rate and the method as specified under schedule XIV to the
Companies Act, 1956.
Lease hold Land is for 99 years and therefore Lease provision is not
amortized. Moreover yearly rent paid for the Lease Hold land is
expensed in the Profif & Loss Statement.
1.5 Government Grant Treatment
Government grants of Capital Nature are credited to Capital reserve and
treated as a part of shareholders fund.
1.6 Segment Information
The company is primarily engaged in a single segment business of
manufacturing of Iron and Steel items.
1.7 Revenue Recognition
a) Sales are recognized on completion of sale of goods and are recorded
on gross value including CENVAT and VAT.
b) Other income is accounted on accrual basis.
1.8 Segment Information
The company is primarily engaged in a single segment bustnes of
manufacturing of Iron and Steel items.
1.9 Retirement Benefit and Gratuity
Contribution to the Provident Fund, Pension Fund, Other Funds and Leave
encashment paid during the year are being charges to Profit & Loss
Account.
Liability towards Gratuity is paid to fund maintained by the LIC of
India and administered through a separate trust set up by the Company.
Difference between the fund balance and the accrued liability
determined based on the actuarial valuation as per the Projected Limit
Credit Method by LIC of India is charged to Profit & Loss Account
during the year. Any Shortfall arising in future between the Gratuity
amounts received from LIC of India and an employee actual Gratuity
payable to being undetermined shall be accounted in the year of actual
payment of Gratuity.
1.10Valuation of Stock
a) Raw materials are valued at lower of cost or net realizable value.
b) Stores and spares are valued at cost.
c) Finished goods are valued at cost or net realizable value whichever
is lower,
d) Scraps are valued at net realizable value.
1.11 Provision for Current and Deferred Tax
Provision for Current Tax is made on the basis of estimated laxacle
income for the year after taking into consideration all benefits
admissible under the provisions of the Income Tax Act. 1961 including
MAT Credit.
Deferred tax results from Timing Difference between Book Profit and
Taxable Profit is accounted for using tax rates and laws that have been
enacted / or substantial annexed as on the balance sheet date (Rs. In
Lac):
The Deferred Tax Assets for the year Rs. 5.92 Lac (Liability Rs. 1 20
Lac) is charged to profit and loss account.
1.12 investments
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 in the opinion o, the Management.
1.13 Excise Duty Treatment
(a) Gross Turnover / Purchases are inclusive of Excise Duty Levied. The
excise duty paid net of CENVAT claimed is accounted separately and
reduced from Gross Turnover
(b) Unutilized balance of CENVAT Claimable at the year end has been
accounted and disclosed separately under "Other Current Assets" and the
CENVAT component at the year end inventories has been adjusted
accordingly.
1.14 Leases
Land subject to operating leases is included under Fixed Assets. Rem
(Lease) payment is recognized in the profit & loss account on a payment
basis over the lease term.
1.15 Earnings Per Share
The company reports Basic and Diluted Earnings per Share (EPS) in
accordance with Accounting Standards - 20 on Earnings per Share.
Basic Earnings per share are calculated, by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Diluted
Earnings per share.reftect the potential dilution that could occur if
contracts to issue equity shares were exercised or converted during the
period. Diluted earnings per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period, except where the results are
anti-dilutive.
1.16 All contingent liabilities are aisclosed byway of notes to the
accounts.