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Accounting Policies of Mukesh Steels Ltd. Company

Mar 31, 2014

A) Basis of Preparation of financial statements.

The accounts are prepared on accrual basis under the historical cost convention in accordance with the applicable accounting standards section 211 and other applicable referred to in sub-section (3C) and other applicable provisions of the Companies Act, 1956.

b) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles,

* require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results materialize.

c) Revenue Recognition

i) Sales:

Revenue from sale of goods is recognized:

a) When all the significant risks and rewards of ownership transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and

b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Interest: Revenue from interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

iii) Dividend Dividend is recognized when the company''s right to receive the payment is established.

d) Fixed Assets

i) All Fixed Assets are stated at historical cost less accumulated depreciation except Land and Building of Rolling Division which are stated at revalued amount.

ii) Cost of fixed assets comprises its purchase price and any attributable expenditure (both direct and indirect) for bringing an asset to its working condition for its intended use

e) Depreciation

i) Depreciation is provided on straight line method on all the assets of the company except Furniture and fixture and Vehicles of Rolling Division on which depreciation is provided on written down value method.

ii) In respect of fixed assets acquired after 30th June 1987,depreciation for the year is provided in accordance with and in he manner specified in schedule XIV to the Companies Act, 1956.

iii) in respect of Assets acquired prior to 30th June 87, Depreciation is provided at the rates corresponding to the rates provided under Income Tax rules in force at the time of acquisition.

iv) Depreciation on assets costing Rs.5000/- or less acquired during the period Is charged at 100%

f) Amortization:

Intangible assets are amortized on straight line method over their estimated useful life.

g) Investments

Long term Investments are carried at cost less provisions, if any, for decline in value which Is other than temporary. Current investments are carried at lower of cost and fair value.

h) Intangible assets

Intangible assets are stated at historical cost less accumulated amount of amortization.

i) Inventories

Inventories are valued at cost or net realisable value whichever is lower. The cost in respect of the following items of inventory are computed as under:

* Raw material : At FIFO basis plus direct expenses.

* Stores and spares : At FIFO basis plus direct expenses.

* Finished goods : At Raw Material cost plus Conversion Cost

j) Borrowing Costs

Borrowing cost that are directly attributable to the Acquisition, construction or production of a qualifying asset are capitalized as a part of the cost of asset. Other Borrowing costs are recognized as an expense in the period in which they are incurred.

k) Foreign Currency Transactions

Transactions in foreign currency are recorded on initial recognition 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 except in case of import of raw material which are recorded at the rate at the date of payment which approximate the actual rate. Exchange Difference arising on the settlement of monetary items or on reporting the monetary items at the rate different from those at which they are initially recorded are recognized as income or expense in the period in which they arise.

I) Employee Benefits:

(1) Short Term Employee Benefits:

Short term employee benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss for the year in which the related service is rendered.

(ii) Post Employment Benefits:

(a) Defined Contribution Plan:

Provident Fund:

Contribution to provident fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the Statement of Profit and Loss

(b) Defined Benefit Plan:

Gratuity:

The Employees Gratuity Fund Scheme, managed by Life Insurance Corporation of India, is a defined benefit plan. The liability for gratuity is provided on of actuarial basis. The Present value of the company''s obligation is determined on the basis of actuarial valuation at the year end and the fair value of plan assets is reduced from the gross obligations under the gratuity scheme to recognize the obligation on a net basis.

m) Accounting For Taxes on Income

Provision for taxation for the year comprises of current tax and deferred tax Current tax is amount of Income- tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

n) Earning Per Share:-

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

o) Impairment of Assets:-

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

p) Provisions and Contingent Liabilities

(i) Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when:

(a) the company has a present obligation as a result of a past event;

(b) a probable outflow of resources expected economic benefits is required to settle the obligation ; and

(c) the amount of the obligation can be reliably estimated

(ii) Contingent liability is disclosed in case there is:

a) (i) a possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or

(ii) a reliable estimate of the amount of the obligation cannot be made

b) present obligation that arises from past events but is not recognized -

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

q) Operating Lease:

The assets acquired on lease wherein a significant portion of risks and rewards of ownership of an asset is retained by the lessor are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the terms of lease.

r) Cash Flow Statement:

The Cash Flow Statement has been made in accordance with the Accounting Standard (AS) - 3 on "Cash Flow Statements" issued by the Companies (Accounting Standards) Rules, 2006.

s) Segment Information:

The segment information is prepared in conformity with the accounting policies adopted for the preparing and presenting the financial statements of the enterprise as a whole.


Mar 31, 2010

A) Accounting Convention

The accounts are prepared on accrual basis under the historical cost convention in accordance with the applicable accounting standards referred to in sub-section (3C) of section 211 and other applicable provisions of the Companies Act, 1956.

b) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results mature.

c) Revenue Recognition i) Sales:

Revenue from sale of goods is recognized:

a) When all the significant risks and rewards of ownership transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership; and

b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods

ii) Interest:

Income from intrest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Fixed Assets

All Fixed Assets are stated at historical cost less accumulated depreciation except Land and Building of. Rolling Division which are stated at revalued amount.

e) Depreciation

i) Depreciation is provided on straight line method on all the assets of the company except Furniture and fixture and Vehicles of Rolling Division on which depreciation is provided on written down value method

ii) In respect of Fixed Assets acquired after 30th June 1987,depreciation for the year is provided in accordance with and in he manner specified in schedule XIV to the Companies Act, 1956.

iii) In respect of Assets acquired prior to 30th June 87, Depreciation is provided at the rates corresponding to the rates provided under Income Tax rules in force at the time of acquisition.

iv) Depreciation on assets costing Rs.5000/- or less acquired during the period is charged at 100%.

f) Amortisation: Intangible assets are amortised on straight line method over their estimated useful life.

g) investments

Long term Investments are carried at cost less provisions, If any, for decline in value which is other than temporary. Current investment are carried at lower of cost and fair value.

h) Intangible assets

Intangible assets are stated at historical cost less accumulated amount of Amortization.

i) Inventories

Inventories are valued at cost or net realisable value whichever is lower. The cost in respect of

the following items of inventory are computed as under:

-Raw material :At FIFO basis plus direct expenses.

-Stores and spares :At FIFO basis plus direct expenses.

-Finished goods :At Raw Material cost plus Conversion



j) Borrowing Costs

Borrowing cost that are directly attributable to the Acquisition, construction or production of a qualifying asset are capitalised as a part of the cost of asset. Other Borrowing costs are recognised as an expense in the period in which they are incurred.

k) Foreign Currency Transactions

Foreign Currency transactions are recorded at exchange rate prevalent at the time of payment, which approximates the rate at the date of transaction. Monetary items denominated in foreign currency are reported using the closing rate. Exchange difference arising on the settlement of monetary items or on reporting the monetary items at rate & different form those at which they are initially recorded are recognised as income or expense in the period in which they arise.

I) Employee Benefits :

- Short Term Employee Benefits:

Short Term Employee Benefits are recognised as an expense on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

- Post Employment Benefits:

DEFINED CONTRIBUTION PLANS :

PROVIDEND FUND :

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the Profit and Loss Account.

DEFINED BENEFIT PLANS :

Gratuity :

Provision for Gratuity Liability to Employees is made on the basis of Actuarial Valuation as at the close of the year.

The acturiai gain or loss is recognized in the statement of profit and loss account.

m) ACCOUNTING FOR TAXES ON INCOME

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

n) EARNING PER SHARE:-

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the Period.

o) IMPAIRMENT OF ASSETS:-

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists , an impairment loss i.e the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

p) PROVISIONS AND CONTINGENT LIABILITIES

(i) Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when:

(a) the company has a present obligation as a result of a past event;

(b) a probable outflow of resources embodying economic benefits is required to settle the obligation ; and

(c) the amount of the obligation can be reliably estimated (ii) Contingent liability is disclosed in case of:

a) A possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or

b) a present obligation that arises from past events

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

q) LEASE

The assets acquired on lease where in a significant portion of risks and rewards of ownership of an asset is retained by the lessor are classified as operating leases.

Lease rentals paid for such leases are recognised as an expense on systematic basis over the terms of lease.


Mar 31, 2009

A) Accounting Convention

The accounts, are prepared on, accrual basis under the historical cost convention in accordance with the accounting standards referred to in subsection (30) of section 211 and relevant provisions of the Companies Act,1956.

b) Revenue Recognition Revenue from sale of goods recognized,

a) When all significants risk and rewards of ownership is transferred to the buyer and the company retains no effective control of goods tranfered to a degree usually associated with ownership,and

b) No significants uncertainty exsist regarding the amount of the consideration that will be derived from the sale of goods.

c) Income from interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

c) Fixed Assets

All Fixed Assets are stated at historical cost basis agreement and Building of Rolling Division which arc stated at revalued amount.

d) Depreciation

(i) Derareciation is provided on straight line method on all the assets of the company except Furniture and fixture,.and Vehicles of Rolling Division on which depreciatio.is provided on written down value method,

(ii) In respect of Fixed Assets acquired after 30th June 1337,depreciation for the year is provided in accordance with and in the mariner in schedule XTV to the Companies Act,1956.

(iii) In respect of Assets acquired prior to 30th June 87, Depreciation is provided at the rates corresponding to the rates provided under Income Tax rules in force at the time of acquisition.

(iv) Depreciation on assets costing Rs.5000/- or less acquired during the period is charged at 100%e) Amortisation: Intangible assets are amortised on straight line method over their estimated useful life.3

Investments

Long term Investments are carried at cost less provisions, If any, for decline in value which is other-than temporary.Current investment are carried at lower of cost and fair value.

f) Inventories

Inventories are valued at cost or net realisable value whichever is lower. The cost in respect of the following items of inventory are computed as under;

Raw material : At FIFO basis plus direct expenses. Stores and spares : At FIFO basis plus direct expenses, -Finished goods : At Raw Material cost plus Conversion ,

g) Borrowing Costs

Borrowing cost that are directly attributable to the Acquisition, construction on production of a qualifying asset are capitalised as a part of the cost of the asset;;. Other Borrowing costs are recognised as an expense in the period in which they ate incurred.

h) Foreign Currency Transaction

Foreign Currency transactions are recorded at exchange rate prevalent at the time of payment, which approximates the rate at the date of transaction. Monetary items. denominated in foreign currency are reported using the closing rate. Exchange difference arising on the settlement of monetary items or on reporting the monetary items at. rate & different form those at which they are initially recorded are recognised as income or expenses in the period in which they arise.

i) Employes Benefits :

Short Term Employee Benefits: Short Term Employee Benefits are recognised as an expenses on an undiscounted bas;.s in the profit and loss account of the year in which the related services is rendered.

Post Employment Benefits:

FINED CONTRIBUTION PLANS :

PROVIDEND FUND :

Contribution to Provident Fund is made in accordance with the provisions of the employees Provident Fund and Miscellaneous Provisions Act,. 1952 and is charged to the Profit and Loss Account.

DEFINED BENEFIT PLANS :

Gratuity : Provision for Gratuity Liability to Employees is made on the basis of. Actuarial Valuation as at the close of the year. The acturial gain or loss is recognised in the statement of profit and loss account.

j) ACCOUNTING for TAXES ON INCOME AND FRINCE BENEFIT TAX i -

Provision for taxation FOR the Period employees of currunt tax, defferred tax and fringe benefit tax. Current tax is The amount of Income tax determined to be payable in inspect of taxable income for the period. Deferred tax is the tax effect of timing difference between taxable income and accounting income for a period that originate in one period and is capable of reversal

g). one or more subsequent periods benefit tax is the amount of tax determined to be payable in respect of value of benefit provided or deemed to to have been providented to the employees.

h> EARNING PER SHARE : -

Basic earning per share is calculated, by dividing the net profit or 1033 for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the Period.

i> IMPAIRMENT OF ASSETS: -

At "eachbalance sheet date an assessment is made whether an1, indical AND exists that an asset has been impaired. If any such indication exists an impairements amount by which the carrying amount; of an assist exceeds its recoverable amount is providend in the books of account .

PROVISIONS AND CONTIGENT LIABILITIES : -

These are recognised for liabilitie. that can be measured by using substantial company has a present obligation as a result of a past event;

A probable outflow of resources is expected to sortie the obligation; and the amount of the obligation can be reliably estimated, management liability is disclosed in the case of :- Present obligation arising from a past event when it probable that an outflow of resources will be required to settle the obligation. possible obligatfon, unless the probability of outflow of responsible in the amount. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion & other relevant factors, such as supply &. demand in employment market.

The financial assumption considered for the calculations are as under: Discount Rate. : The discount rate has been chosen by reference to yield yield on Government bonds "as on date of valuation. Expected Rate of Return : in case of Gratuity, the actual retunr has been taken

 
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