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Accounting Policies of Tayo Rolls Ltd. Company

Mar 31, 2015

1) Basis for Accounting :

(a) The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) The Company has incurred net loss of Rs. 6,762.07 lakhs and cash losses during the year ended 31st March, 2015 and as of that date the accumulated losses of Rs. 24,774.37 lakhs has eroded more than fifty percent of its net worth. Company's current liabilities are more than its current assets by Rs. 7,702.74 lakhs. These financial statements have been prepared on a going concern basis based on a comfort letter received from one of its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company.

2) Cash Flow Statement :

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

3) Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

4) Inventories :

Finished and semi-finished products produced by the Company are carried at lower of cost and net realizable value. Raw materials purchased by the Company are carried at lower of cost and net realizable value. Raw material in transit is carried at cost by the Company.

Stores & Spare Parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items.

Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost. Value of inventories are generally ascertained on the "weighted average" basis.

5) Depreciation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of Plant & Machinery where the useful life of the assets has been assessed as under based on technical evaluation by a Chartered Engineer taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Useful life of Plant & Machinery is considered to be 15-20 years.

Intangible assets are amortised over their estimated useful life of five years on straight line method.

Premium paid on leasehold land and land development expenses are amortized over the period of lease.

The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.

During the year, the Company has revised its estimates of useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013. Carrying amount less residual value of the assets whose remaining useful life has become nil at the beginning of the period, has been adjusted with the opening balance of retained earnings. Consequent to the adoption of Schedule II as above, the loss for the year ended 31st March 2015 is lower by 695.33 lakhs (net of amount transferred to retained earnings). The opening retained earnings as at 1st April 2014 is lower by Rs. 43.95 lakhs.

6) Revenue Recognition :

i) Sale of Goods :

Revenue from the sale of goods is recognized in the statement of profit and loss when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Export Incentive under Duty Draw Back System

Export incentive under the Duty Draw Back System is recognized at the time of shipment.

iii) Dividend and Interest income

Dividend income is recognized when the company's right to receive dividend is established. Interest income is recognized on accrual basis based on interest rates implicit in the transactions.

7) Fixed Assets

All fixed assets are valued at cost less depreciation/amortization/impairment. The cost of an asset includes the purchase cost of materials, including import duties and non-refundable-taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Pre operation expenses including trial run expenses (net of revenue) are capitalized.

In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalized and depreciated over the period to the planned relining date.

8) Foreign Exchange Transactions :

Foreign Currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in profit and loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the statement of profit and loss over the period of the contract.

9) Investment :

Long term investments are carried at cost less provision for other than temporary diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value.

10) Cash and Bank Balances:

Cash and Bank Balances comprises of cash on hand and balances in current accounts and deposit accounts with banks having original maturity of less than three months.

11) Employees Benefits :

i) Short Term benefits :

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

ii) Post Employment benefit :

Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries.

Defined Benefit Plans :

Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognized. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gains and losses are recognized in statement of profit and loss in full in the year in which they occur.

12) Borrowing Costs :

Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the statement of profit and loss in the period in which they are incurred.

13) Earnings Per Share :

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

14) Taxes on Income :

Current Taxes:

Provision for Current tax is determined on the basis of taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable laws.

Deferred Taxes:

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

15) Research and Development :

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred.

16) Impairment:

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the statement of profit and loss.

The recoverable amount is the greater of the net selling price (less cost of disposal) and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

17) Provision, Contingent Liabilities and Contingent Assets :

i) Provision :

A provision is recognized in the financial statements where there exists a present obligation as a result of a past event, the amount of which is reliably estimable, and it is probable that an outflow of resources would be necessitated in order to settle the obligation

ii) Contingent Liabilities and Assets :

Contingent liability is a possible obligation that arises from past events and the 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 is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. Contingent Assets are neither recognised not disclosed.

18) Segment Reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organisation , management structure and the internal performance reporting systems. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocable asset/ liabilities".

*During the current period, pursuant to Section 13 (1) read with Section 55, 61,64 and other applicable provision of the Companies Act, 2013, the Company has increased its authorized share capital from Rs 2,00,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each and 8.50% Non-Cumulative 185,00,000 Preference Shares of Rs 100/- each to Rs 3,50,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each and 8.50% Non-Cumulative 3,35,00,000 Preference Shares of Rs 100/- each. The Shareholders approval of such increase was obtained at the Extra -ordinary General Meeting held on 12th May, 2014.

**In accordance with the approval of shareholders at the Extra-ordinary General meeting held on 12th May, 2014, 63,00,000. 8.50% Non -cumulative Redeemable Preference Shares were allotted on preferential basis to Tata Steel Limited, the promoters of the Company.


Mar 31, 2014

1) Basis for Accounting

(a) The financial statements are prepared under the historical cost convention on going concern, on accrual basis and are in compliance with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 (which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 2013 of the Ministry of Corporate Affairs). The financial statements are presented in accordance with Generally Accepted Accounting Principles in India, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) The Company has incurred net loss of Rs 7,504.44 lakhs and cash losses during the year ended 31st March, 2014 and as of that date the accumulated losses of Rs.17,968.35 lakhs has eroded more than fifty percent of its net worth. Company''s current liabilities are more than its current assets by Rs 5,192.91 lakhs. These financial statements have been prepared on a going concern basis based on a comfort letter received from one of its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company.

2) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

3) Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

4) Inventories

Finished and semi-finished products produced by the Company are carried at lower of cost and net realizable value. Raw materials purchased by the Company are carried at lower of cost and net realizable value. Raw material in transit is carried at cost by the Company.

Stores & Spare Parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items.

Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost. Value of inventories are generally ascertained on the "weighted average" basis.

5) Depreciation

Fixed assets are depreciated on a straight line basis applying the rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life whichever is higher. In respect of assets installed up to 31.3.1987, depreciation is provided at the rates in force time to time on straight line method. Intangible assets are amortized over a period of five years. Premium paid on leasehold land and land development expenses are amortized over the period of lease.

6) Revenue Recognition

i) Sale of Goods

Revenue from the sale of goods is recognized in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Export Incentive under Duty Draw Back System

Export incentive under the Duty Draw Back System is recognized at the time of shipment.

iii) Dividend and Interest income

Dividend income is recognized when the company''s right to receive dividend is established. Interest income is recognized on accrual basis based on interest rates implicit in the transactions.

7) Fixed Assets

All fixed assets are valued at cost less depreciation/amortization. The cost of an asset includes the purchase cost of materials, including import duties and non refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Pre-operation expenses including trial run expenses (net of revenue) are capitalized.

In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalized and depreciated over the period to the planned relining date.

8) Foreign Exchange Transactions

Foreign Currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in profit and loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the profit and loss account over the period of the contract.

9) Investment

Long term investments are carried at cost less provision for permanent diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value

10) Cash and Bank Balances:

Cash and Bank Balances comprises of cash on hand and balances in current accounts and deposit accounts with banks having original maturity of less than three months.

11) Employees Benefits

i) Short Term benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post Employment benefit Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries.

Defined Benefit Plans

Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognized. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gains and losses are recognized in Profit and Loss Account in full in the year in which they occur.

12) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the profit and loss account in the period in which they are incurred.

13) Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

14) Taxes on Income

Current Taxes

Provision for Current tax is determined on the basis of taxable income and tax credits computed in accordance with the provisions ofthe Income Tax Act, 1961.

Deferred Taxes

Deferred tax assets and liabilities are recognized by computing the tax effect on timing differences which arise during the year and reverse in the subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

15) Research and Development

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred.

16) Impairment

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on higher of discounted cash flows expected from use of such assets and net selling price (less cost of disposal) of such assets. If the assets are impaired, the company recognizes an impairment loss as the difference between the carrying value and value in use.

17) Provision, Contingent Liabilities and Contingent Assets

i) Provision

A provision is recognized in the financial statements where there exists a present obligation as a result of a past event, the amount of which is reliably estimable, and it is probable that an outflow of resources would be necessitated in order to settle the obligation

ii) Contingent Liabilities and Asset

Contingent liability is a possible obligation that arises from past events and the 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 is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. Contingent Assets are neither recognised not disclosed.

18) Segment Reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organisation, management structure and the internal performance reporting systems. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of the their relationship to the operating activities of the segment. Assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocable asset/liabilities"

*During the current period, pursuant to Section 16(1) and Section 94(2) of the Companies Act, 1956, the Company has increased its authorized share capital from Rs 1,000,000,000 divided into 15,000,000 Equity Shares of Rs 10/- each and 8.5% Non-Cumulative 8,500,000 Preference Shares of Rs 100/- each to Rs 2,000,000,000 divided into 15,000,000 Equity Shares of Rs 10/- each and 8.50% Non-Cumulative 185,00,000 Preference Shares of Rs 100/- each. The Shareholders approval of such increase was obtained by way of an ordinary resolution in the Annual General Meeting of the Company held on 14th June, 2013.

**During the year, 8,700,000 Preference Shares were allotted to Tata Steel Limited, Indian Promoters of the Company, under the provisions of Section 81(1A), 85 and 86 of the Companies Act, 1956. The Shareholders approval of such increase was obtained by way of an ordinary resolution in the Annual General Meeting of the Company held on 14th June, 2013.


Mar 31, 2013

1) Basis for Accounting

a) The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) The Company has incurred net loss of Rs 3,373.84 lakhs and cash losses during the year ended 31st March, 2013 and as of that date the accumulated losses of Rs.10, 463.91 lakhs has eroded more than fifty percent of its net worth. Company''s current liabilities are more than its current assets by Rs 7,509.92 lakhs. These financial statements have been prepared on a going concern basis based on a comfort letter received from one of its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company.

2) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

3) Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

4) Inventories

Finished and semi-finished products produced by the Company are carried at lower of cost and net realizable value. Raw materials purchased by the Company are carried at lower of cost and net realizable value. Raw material in transit is carried at cost by the Company.

Stores & Spare Parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items.

Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost. Value of inventories are generally ascertained on the "weighted average" basis.

5) Depreciation

Fixed assets are depreciated on a straight line basis applying the rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life whichever is higher. In respect of assets installed up to 31.3.1987, depreciation is provided at the rates in force time to time on straight line method. Intangible assets are amortized over a period of five years. Premium paid on leasehold land and land development expenses are amortized over the period of lease.

6) Revenue Recognition

i) Sale of Goods

Revenue from the sale of goods is recognized in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Export Incentive under Duty Draw Back System

Export incentive under the Duty Draw Back System is recognized at the time of shipment.

iii) Dividend and Interest income

Dividend income is recognized when the company''s right to receive dividend is established. Interest income is recognized on accrual basis based on interest rates implicit in the transactions.

7) Fixed Assets

All fixed assets are valued at cost less depreciation/amortization. The cost of an asset includes the purchase cost of materials, including import duties and non refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Pre-operation expenses including trial run expenses (net of revenue) are capitalized.

In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalized and depreciated over the period to the planned relining date.

8) Foreign Exchange Transactions

Foreign Currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in profit and loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the profit and loss account over the period of the contract.

9) Investment

Long term investments are carried at cost less provision for permanent diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value

10) Cash and Bank Balances:

Cash and Bank Balances comprises of cash on hand and balances in current accounts and deposit accounts with banks having original maturity of less than three months.

11) Employees Benefits

i) Short Term benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post Employment benefit Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries.

Defined Benefit Plans

Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognized. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gains and losses are recognized in Profit and Loss Account in full in the year in which they occur.

12) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the profit and loss account in the period in which they are incurred.

13) Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attribut- able to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is com- puted using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

14) Taxes on Income Current Taxes

Provision for Current tax is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Taxes

Deferred tax assets and liabilities are recognized by computing the tax effect on timing differences which arise during the year and reverse in the subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

15) Research and Development

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred.

16) Impairment

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on higher of discounted cash flows expected from use of such assets and net selling price (less cost of disposal) of such assets. If the assets are impaired, the company recognizes an impairment loss as the difference between the carrying value and value in use.

17) Provision, Contingent Liabilities and Contingent Assets

i) Provision

A provision is recognized in the financial statements where there exists a present obligation as a result of a past event, the amount of which is reliably estimable, and it is probable that an outflow of resources would be necessitated in order to settle the obligation.

ii) Contingent Liabilities and Assets

Contingent liability is a possible obligation that arises from past events and the 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 is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. Contingent Assets are neither recognised nor disclosed.

18) Segment Reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organisation, management structure and the internal performance reporting systems. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of the their relation- ship to the operating activities of the segment. Assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocable asset/liabilities".


Mar 31, 2012

1) Basis for Accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2) Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

3) Inventories

Finished and semi-finished products produced by the Company are carried at lower of cost and net realizable value. Raw materials purchased by the Company are carried at lower of cost and net realizable value. Raw material in transit is carried at cost by the Company.

Stores & Spare Parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items.

Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost. Value of inventories are generally ascertained on the "weighted average" basis.

4) Depreciation

Fixed assets are depreciated on a straight line basis applying the rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life whichever is higher. In respect of assets installed up to 31.3.1987, depreciation is provided at the rates in force time to time on straight line method. Intangible assets are amortized over a period of five years. Premium paid on leasehold land and land development expenses are amortized over the period of lease.

5) Revenue Recognition

i) Sale of Goods

Revenue from the sale of goods is recognized in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Export Incentive under DEPB Scheme

Export incentive under the Duty Entitlement Pass Book (DEPB) Scheme is recognized at the time of shipment.

iii) Dividend and Interest income

Dividend income is recognized when the company's right to receive dividend is established. Interest income is recognized on accrual basis based on interest rates implicit in the transactions.

6) Fixed Assets

All fixed assets are valued at cost less depreciation/amortization. The cost of an asset includes the purchase cost of materials, including import duties and non refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Pre-operation expenses including trial run expenses (net of revenue) are capitalized.

In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalized and depreciated over the period to the planned relining date.

7) Foreign Exchange Transactions

Foreign Currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in profit and loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the profit and loss account over the period of the contract.

8) Investment

Long term investments are carried at cost less provision for permanent diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value.

9) Employees Benefits

i) Short Term benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post Employment benefit Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries.

Defined Benefit Plans

Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognized. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gains and losses are recognized in Profit and Loss Account in full in the year in which they occur. Miscellaneous Expenditure

The increase in the net present value of the future liability for pension payable to the employees who have opted for retirement under the Voluntary Retirement Scheme of the company is charged to the profit and loss account.

10) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the profit and loss account in the period in which they are incurred.

11) Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

12) Taxes on Income Current Taxes

Provision for Current tax is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Taxes

Deferred tax assets and liabilities are recognized by computing the tax effect on timing differences which arise during the year and reverse in the subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

13) Research and Development

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred.

14) Impairment

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on discounted cash flows expected from use or disposal of such assets. If the assets are impaired, the company recognizes an impairment loss as the difference between the carrying value and value in use.

15) 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, 2011

1) Basis for Accounting

The financial statements are prepared under historical cost convention on accrual basis and are in compliance with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

The accounts presentation under Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities as at the balance sheet date.

2) Inventories

Finished and semi-finished products produced by the Company are carried at lower of cost and net realizable value.

Raw materials purchased by the Company are carried at lower of cost and net realizable value. Raw material in transit is carried at cost by the Company.

Stores & Spare Parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items.

Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost.

Value of inventories are generally ascertained on the "weighted average" basis.

3) Depreciation

Fixed assets are depreciated on a straight line basis applying the rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life whichever is higher. In respect of assets installed up to 31.3.1987, depreciation is provided at the rates in force time to time on straight line method. Intangible assets are amortised over a period of five years. Premium paid on leasehold land and land development expenses are amortised over the period of lease.

4) Revenue Recognition

i) Sale of Goods

Revenue from the sale of goods is recognised in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Export Incentive under DEPB Scheme

Export incentive under the Duty Entitlement Pass Book (DEPB) Scheme is recognized at the time of shipment.

iii) Dividend and Interest income

Dividend income is recognised when the companys right to receive dividend is established. Interest income is recognised on accrual basis based on interest rates implicit in the transactions.

5) Fixed Assets

All fixed assets are valued at cost less depreciation/amortisation. The cost of an asset includes the purchase cost of materials, including import duties and non refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalised as part of the cost of the asset until such time that the asset is ready for its intended use. Pre-operation expenses including trial run expenses (net of revenue) are capitalized.

In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalized and depreciated over the period to the planned relining date.

6) Foreign Exchange Transactions

Foreign Currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, are included in profit and loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the profit and loss account over the period of the contract.

7) Investment

Long term investments are carried at cost less provision for permanent diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value.

8) Employees Benefits

i) Short Term benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post Employment benefit

Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries.

Defined Benefit Plans

Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognised. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in Profit and Loss Account in full in the year in which they occur.

Miscellaneous Expenditure

The increase in the net present value of the future liability for pension payable to the employees who have opted for retirment under the Voluntary Retirement Scheme of the company is charged to the profit and loss account.

9) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalised as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the profit and loss account in the period in which they are incurred.

10) Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

11) Taxes on Income Current Taxes

Provision for Current tax is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Taxes

Deferred tax assets and liabilities are recognised by computing the tax effect on timing differences which arise during the year and reverse in the subsequent periods. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

12) Research and Development

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred.

13) Impairment

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on discounted cash flows expected from use or disposal of such assets. If the assets are impaired, the company recognises an impairment loss as the difference between the carrying value and value in use.

14) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised 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 recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

 
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