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Accounting Policies of KIC Metaliks Ltd. Company

Mar 31, 2015

A) BASIS OF ACCOUNTING

Te financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. Te accounting policies are in accordance with the generally accepted accounting principles in India, with the accounting standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013.

Te preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known/materialized.

b) FIXED ASSETS AND DEPRECIATION/AMORTIZATION

i] Fixed Assets are stated at cost less net of recoverable taxes, and subsequent improvements thereto including non recoverable taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

ii] Depreciation on Fixed Assets has been provided on straight line basis over their estimated useful life as specified in the Schedule II of the Companies Act, 2013. Leasehold Assets are amortized over the period of lease. Intangible Assets are amortized over a period of five years.

c) CAPITAL WORK-IN-PROGRESS

Cost of the Fixed Assets that are not yet ready for their intended use at the Balance Sheet date together with all related expenditures are shown under capital Work-in-Progress.

d) 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. Sales are recognized on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of Sales Tax, VAT, Trade Discount, Rebates but include Excise Duty and Cess thereon.

e) INVENTORIES

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, comprises purchase price, freight and handling, non-refundable taxes and duties and other directly attributable costs. Finished products also include Excise Duty on product manufactured.

f) FOREIGN CURRENCY TRANSACTION

i) Initial recognition - Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of transaction.

ii) Conversion - Foreign Currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

iii) Exchange difference - Exchange difference arising on the settlement or conversion of monetary Current Assets and liabilities are recognized as income or as expenses in the year in which they arise.

g) BORROWING COST

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

h) TAXATION

Provision for tax is made for both Current and Deferred Taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax Assets and Liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

i) PRIOR PERIOD ADJUSTMENTS

Income and expenditure pertaining to prior period have been accounted under respective heads of Statement of Profit and Loss. However, net effect of such amount, where material is disclosed separately in Notes on Accounts.

j) IMPAIRMENT OF ASSETS

An asset is considered as impaired in accordance with Accounting Standard - 28 on Impairment of Assets, when at Balance Sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount, the reduction is recognized as an impairment loss in the statement of Profit and Loss.

k) EMPLOYEE BENEFITS

i) Employee benefits of short term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long term nature are recognized as expenses based on actuarial valuation.

iii) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income and/or expense.

l) EARNING PER SHARE

The Company reports Earning Per Share (EPS) in accordance with Accounting Standard - 20. Basic EPS is computed by dividing the Net Profit for the year by the weighted average number of Equity shares outstanding during the year. Diluted EPS is computed by dividing the Net Profit or Loss for the year by the weighted average number of Equity shares outstanding during the year as adjusted for the effects of all dilutive potential Equity shares, except where the results are anti dilutive.

m) CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statements and presents the Cash Flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

n) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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 the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

A) BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are in accordance with the generally accepted accounting principles in India, the Accounting Standards notified under the companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

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

b) FIXED ASSETS AND DEPRECIATION/AMORTIZATION

i] Fixed assets are stated at cost less net of recoverable taxes, and subsequent improvements thereto including non recoverable taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

ii] Depreciation on fixed assets has been provided on straight line method at rates which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956. Provision for depreciation on Blast Furnace Plant as a whole has been computed at the rates prescribed for Continuous Process Plant as per Schedule XIV of the Companies Act, 1956. Leasehold Assets are amortized over the period of lease. Intangible Assets are amortized over a period of five years.

c) CAPITAL WORK-IN-PROGRESS

Cost of the Fixed Assets that are not yet ready for their intended use at the Balance Sheet date together with all related expenditures are shown under Capital Work-in-Progress.

d) 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. Sales are recognized on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of Sales tax, VAT, Trade Discount, Rebates but include Excise Duty and Cess thereon.

e) INVENTORIES

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, includes the cost of material (net of recoverable taxes), labours and factory overheads. Finished products also include Excise Duty on product manufactured.

f) FOREIGN CURRENCY TRANSACTION

i) Initial recognition – Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of transaction.

ii) Conversion – Foreign Currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

iii) Exchange difference – Exchange difference arising on the settlement or conversion of monetary current assets and liabilities are recognized as income or as expenses in the year in which they arise.

g) BORROWING COST

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

h) TAXATION

Provision for tax is made for both Current and Deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

i) PRIOR PERIOD ADJUSTMENTS

Income and expenditure pertaining to prior period have been accounted under respective heads of Statement of Profit and Loss. However, net effect of such amount, where material is disclosed separately in Notes on Accounts.

j) IMPAIRMENT OF ASSETS

An asset is considered as impaired in accordance with Accounting Standard -28 on Impairment of Assets, when at Balance Sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount, the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

k) EMPLOYEE BENEFITS

i) Employee benefits of short term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long term nature are recognized as expenses based on actuarial valuation.

iii) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income and/ or expense.

l) EARNING PER SHARE

The Company reports Earning Per Share (EPS) in accordance with Accounting Standard-20. Basic EPS is computed by dividing the Net Profit for the year by the weighted average number of Equity Shares outstanding during the year. Diluted EPS is computed by dividing the Net Profit or Loss for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all dilutive potential Equity Shares, except where the results are anti dilutive.

m) CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard-3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

n) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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 the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

Rights, Preferences and Restrictions attached to Shares

a) The Equity shares of the Company have par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. All these Equity Shares have same right with respect to payment of dividend, repayment of capital and voting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of preferential amounts, in proportion to their shareholding.

b) The Company has 7% Redeemable Non-Cumulative Preference Shares having a nominal value of Rs. 10 per share. The Preference Shareholders shall have the right to vote on any resolution of the Company directly affecting their rights. The Preference shares would be redeemable within nineteenth year from the date of allotment however, it may be redeemed at any time after five years from the date of allotment at the option of the Company, subject to approval from statutory bodies and financial institutions, if any. In the case of liquidation, the Preference shareholder will be preferred over the Equity shareholder for the distribution of remaining assets of the Company.

The Term loan from bank are repayable in 20 equal quarterly instalments of Rs. 275 Lakhs each commencing from June 2012. The rate of interest on Term loan from Banks varies from 14.45% to 14.95% and secured by way of first charge on entire fixed assets of the Company and second charge by way of hypothecation on the entire stocks of inventory, receivables, bills and other chargeable current assets of the Company (both present and future) and corporate guarantee of Promoter Company and personal guarantee of Promoter Director. Deferred payment liability are secured by way of hypothecation of respective assets, acquired on deferred payment credit basis.

There are no micro, small and medium class enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2014. The above information regarding micro, small and medium class enterprises has been determined to the extent such parties have been identified on the basis of available information with the Company.


Mar 31, 2013

A) Basis of Accounting

The financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

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

b) Fixed Assets and Depreciation/Amortisation

,] Fixed assets are stated at cost less CENVAT Credit on specific Fixed Assets and subsequent improvements thereto including non cenvatable taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

ii] Depreciation on fixed assets has been provided on straight line method at rates which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956. Provision for depreciation on Blast Furnace Plant as a whole has been computed at the rates prescribed for Continuous Process Plant as per Schedule XIV of the Companies Act, 1956. Leasehold Assets are amortized over the period of lease.

c) Capital Work-in-Progress

Cost of the Fixed Assets that are not yet ready for their intended use at the balance sheet date together with all related expenditures are shown under capital Work in Progress.

d) 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. Sales are recognized on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of Sales Tax, VAT, Trade Discount, Rebates but include Excise Duty.

e) Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, includes the cost of material (net of available CENVAT), labours and factory overheads. Finished products also include Excise Duty on product manufactured.

fj Foreign Currency Transaction

) Initial recognition - Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

ii) Conversion - Foreign Currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

iii) Exchange difference - Exchange difference arising on the settlement or conversion of monetary current assets and liabilities are recognized as income or as expenses in the year in which they arise.

g) Borrowing Cost

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

h) Taxation

Provision for tax is made for both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

i) Prior Period Adjustments

Income and expenditure pertaining to prior period have been accounted under respective heads of Statement of Profit & Loss. However, net effect of such amount, where material is disclosed separately in Notes on Accounts.

j) Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard -28 on Impairment of Assets, when at Balance Sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount the reduction is recognized as an impairment loss in the Statement Profit & Loss.

k) Employee Benefits

,) Employee benefits of short term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long term nature are recognized as expenses based on actuarial valuation.

iii) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Statement of Profit & Loss as income and expense.

I) Earning Per Share

The Company reports Earning Per Share (EPS) in accordance with Accounting Standard 20. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of Equity Shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti dilutive.

m) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

n) Treatment of Contingent Liabilities

Contingent liabilities if any are disclosed by way of Notes.


Mar 31, 2012

A) Basis of Accounting

The financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

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

b) Fixed Assets and Depreciation/Amortisation

i) Fixed Assets are stated at cost less Cenvat Credit on specific Fixed Assets and subsequent improvements thereto including non-cenvatable taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

ii) Software cost relating to acquisition of initial software cost and installation cost are capitalized in the year of purchase.

iii) The expenditure incurred on technical know-how and on technical services and related expenses are capitalized.

iv) Depreciation on fixed assets has been provided on straight line method at rates which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956. Provision for depreciation on Blast Furnace Plant as a whole has been computed at the rates prescribed for Continuous Process Plant as per Schedule XIV of the Companies Act, 1956. Leasehold Assets are amortized over the period of lease.

c) Capital Work-in-progress

Cost of the Fixed Assets that are not yet ready for their intended use at the balance sheet date together with all related expenditures are shown under capital Work-in-Progress.

d) 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. Sales are recognized on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of sales tax, VAT, trade discount, rebates but include excise duty.

e) Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, includes the cost of material (net of available Cenvat), labours and factory overheads. Finished products also include Excise Duty on product manufactured.

f) Foreign Currency Transaction

i) Initial recognition - Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

ii) Conversion - Foreign currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

iii) Exchange difference - Exchange difference arising on the settlement or conversion of monetary current assets and liabilities are recognized as income or as expenses in the year in which they arise.

g) Borrowing Cost

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

h) Taxation

Provision for tax is made for both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax Assets and Liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

i) Prior Period Adjustments

Income and Expenditure pertaining to prior period have been accounted under respective heads of Statement of Profit & Loss. However, net effect of such amount, where material is disclosed separately in Notes on Accounts.

j) Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard - 28 on Impairment of Assets, when at balance sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount the reduction is recognized as an impairment loss in the statement of profit and loss.

k) Employee Benefits

i) Employee benefits of short-term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long-term nature are recognized as expenses based on actuarial valuation.

iii) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Statement of Profit & Loss as income and expense.

l) Earnings Per Share

The Company reports Earnings Per Share (EPS) in accordance with Accounting Standard 20. Basic EPS is computed by dividing the net profit for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti dilutive.

m) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

n) Treatment of Contingent Liabilities

Contingent Liabilities if any are disclosed by way of Notes.

Rights, preferences and restrictions attached to shares :

a) The equity shares of the Company have par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. All these equity shares have same right with respect to payment of dividend, repayment of capital and voting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of preferential amounts, in proportion to their shareholding.

b) The preference shares would be redeemable at the end of twelfth year from the date of allotment but may be redeemed at any time after five years from the date of allotment at the option of the Company, subject to approval from statutory bodies and financial institutions, if any. The preference shares would carry a fixed non-cumulative dividend of 7% p.a.

The Term Loan from bank is repayable in 20 equal quarterly instalments of Rs. 275.00 Lakhs each commencing from June, 2012. The rate of interest on Term Loan from Banks varies from 14.25% to 15.25% and secured by way of first charge on entire Fixed assets of the Company and second charge by way of hypothecation on the entire stocks of inventory, receivables, bills and other chargeable current assets of the Company (both present and future) and Corporate guarantee of Promoter Company and Personal guarantee of Promoter Director. Deferred payment liability are secured by way of hpothecation of respective assets, acquired on deferred payment credit basis.

The working capital loans are secured by way of first charge by way of hypothecation of current assets of the Company comprising stock of raw materials, stock-in-process, finished goods, stores and book debts, both present and future and second charge on fixed assets of the Company and corporate guarantee of promoter company and personal guarantee of promoter director.

There are no Micro, Small and Medium Class Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. The above information regarding Micro, Small and Medium Class Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company.






Mar 31, 2011

1. Basis of Accounting

The financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

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

2. Fixed Assets and Depreciation

a) Fixed Assets are stated at cost less Convert Credit on specific Fixed Assets and subsequent improvements thereto including non convertible taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

b) Depreciation on fixed assets has been provided on straight line method at rates which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956. Provision for depreciation on Blast Furnace Plant as a whole has been computed at the rates prescribed for Continuous Process Plant as per Schedule XIV of the Companies Act, 1956. Leasehold Assets are amortized over the period of lease.

3. Capital Work-in-Progress

Cost of the Fixed Assets that are not yet ready for their intended use at the Balance Sheet date together with all related expenditures are shown under Capital Work-in-Progress.

4. 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. Sales are recognized on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of Sales Tax, VAT, Trade Discount, Rebates but include Excise Duty.

5. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, includes the cost of material (net of available Convert), labors and factory overheads. Finished products also include Excise Duty on product manufactured.

6. Foreign Currency Transaction

a) Initial recognition - Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Conversion - Foreign currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

c) Exchange difference - Exchange difference arising on the settlement or conversion of monetary current assets and liabilities are recognized as income or as expenses in the year in which they arise.

7. Borrowing Cost

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

8. Taxation

Provision for Tax is made for both Current and Deferred Taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax Assets and Liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

9. Prior Period Adjustments

Income and Expenditure pertaining to prior period have been accounted under respective heads of Profit and Loss Account. However, net effect of such amount, where material, is disclosed separately in Notes on Accounts.

10. Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard - 28 on Impairment of Assets, when at Balance Sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount. The reduction is recognized as an impairment loss in the Profit and Loss Account.

11. Employee Benefits

i) Employee benefits of short term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long term nature are recognized as expenses based on actuarial valuation.

iii) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Profit and Loss Account as income and expense.

12. Earnings Per Share

The Company reports Earning Per Share (EPS) in accordance with Accounting Standard - 20. Basic EPS is computed by dividing the Net Profit for the year by the weighted average number of Equity Share outstanding during the year. Diluted EPS is computed by dividing the Net Profit or Loss for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all dilutive potential Equity Shares, except where the results are anti dilutive.

13. Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company. Cash and Cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

14. Treatment Of Contingent Liabilities

Contingent Liabilities, if any, are disclosed by way of Notes.


Mar 31, 2010

1. Basis of Accounting

The financial statements have been prepared under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956, as adopted consistently by the Company.

The preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

2. Fixed Assets and Depreciation

a) Fixed Assets are stated at cost less Modvat Credit on specific Fixed Assets and subsequent improvements thereto including non modvatable taxes, duties, freight and other incidental expenses related to acquisition and installation are added to the cost of fixed assets.

b) Depreciation on fixed assets has been provided on straight line method at rates which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956. Provision for depreciation on Blast Furnace Plant as a whole has been compounded at the rates prescribed for Continuous Process Plant as per Schedule XIV of the Companies Act, 1956. Leasehold Assets are amortized over the period of lease.

3. Capital Work-in-Progress

Cost of the Fixed Assets that are not yet ready for their intended use at the balance sheet date together with all related expenditures are shown under Capital Work-in-Progress.

4. Revenue Recognition

Revenue is recognised to the extent that it is probable, that the economic benefits will flow to the Company and the revenue can be reliably measured. Sales are recognised on transfer of significant risk and rewards of ownership which generally coincide with the dispatch of the goods. Sales are stated at net of Sales Tax, VAT, Trade Discount, Rebates but include Excise Duty.

Export incentives rising out of export sales are accounted for in the year of receipts.

5. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is determined on the weighted average basis and where applicable, includes the cost of material (net of available Modvat), labours and factory overheads. Finished products also include Excise Duty on product manufactured.

6. Research and Developments

Revenue expenditure on Research and Developments is charged in the year in which it is incurred. Expenditure which results in creation of Assets is included in Fixed Assets and depreciation is provided on Assets as applicable.

7. Foreign Currency Transaction

a) Initial recognition - Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Conversion - Foreign currency monetary items are reported using the closing rate. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate on the date of transaction.

c) Exchange difference - Exchange difference arising on the settlement or conversion of monetary current assets and liabilities are recognised as income or as expenses in the year in which they arise.

8. Borrowing Cost

Borrowing Costs incurred in relation to the acquisition, construction of assets are capitalized as the part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which these are incurred.

9. Taxation

Provision for Tax is made for both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax Assets and Liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

10. Prior Period Adjustments

Income and Expenditure pertaining to prior period have been accounted under respective heads of Profit & Loss Account. However, net effect of such amount, where material, is disclosed separately in Notes on Accounts.

11. Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard - 28 on Impairment of Assets when at Balance Sheet date there are indications of impairment and the carrying amount exceeds its recoverable amount the reduction is recognized as an impairment loss in the Profits Loss Account.

12. Employee Benefits

i) Employee benefits of short term nature are recognized as expense as and when it accrues.

ii) Employee benefits of long term nature are recognized as expenses based on actuarial valuation.

ill) Post employment benefits in the nature of Defined Contribution Plans are recognized as expense as and when it accrues and that in the nature of Defined Benefit Plans are recognized as expenses based on actuarial valuation.

iv) Actuarial gains and losses are recognized immediately in the Profit & Loss Account as income and expense.

13. Earning Per Share

The Company reports Earning Per Share (EPS) in accordance with Accounting Standard - 20. Basic EPS is computed by dividing the Net Profit for the year by the weighted average number of Equity Shares outstanding during the year. Diluted EPS is computed by dividing the Net Profit or Loss for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all dilutive potential Equity Shares, except where the results are anti dilutive.

14. Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statement and presents the cash flows by operating, investing and financing activities of the Company. Cash and Cash Equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

15. Treatment of Contingent Liabilities

Contingent Liabilities if any are disclosed by way of Notes.

 
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