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Accounting Policies of Siddhartha Tubes Ltd. Company

Mar 31, 2015

(1) ACCOUNTING CONVENTION:

i. 1 The Financial Statements are prepared under the historical cost conventions, on accrual basis in accordance with the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 2013.

i. 2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the year in which the results are known / materialized.

(2) FIXED ASSETS: - The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the Fixed Assets of CRM Division except 6Hi CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on Borrowed Funds used for acquisition of Fixed Assets upto the date of Assets becoming ready for being put to use.

The 6HI CRM Mill is under commissioning and so far not put to use, hence no depreciation has been provided in the Books of Accounts.

i) DEPRECIATION:

(a) Depreciation is provided by the straight-line method based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following Assets where useful life is different than those prescribed in Schedule II are used; Also refer note no. 10.

(b) During the year, one of the production division of the Company viz, Continuous Galvanizing Line (CGL) has remained inoperative. Similarly, during the previous also, this line remained in-operational. Depreciation on this line has been provided at 10% of eligible depreciation, and excess depreciation provided in the previous year has been written back to P&L account.

(c) The useful life of Electrical Installation as per Companies Act, 2013 is 10 year; However its useful life as technically assessed is 20years, and depreciation provided in Company.s books is on this basis.

(3) INVENTORIES:

Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs incurred in bringing these to their present location & condition.

a) In case of Finished Goods, cost is determined adding material, labor and related factory overheads including Depreciation and Excise Duty.

b) Raw Material, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realizable value applying the First in / First out (FIFO) Method.

c) By products and Scrap are valued at estimated realizable value.

(4) INVESTMENTS:

Investments are valued at Cost. No provision for permanent diminishing value of any such Investment, (where the Investee Company has accumulated losses etc.) has been made.

(5) FOREIGN CURRENCY TRANSACTION:

a) Purchases and Sales in Foreign Currency are accounted at Exchange Rates prevailing on the date of transaction/ payment.

b) All outstanding Foreign Currency Receivables / Liabilities are translated at the Exchange Rate prevailing on the last day of accounting year.

c) All Exchange differences are dealt with in Profit and Loss Account.

(6) MODVAT /EXCISE DUTY:

a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the cost of such materials, Capital goods/Capital work in progress.

b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision made for goods lying in bonded warehouses.

(7) REVENUE RECOGNITION:

a) Revenue from the Sale of Goods is recognized upon passage of title to the customer which, generally, coincides with the delivery.

b) Sales include Excise Duty; Debit Notes realized from customers but excludes Rebates and Discounts.

c) Export Sales includes Deemed Exports of ' Nil (Previous Year ' Nil).

(8) TAXATION:

No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss in accordance with the provisions of the IT. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 JB of the Income Tax Act.

(9) RETIREMENT BENEFIT:

Retirement Benefits to Employees comprise of payments towards Gratuity, and Provident Funds under the approved schemes of the company. Annual Contribution to the Gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of Employees is provided on accrual basis and in accordance, with the rules of the Company.

(10) BORROWING COST:

Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During the year the Company has not made Interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

(11) BALANCE CONFIRMATION:

The closing balances in respect of Receivables / Payables are subject to confirmation and consequential adjustment if any.

(12) SECURITY DEPOSITS:

Security Deposits are stated at Cost and Interest accrued thereon is shown separately in Balance Sheet under the head Interest Accrued.

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of Assets, net of residual value, where the remaining useful life of the Asset was determined to be nil as on April 1, 2014 and has adjusted an amount of Rs.17.42 lacs under Reserves and Surplus.

Notes :(i) Under various restructuring schemes sanctioned by the Secured Lenders, certain Interest dues are to be converted into Equity Shares / 9% Compulsorily Convertible Cumulative Redeemable Preference Shares (9%CCCRPS) / 8.85% Yield to Maturity Cumulative Redeemable Preference Shares (8.85% YTMCRPS). Pending allotment, these dues are classified under Share Application Money.

(ii) The Company has over the past few years, reached 'Negotiated Settlement of Dues' (NSD) with its lenders, whereby, interlaid, their interest dues (pending conversion as per note(*)) have been / will stand waived in full on repayment of the respective NSD amounts. The aforementioned outstanding amounts will also stand similarly waived as and when the respective NSD amounts (as may be agreed) stand repaid by the Company.

1) Term Loans from Financial Institutions / Banks are secured by way of first (i) Mortgage of all Immoveable Properties and hypothecation of all the Company's movables (save and except book debts and stocks) including movable Machinery, Spares and Tools both present and future ranking pari-passu inter-se subject to prior charge created/ to be created in favor of the Banks on specified movable assets for securing Borrowings for Working Capital requirements and (ii) Personal Guarantee of the Managing Director.

2) Secured Loans from ACRE represent Term Loans & Working Capital facilities acquired by them from SBI and Dena Bank (Both facilities shown separately). A settlement has been concluded between the Company and ACRE, whereupon both these facilities are clubbed together and made jointly payable as per an agreed schedule. Therefore, the Working Capital facilities acquired by ACRE, being also now repayable over an agreed term, have lost the character of Demand Cash Credit attributed to W.Capital facilities, and hence these are also included under "Long Term Borrowings".

3) Working Capital facilities acquired through assignment by ACRE are secured by Hypothecation of Company's entire Stock of Raw Materials, Stock-in-process, Finished goods, Stores & Spares, Stock in transit, other Current Assets and Second Charge over entire Fixed Assets of the Company ranking pari-passu inter-se and personal Guarantee of the Managing Director.

Notes: (*)Miscellaneous Fixed Assets- Work Shop, Lab, Fire Fighting, Equipments, Weigh Bridge, Drawing Equipment, Water, Air, Fuel Line & Packing Equipments.

Pursuant to Companies Act 2013 (the Act), becoming effective from 1 April 2014, the Company has re-worked depreciation with reference the the estimated useful lives of Fixed Assets prescribed under Schedule II to the Act or useful life of Fixed Assets as per technical evaluation.

During the year, one of the production division of the Company viz, Continuous Galvanising Line (CGL) has remained inoperative. Similarly, during the previous also, this line remained in operational. Depreciation on this line has been provided at 10% of eligible depreciation, and excess depreciation provided in the previous year has been written back to P&L account.

The depreciation provided is hence lower by Rs.5,01,74,588/- in the current year, and a sum of Rs. 5,80,16,065/- has been written back for the previous year.

Note : (8.1) Current maturities of Long Term debts comprise of Installments payable to ACRE during the next 12 months as per NSD terms settled with them. In view of the NSD terms being withdrawn by ACRE in FY-15,and fresh terms not getting renegotiated as yet, no classification under "Current Maturities" has been made in the current year.

Note: (**) The Company has concluded negotiated settlement dues with several lenders, and several installments have been paid to them till end March 2015. However, further installments remain payable as per the agreed schedule, and these lenders remain outstanding on the Company's Books. The said payment made up to 31/03/2015, viz Rs. 28.89 crore (Previous year Rs.25.97 crore) has been accounted for under Other Non Current Assets, and these will be adjusted / accounted for against the corresponding outstanding in Secured Loans after full repayment of the NSD amount, and receipt of No Dues Certificate from the respective Lender.


Mar 31, 2014

(1) ACCOUNTING CONVENTION:

1 The financial statements are prepared under the historical cost conventions, on accrual basis in accordance with the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 1956.

2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognised in the year in which the results are known / materialized.

(2) FIXED ASSETS: - The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the fixed assets of CRM Division except 6Hi CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on borrowed Funds used for acquisition of Fixed Assets upto the date of Assets becoming ready for being put to use.

The 6HI CRM Mill is under commissioning and so far not put to use, hence no depreciation has been provided in the books of accounts, i) DEPRECIATION:

(a) Depreciation is provided by the straight-line method at rates and in the manner stipulated in Schedule XIV of the Companies Act 1956. Also refer note no. 10.

(b) The amount incurred on Staff Holiday resorts has been amortized / depreciated over a period of ten years. The Book value stands reduced to NIL w.e.f. 31/03/2011.

(3) INVENTORIES:

Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs incurred in bringing these to their present location & condition.

a) In case of Finished Goods, cost is determined adding material, labour and related factory overheads including depreciation and excise duty.

b) Raw Material, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realisable value applying the First in / First out (FIFO) Method.

c) By products and Scrap are valued at estimated realizable value.

(4) INVESTMENTS:

Long term Investments are valued at Cost. There are no Current Investments. No provision for permanent diminishing value of any such investment, (where the Investee Company has accumulated losses etc.) has been made.

(5) FOREIGN CURRENCY TRANSACTION:

a) Purchases and sales in Foreign Currency are accounted at exchange rates prevailing on the date of transaction/ payment.

b) All outstanding Foreign Currency receivables / Liabilities are translated at the exchange rate prevailing on the last day of accounting year.

c) All exchange differences are dealt with in Profit and Loss Account.

(6) MODVAT /EXCISE DUTY:

a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the cost of such materials, Capital goods/Capital work in progress.

b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision

made for goods lying in bonded warehouses. ''

(7) REVENUE RECOGNITION:

a) Revenue from the sales of goods is recognised upon passage of title to the customer which, generally, coincides with the delivery.

b) Sales include Excise Duty; Debit Notes realised from customers but excludes rebates and discounts.

c) Export Sales includes Deemed Exports of '' Nil (Previous Year '' Nil).

(8) TAXATION: ''

No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss in accordance with the provisions of the I.T. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 IB of the Income Tax Act.

(9) RETIREMENT BENEFIT:

Retirement Benefits to employees comprise of payments towards gratuity, and provident funds under the approved schemes of the company. Annual Contribution to the gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of employees is provided on accrual basis and in accordance, with the rules of the Company.

(10) BORROWING COST:

Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During the year the Company has not made interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

(11) BALANCE CONFIRMATION:

The closing balances in respect of receivables / payables are subject to confirmation and consequential adjustment if any.

(12) SECURITY DEPOSITS:

Security Deposits are stated at Cost and interest accrued thereon is shown separately in Balance Sheet under the head interest accrued.


Mar 31, 2013

(1) ACCOUNTING CONVENTION:

1 The financial statements are prepared under the historical cost conventions, on accrual basis in accordance with the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 1956.

2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the year in which the results are known / materialized.

(2) FIXED ASSETS: - The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the fixed assets of CRM Division except 6Hi CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on borrowed Funds used for acquisition of Fixed Assets up to the date of Assets becoming ready for being put to use.

The 6HI CRM Mill is under commissioning and so far not put to use, hence no depreciation has been provided in the books of accounts,

i) DEPRECIATION:

(a) Depreciation is provided by the straight-line method at rates and in the manner stipulated in schedule XIV of the Companies Act 1956. Also refer note no. 10.

(b) The amount incurred on Staff Holiday resorts has been amortized / depreciated over a period of ten years. The Book value stands reduced to NIL w.e.f. 31/03/2011.

(3) INVENTORIES:

Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs incurred in bringing these to their present location & condition.

a) In case of Finished Goods, cost is determined adding material, labour and related factory overheads including depreciation and excise duty.

b) Raw Materials, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realisable value applying the First in / First out (FIFO) Method.

c) By products and Scrap are valued at estimated realizable value.

(4) INVESTMENTS:

Long term Investments are valued at Cost. There are no Current Investments. No provision for permanent diminishing value of any such investment, (where the Investee Company has accumulated losses etc.) has been made.

(5) FOREIGN CURRENCY TRANSACTIONS :

a) Purchases and sales in Foreign Currency are accounted at exchange rates prevailing on the date of transaction/ payment.

b) All outstanding Foreign Currency receivables / Liabilities are translated at the exchange rate prevailing on the last day of accounting year.

c) All exchange differences are dealt with in Profit and Loss Account.

(6) MODVAT /EXCISE DUTY:

a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the cost of such materials, Capital goods/Capital work in progress.

b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision made for goods lying in bonded warehouses.

(7) REVENUE RECOGNITION:

a) Revenue from the sales of goods is recognized upon passage of title to the customer which, generally, coincides with the delivery.

b) Sales include Excise Duty; Debit Notes realized from customers but excludes rebates and discounts.

c) Export Sales includes Deemed Exports of Rs. Nil (Previous Year Rs. Nil).

(8) TAXATION:

No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss in accordance with the provisions of the I.T. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 JB of the Income Tax Act.

(9) RETIREMENT BENEFIT:

Retirement Benefits to employees comprise of payments towards gratuity, and provident funds under the approved schemes of the company. Annual Contribution to the gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of employees is provided on accrual basis and in accordance, with the rules of the Company. .

(10) BORROWING COST:

Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During the year the Company has not made interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

(11) BALANCE CONFIRMATION:

The closing balances in respect of receivables / payables are subject to confirmation and consequential adjustment if any.

(12) SECURITY DEPOSITS:

Security Deposits are stated at Cost and interest accrued thereon is shown separately in Balance Sheet under the head interest accrued.


Mar 31, 2011

(1) ACCOUNTING CONVENTION:

i) 1 The financial statements are prepared under the historical cost conventions, on accrual basis in accordance with the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 1956.

i) 2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the year in which the results are known / materialized.

ii) FIXED ASSETS: -

The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the fixed assets of CRM Division except 6Hi CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on borrowed Funds used for acquisition of Fixed Assets up to the date of Assets becoming ready for being put to use.

The 6HI CRM Mill is under commissioning and so far not put to use. Hence no depreciation has been provided in the books of accounts.

iii) DEPRECIATION :

(a) Depreciation is provided by the straight-line method at rates and in the manner stipulated in schedule XIV of the Companies Act 1956. Also refer Schedule no. 6.

(b) The amount incurred on Staff Holiday resorts has been amortized / depreciated over a period of ten years. The Book Value stands reduced to Nil as at 31/03/2011.

iv) INVENTORIES :

Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs incurred in bringing these to their present location & condition.

a) In case of Finished Goods, cost is determined adding material, labour and related factory overheads including depreciation and excise duty.

b) Raw Material, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realizable value applying the First in / First out (FIFO) Method.

c) Byproducts and Scrap are valued at estimated realizable value.

v) INVESTMENTS:

Long term Investments are valued at Cost. There are no Current Investments. No provision for permanent diminishing value of any such investment, (where the Investee Company has accumulated losses etc.) has been made.

vi) FOREIGN CURRENCY TRANSACTION :

a) Purchases and sales in Foreign Currency are accounted at exchange rates prevailing on the date of transaction/payment.

b) All outstanding Foreign Currency receivables / Liabilities are translated at the exchange rate prevailing on the last day of accounting year.

c) All exchange differences are dealt with in Profit and Loss Account. vii) MODVAT /EXCISE DUTY :

a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the cost of such materials, Capital goods/Capital work in progress.

b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision made for goods lying in bonded warehouses.

vii) REVENUE RECOGNITION :

a) Revenue from the sale of goods is recognized upon passage of title to the customer which, generally, coincides with the delivery.

b) Sales include Excise Duty; Debit Notes realized from customers but excludes rebates and discounts.

c) Export Sales includes Deemed Exports of Rs. Nil (Previous Year Rs. Nil).

viii) TAXATION :

No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss in accordance with the provisions of the I.T. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 JB of the Income Tax Act.

ix) RETIREMENT BENEFIT:

Retirement Benefits to employees comprise of payments towards gratuity and provident funds under the approved schemes of the Company. Annual Contribution to the gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of employees is provided on accrual basis and in accordance with the rules of the Company.

x) BORROWING COST:

Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During the year the Company has not made interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

xi) BALANCE CONFIRMATION:

The closing balances in respect of receivables / payables are subject to confirmation and consequential adjustment if any.

xii) SECURITY DEPOSITS:

Security Deposits are stated at cost and interest accrued thereon is shown separately in Balance Sheet under the head interest accrued.

xiii) DEFERRED TAXATION :

As per the provisions of Accounting Standard - 22 issued by the Institute of Chartered Accountants of India, during the year the Company has not recognized any additional deferred tax assets in view of the uncertainty attached to the reliability of the same; which has been caused due to heavy losses incurred by the Company.

(xiv) SEGMENT REPORTING:

Segmentation has been determined based on activity and product of the Company i.e. Steel Pipes and Tubes and GP/ GC / CR Coil / Sheets. (1) Segment accounting policies.

Segment accounting policies are generally in line with the accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting:

(a) Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.

(b) Expenses that are directly identifiable with / allocable to segments are considered for determining the segment results. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Other Unallowable expenditure".

(c) Income which relates to the Company as a whole and not allocable to segments is included in "Unallowable other Income".

(d) Segment assets and liabilities include those directly identifiable with the respective segments.

Consolidated Segment information for the year ended March 31, 2011. Information about Primary Business Segments:


Mar 31, 2010

I. 1 The financial statements are prepared under the historical cost conventions, on accrual basis In accordance with the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 1956.

I. 2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognised in the year in which the results are known / materialized.

II) FIXED ASSETS: - The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the fixed assets of CRM Division except 6HI CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on borrowed Funds used for acquisition of Fixed Assets upto the date of Assets becoming ready for being put to use.

The 6HI CR Mill is under commissioning and so far not put to use. Hence no depreciation has been provided in the books of accounts.

III) DEPRECIATION :

(a) Depreciation is provided by the straight-line method at rates and in the manner stipulated in schedule XIV of the Companies Act 1956. Also refer schedule no. 6.

(b) The amount incurred on Staff Holiday resorts will be amortized / depreciated over a period of ten years. This Is the tenth year of amortization.

iv) INVENTORIES :

Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs incurred in bringing these to their present location & condition.

a) In case of Finished Goods, cost is determined adding material, labour and related factory overheads including depreciation and excise duty.

b) Raw Material, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realisable value applying the First in / First out (FIFO) Method.

c) Byproducts and Scrap are valued at estimated realizable value.

v) INVESTMENTS:

Long term Investments are valued at Cost. There are no Current Investments. No provision for permanent diminishing value of any such investment, (where the Investee Company has accumulated losses etc.) has been made.

vi) FOREIGN CURRENCY TRANSACTION :

a) Purchases and sales In Foreign Currency are accounted at exchange rates prevailing on the date of transaction/payment.

b) All outstanding Foreign Currency receivables / Liabilities are translated at the exchange rate prevailing on the last day of accounting year.

c) All exchange differences are dealt with in Profit and Loss Account.

vii) MODVAT /EXCISE DUTY :

a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the cost of such materials, Capital goods/Capital work in progress.

b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision made for goods lying in bonded warehouses.

viii) REVENUE RECOGNITION :

a) Revenue from the sale of goods is recognised upon passage of title to the customer which, generally, coincides with the delivery.

b) Sales include Excise Duty; Debit Notes realised from customers but excludes rebates and discounts.

c) Export Sales includes Deemed Exports of Rs. Nil (Previous Year Rs. Nil).

ix) TAXATION :

No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss in accordance with the provisions of the I.T. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 JB of the Income Tax Act.

x) RETIREMENT BENEFIT:

Retirement Benefits to employees comprise of payments towards gratuity and provident funds under the approved schemes of the Company. Annual Contribution to the gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of employees is provided on accrual basis and In accordance with the rules of the Company.

xi) BORROWING COST:

Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During the year the Company has not made interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

xii) BALANCE CONFIRMATION:

The closing balances in respect of receivables / payables are subject to confirmation and consequential adjustment if any.

xiii) SECURITY DEPOSITS:

Security Deposits are stated at Cost and interest accrued thereon Is shown separately in Balance Sheet under the head interest accrued.

xiv) RELATED PARTIES DISCLOSURES:

(1) KEY MANAGEMENT PERSONNEL:

MR. NAINESH J.SANGHVI - Chairman Cum Managing Director

MR. RAJENDRA PRASAD GUPTA - Jt. Managing Director

MR. K.R. MURTHY - Wholetime Director (Technical)

MR. K.C. SHARMA - Vice President (Marketing)

xv) DEFERRED TAXATION :

As per the provisions of Accounting Standard - 22 issued by the Institute of Chartered Accountants of India, during the year the Company has not recognized any additional deferred tax assets in view of the uncertainty attached to the realisability of the same; which has been caused due to heavy losses incurred by the Company during the year.

(xvii) SEGMENT REPORTING:

Segmentation has been determined based on activity and product of the Company i.e. Steel Pipes and Tubes and GP/ GC / CR Coil / Sheets.

Segment accounting policies.

Segment accounting policies are generally in line with the accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting:

(a) Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.

(b) Expenses that are directly identifiable with / allocable to segments are considered for determining the segment results. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Other Unallocable expenditure".

(c) Income which relates to the Company as a whole and not allocable to segments is included in "Unallocable other Income".

(d) Segment assets and liabilities include those directly identifiable with the respective segments.

Consolidated Segment information for the year ended March 31, 2010. Information about Primary Business Segments:

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