Accounting Policies of Incredible Industries Ltd. Company

Mar 31, 2016

1) CORPORATE INFORMATION:

Adhunik Industries Ltd (“the company”) is a public limited company, having manufacturing facilities at Durgapur, West Bengal. Its equity shares are listed on Stock Exchanges in India. The Company is primarily engaged in the manufacture and sale of iron and steel products.

2) SIGNIFICANT ACCOUNTING POLICIES:

(I) Basis of Accounting:

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

(II) Presentation and disclosure of financial statement:

The Company has prepared financial statements as per schedule III notified under the Companies Act, 2013. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(III) Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and result of operation during the reported year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(IV) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(a) Revenue from sale of goods and services rendered is recognized when significant risks and rewards of ownership of products and services have passed to the customers.

(b) Claims made in respect thereof is accounted as income in the year of receipts or acceptance by the client or evidence of acceptance received by the client.

(c) Dividend is recognized on cash basis.

(d) Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(e) Revenue in respect of rejected/scrapped materials is recognized as and when these are sold or amount there against is ascertained.

(V) Fixed Assets:

(a) Fixed assets are stated at cost, less accumulated depreciation / amortization and impairment if any. Cost comprises the purchase price inclusive of duties (net of CENVAT & VAT), taxes, incidental expenses, erection/commissioning expenses, and interest, etc up to the date the asset is put to use.

(b) Machinery spares which can be used only in connection with an item of fixed assets and whose use as per technical assessment is expected to be irregular, are capitalized and depreciated over the residual useful life of the respective assets.

(c) Expenditure on New Projects and Substantial Expansion: Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction activity or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure on expansion are capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

(VI) Depreciation:

(a) The Classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

(b) Depreciation on Fixed Assets is provided on Straight Line Method based on the estimated useful life of the assets as prescribed in Schedule II of the Companies Act, 2013. The residual value has been considered as 5% for the assets.

(c) Depreciation includes the amount written off in respect of leasehold land over the respective lease period.

(d) Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the month of addition / disposal.

(e) Discarded Fixed Assets awaiting disposal are valued at estimated realizable value and disclosed separately.

(f) Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

(VII) Fixed Assets acquired under lease:

(a) Finance Lease

(i) Assets acquired under lease agreements which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease Payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to expenses account.

(ii) Lease assets capitalized, if any, are depreciated over the shorter of the estimated useful life of the asset or the lease term.

(b) Operating Lease

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the profit and loss account on a straight line basis over the lease term.

(VIII) Investments:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(IX) Inventories:

(a) Raw Materials, Stores & Spares & Packing Materials are valued at lower of cost computed on FIFO basis and net realizable value.

(b) Finished Goods are valued at lower of cost computed on weighted average basis or net realizable value. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

(c) By-products are valued at net realizable value.

(d) Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(X) Cash & Cash Equivalents:

Cash and cash equivalents in the Cash Flow comprise cash at bank and in hand (including cheques / drafts in hand), balance lying in banks in current account (including overdraft) and deposits with maturity within 3 months.

(XI) Excise Duty:

Excise Duty on Finished Goods stock lying at the factories is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XII) Employees Benefits:

I. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when these are due.

ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of Financial Year.

iii. Actuarial gain/losses are immediately taken to the Profit & Loss Account and are not deferred.

(XIII) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(XIV) Provisions:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(XV) Taxation:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is ''reasonable certainty'' that sufficient future taxable income will be available against which such deferred tax assets can be realized.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

(XVI) Segment Reporting:

The Company has identified Iron & Steel products as its sole operating segment and the same has been treated as primary segment.

(XVII) Contingent Liabilities:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of Notes to the Accounts.

(XVIII) Earning per share:

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

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(XIX) Impairment of Assets:

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(XX) Foreign Currency Translation:

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

Conversion: Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value determined.

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Mar 31, 2015

(I) Basis of Accounting:

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

(II) Presentation and disclosure of financial statement:

The Company has prepared financial statements as per schedule III notified under the Companies Act 2013. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(III) Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and result of operation during the reported year. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(IV) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(a) Revenue from sale of goods and services rendered is recognized when significant risks and rewards of ownership of products and services have passed to the customers.

(b) Claims made in respect thereof are accounted as income in the year of receipts or acceptance by the client or evidence of acceptance received by the client.

(c) Dividend is recognized on cash basis.

(d) Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(e) Revenue in respect of rejected / scrapped materials is recognized as and when these are sold or amount there against is ascertained.

(V) Fixed Assets:

(a) Fixed assets are stated at cost, less accumulated depreciation / amortization and impairment if any Cost comprises the purchase price inclusive of duties (net of CENVAT &VAT), taxes, incidental expenses, erection / commissioning expenses, and interest, etc up to the date the asset is put to use.

(b) Machinery spares which can be used only in connection with an item of fixed assets and whose use as per technical assessment is expected to be irregular, are capitalized and depreciated over the residual useful life of the respective assets.

(c) Expenditure on New Projects and Substantial Expansion: Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction activity or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditures on expansion are capitalized. As regards to indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditures are capitalized only if they increase the value of the asset beyond its original standard of performance.

(VI) Depreciation:

(a) The classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

(b) Depreciation on Fixed Assets is provided on Straight Line Method based on the estimated useful life of the assets as prescribed in Schedule II of the Companies Act, 2013. The residual value has been considered as 5% for the assets.

(c) Depreciation includes the amount written off in respect of leasehold land over the respective lease period.

(d) Depreciation on Fixed Assets added/disposed off during the year, is provided on pro-rata basis with reference to the month of addition/disposal.

(e) Discarded Fixed Assets awaiting disposal are valued at estimated realizable value and disclosed separately.

(f) Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

(VII) Fixed Assets acquired under lease:

(a) Finance Lease

(i) Assets acquired under lease agreements which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to expenses account.

(ii) Lease assets capitalized, if any, are depreciated over the shorter of the estimated useful life of the asset or the lease term.

(b) Operating Lease

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the Profit and Loss Account on a Straight Line Method basis over the lease term.

(VIII) Investments:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(IX) Inventories:

(a) Raw Materials, Stores & Spares & Packing Materials are valued at lower of cost computed on FIFO basis and net realizable value.

(b) Finished Goods are valued at lower of cost computed on weighted average basis or net realizable value. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

(c) By-products are valued at net realizable value.

(d) Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(X) Cash & Cash Equivalents:

Cash and cash equivalents in the Cash Flow comprise cash at bank and in hand (including cheques / drafts in hand), balance lying in banks in current account (including overdraft).

(XI) Excise Duty:

Excise Duty on finished goods stock lying at the factories is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XII) Employees' Benefits:

i. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when these are due.

ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of financial year.

iii. Actuarial gain / losses are immediately taken to the Profit & Loss Account and are not deferred.

(XIII) Borrowing Costs:

Borrowing costs that are directly attribut abletotheacquisitionorconstructionofqualifyingassetsarecapitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(XIV) Provisions:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(XV) Taxation:

Tax expense comprises current and deferred tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred Income Taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is 'reasonable certainty' that sufficient future taxable income will be available against which such deferred tax assets can be realized.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created byway of a credit to the Profit and Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(XVI) Segment Reporting:

The Company has identified Iron & Steel products as its sole operating segment and the same has been treated asprimary segment.

(XVII) Contingent Liabilities:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed byway of Notes to the Accounts.

(XVIII) Earning per share:

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

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(XIX) Impairment of Assets:

i. The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life

(XX) Foreign Currency Translation:

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

Conversion: Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value is determined.

Exchange Difference: Exchange differences are recognized as income or as expenses in the period in which they arise.

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Mar 31, 2014

(I) Basis of Accounting :

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

(II) Presentation and disclosure of financial statement :

The Company has prepared financial statements as per revised schedule VI notified under the Companies Act 1956. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(III) Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and result of operation during the reported year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(IV) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

a) Revenue from sale of goods and services rendered is recognized when significant risks and rewards of ownership of products and services have passed to the customers.

b) Claims made in respect thereof is accounted as income in the year of receipts or acceptance by the client or evidence of acceptance received by the client.

c) Dividend is recognized on cash basis.

d) Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(V) Fixed Assets :

a) Fixed assets are stated at cost, less accumulated depreciation / amortization and impairment if any. Cost comprises the purchase price inclusive of duties (net of CENVAT & VAT), taxes, incidental expenses, erection/commissioning expenses, and interest etc. up to the date the asset is put to use.

b) Machinery spares which can be used only in connection with an item of fixed assets and whose use as per technical assessment is expected to be irregular, are capitalized and depreciated over the residual useful life of the respective assets.

c) Expenditure on New Projects and Substantial Expansion: Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction activity or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure on expansion are capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

(VI) Depreciation :

a) The Classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

b) Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956 or estimated useful life whichever is higher.

c) Depreciation Includes the amount written off in respect of leasehold land over the respective lease period.

d) Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the month of addition / disposal.

e) Discarded Fixed Assets awaiting disposal are valued at estimated realizable value and disclosed separately.

f) Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

(VII) Fixed Assets acquired under lease :

a) Finance Lease

(i) Assets acquired under lease agreements which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease Payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to expenses account.

(ii) Lease assets capitalized , if any, are depreciated over the shorter of the estimated useful life of the asset or the lease term.

b) Operating Lease

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the profit and loss account on a straight line basis over the lease term.

(VIII) Investments :

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(IX) Inventories :

a) Raw Materials, Stores & Spares & Packing Materials are valued at lower of cost computed on FIFO basis and net realizable value.

b) Finished Goods are valued at lower of cost computed on weighted average basis or net realizable value. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

c) By-products are valued at net realizable value.

d) Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(X) Cash & Cash Equivalents :

Cash and cash equivalents in the Cash Flow comprise cash at bank and in hand (including cheques / drafts in hand), balance lying in banks in current account (including overdraft).

(XI) Excise Duty :

Excise Duty on Finished Goods stock lying at the factories is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XII) Employees Benefits :

a) Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when these are due.

b) Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of Financial Year.

c) Actuarial gain/losses are immediately taken to the Profit & Loss Account and are not deferred.

(XIII) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(XIV) Provisions:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(XV) Taxation:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is ''reasonable certainty'' that sufficient future taxable income will be available against which such deferred tax assets can be realized.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

(XVI) Segment Reporting:

The Company has identified Iron & Steel products as its sole operating segment and the same has been treated as primary segment.

(XVII) Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of Notes to the Accounts.

(XVIII) Earning per share:

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

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(XIX) Impairment of Assets:

a) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

ib) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(XX) Foreign Currency Translation:

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

Conversion: Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Non–monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value determined.

Exchange Difference: Exchange differences are recognized as income or as expenses in the period in which they arise.

(XXI) Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years.

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Mar 31, 2013

(I) Basis of Accounting :

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

(II) Presentation and disclosure of financial statement;

The Company has prepared financial statements as per revised schedule VI notified under the Companies Act 1956. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(III) Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and result of operation during the reported year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(IV) Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(a) Revenue from sale of goods and services rendered is recognised when significant risks and rewards of ownership of products and services have passed to the customers.

(b) Claims made in respect thereof is accounted as income in the year of receipts or acceptance by the client or evidence of acceptance received by the client.

(c) Dividend is recognized on cash basis.

(d) Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(V) Fixed Assets:

(a) Fixed assets are stated at cost, less accumulated depreciation / amortization and impairment if any. Cost comprises the purchase price inclusive of duties (net of CENVAT & VAT), taxes, incidental expenses, erection/commissioning expenses, and interest etc. upto the date the asset is put to use

(b) Machinery spares which can be used only in connection with an item of fixed assets and whose use as per technical assessment is expected to be irregular, are capitalised and depreciated over the residual useful life of the respective assets.

(c) Expenditure on New Projects and Substantial Expansion: Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction activity or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.

(Vi) Depreciation:

(a) The Classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

(b) Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956 or estimated useful life whichever is higher.

(c) Depreciation Includes the amount written off in respect of leasehold land over the respective lease period.

(d) Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the month of addition / disposal.

(e) Discarded Fixed Assets awaiting disposal are valued at estimated realisable value and disclosed separately.

(f) Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

(VII) Fixed Assets acquired under lease :

(a) Finance Lease

(i) Assets acquired under lease agreements which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the eased item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease Payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.Finance charges are charged directly to expenses account.

(ii) Lease assets capitalised , if any, are depreciated over the shorter of the estimated useful life of the asset or the lease term.

(b) Operating Lease

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the profit and loss Account on a straight line basis over the lease term.

(VIII) Investments :

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

(IX) Inventories :

a) Raw Materials, Stores & Spares & Packing Materials are valued at lower of cost computed on FIFO basis and net realisable value.

(b) Finished Goods are valued at lower of cost computed on weighted average basis and net realisable value. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

(c) By-products are valued at net realisable value.

(d) Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(X) Cash & Cash Equivalents :

Cash and cash equivalents in the Cash Flow comprise cash at bank and in hand (including cheques / drafts in hand), balance lying in banks in current account (including overdraft).

(XI) Excise Duty:

Excise Duty on Finished Goods stock lying at the factories is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XII) Employees Benefits:

i. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when these are due.

ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of Financial Year.

iii. Actuarial gain/losses are immediately taken to the Profit & Loss Account and are not deferred.

(XIII) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(XIV) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(XV) Taxation:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date Deferred tax assets are recognised only to the extent that there is reasonable certainty'' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

(XVI) Segment Reporting:

The Company has identified Iron & Steel products as its sole operating segment and the same has been treated as primary segment.

(XVII) Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of Notes to the Accounts.

(XVII!) Earning per share:

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

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(XIX) Impairment of Assets:

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ externaI factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(XX) Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years.

---

Mar 31, 2012

I) Basis of Accounting :

Thefinanciai-statements have been prepared to comply In all material respects with the notic'd Accounting standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared op an accrual bails under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the. Company are consistent with those used in the previous year.

(II) Presentation and disclosure of financial statement:

During The year 31st March 2012, the revised schedule VI notified under Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statement The adoption of revised schedule VI does not Impact recognition and measurement principles followed for preparation of financial statement. However it has significant Impact on presentation,and disclosures made In financial statement. The company has also reclassified the ptevlOus year figures in accordance with the requirements applicable in the current year.

(III) Use of Estimates ;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingentliabilities at the date of the financial statements and result of operation during the reported year. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(IV) Fevenue Recognition:

Revenue recognised to the.extent that it is probable that the economic benefits will flow to the Companyand the revenuecan be reliably measured.

(a)Revenue from sale of goods and services rendered is recognised when significant risks and rewards of ownership of products arid services ha ve passed to the customer.

(b) Claims made In respect thereof is accounted as income In the year of receipts or acceptance by the cllent or evidence of acceptance received by the client.

(c) Dividend is recognized on cash basis.

(d) interest is recognised on a time proportion basis taking into account the amount outstanding and the.rate applicable.

(V) Fixed Assets;

(a) Fixed assets -are stated at cost, less accumulated depreciation / amortization and impairment if any. Cost comprises the puchase price inclusive of duties (net of CENVAT & VAT), taxes, incidental expenses, erection/commissioning- expenses, and interest etc. upto the date the asset Is put to use

(b) Machinery spares which can be used only in connection with an Item of fixed assets and Whose as per technical assessment Is expected to be Irregular, are capitalised and depreciated Over the residual useful life of the respective assets.

(c) Expenditure on New Projects, and Substantial Expansion; Expenditure directly relating to construction activity Is capitalised. Indirect expenditure Incurred during construction period is capitalised as part of the. Indirect construction cost to the extent to which the expenditure Is Indirectly related to construction activity or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is Incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure On expansion are capitalised. As regards Indirect exjSffc'nditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved asa result of capital expansion. Both direct and Indirect expenditure are capitalised only If they: In crease the value of the asset beyond lts original standard of performance.

(vi) Depreciation :

(a) .The Glassification of Plant and Machinery into continuous and non-edntinuous process is done as per technical certification and depreciation thereon is provided accordingly.

(b) Depredation on Fixed Assets is,provided on Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956 or estimated useful life whichever is higher.

(c) Depreciation Includes the amount written off In respect of leasehold land over the respective lease period.

(d) Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the month of addition / disposal.

(e) Discarded Fixed Assets awaiting disposal are valued at estimated realisable value and disclosed separately.

(f) Depredation, on insurance Spares. / standby equipments Is provided over the useful lives Of the respective mother assets.

(VII) Fixed Assets acquired under lease:

(a) Finance Lease

(i) Assets acquired under Jease agreements which effectively transfer to the Company substantially all the risks and benefits Incidental to ownership of the leased Item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease Payments are apportioned, between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are.charged directly to expenses account,

(ii) Lease assets capitalised ,if any,,are depreciated over the shorter of the estimated useful life of the asset or the lease term.

(b) Operating Lease

Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the profit and loss Account on a straight line basis over the lease term.

(VIII) Investments :

Investments- that are readily realisable and intended to be held for not more than a year are classified as current Investments. All other Investments are classified as long-term investments. Current Investments are carried at lower of cost and fair value determined on an Individual investment basis. Long-term investments are carried at cost:However,.provision for diminution In value Is made to recognlsea decline otherthan temporary in the value,of the investments,

(IX) Inventories:

(a) Raw Materials, Stores & Spates & Packing Materia Is a re valued at lower of cost computed on FIFO basis and net realisable value.

(b) Finished Goods a re valued at lower of cost computed on weighted average basisand net realisable value. Cbst of finished goods Includes direct materials Snd labour and a proportion of manufacturing overheads based on normal operating capacity.

(c) By-products are valued at net realisable value.

(d) Net realizable value is the estimated selling price In the ordinary course of business less estimated,costs of completion and the estimated costs necessaryto make the sale.

(X) Cash & Cash Equivalents:

Cash and cash equivalents In the Cash Flow comprise cash at bank and In hand (including cheques /drafts In hand), balance lying in banks in current account (including overdraft).

(XI) Excise Duty:

Excise Duty on Finished Goods stock lying at the factories is accounted for at the point of manufacture of goods and ^accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XII) Employees Benefits :

i. Provident Fund ii a defined contribution scheme and the contributions are charged to the Profit & Loss Account Of theyear when these are due.

ii. Gratuity liability is a defined benefit obligation and Is provided for on the basis of actuarial valuation made at the end of. Financial Year.

iii. Actuarial galn/losses afe Immediately taken to the Profit & Loss Account and are not deferred.

(XIII) Borrowing cost:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised until, the time all substantial activities necessaryto prepare the qualifying assets for their intended use are complete, A qualifying asset is one that necessarily takes substantial period of time to get ready for Its intended use. All other borrowing costs are charged to revenue.

(XIII) Provisions:

A provision is recognised when an enterprise has a present obligation as' a result of past event and |t is probable that an outflow of resources will be required to settle the obligation, In respect ofwhicha reliable estimate can be made.

Provisions made In terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date, these are reviewed at each balance sheet date and adjusted to reflect the current best estimates,

(XIV) Taxation:

Tax expense comprises of current and. deferred tax. Current income tax is measured at the amount expected to be paldSothe.tax authorities in accordance with the'Indian Income Tax Act, 196L Deferred: income taxes reflects the Impact of current year timing, differences between taxable income and accounting Income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised Onlyte the extent that there It'reasonable certainty1 that sufficient-future taxable Income will be available against-fobich stifch deferred tax assets can be realised

MAT credit Is recognised as an asset only when and to the extent there Is convincing evidence that the company will pay normal income-tax during the specified period. In the year In which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations Contained in guidance note issued by the Institute of Chartered Accountants of lndia, the said asset Is crea ted by way of a credit to the profit and loss account and shown as MAT Credit Entitlement, The Company reviews the same at each balance sheet date and writes dowii the carrying amount of MAT Credit Entitlement to the extent there Is rio tongerconVincing evidence to the effect that.Company will' pay normal income tax during the specified period.

(XV) Segment Reporting:

The Company has Identified Iron & Steel products as Its sole operating segment and the same has been treated as primary-segment

(XVI) contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable, certainty, are treated as contingent arid disclosed by way of Notes to the Accounts.

(XVII) Earning per share:

Earning per share Is calculated by dividing the net profit or loss for the year attributable to equity shareholders; by the weighted Sverage number of equity shares outstanding during the year.

For the purpose of calculating- diluted earnings per share, the net profit of loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted:for the effects of all dilutive potential equity.shares.

(XVII)) Impairment of Assets:

i. The carrying amounts of assets are reviewed at each balance sheet date if there Is any Indication of Impairment based on Internal/externaI factors. An Impairment toss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverabje amotirit is the greater of the asset's net selling pricerand value Imuse. In assessing the value fa use, the estimated future cash flows are discounted to their present value a t the weighted average cost.of Capital.

ii. After Impairment, depreciation is provided on the revised carrying.amount of the assets over its remaining usefutlife.

(XIX) Miscellaneous Expenditure

Preliminary expdrts are amortized oyera period of five years.

---

Mar 31, 2011

Basis of Accounting :

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act. 1956. The financial statements have been prepared on an accrual basis under the historical cost convention. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year. | ^

(II) Use of Estimates ;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and result of operation dunng the reported year. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(III) Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(a) Revenue from sale of goods and services rendered is recognised when significant risks and rewards of ownership of products and services have passed to the customers.

(b) Claims made in respect thereof is accounted as income in the year of receipts or acceptance by the client or evidence of acceptance received by the client

(c) Dividend is recognized on cash basis.

(d) Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(IV) Fixed AssetsJ

(a) Fixed 3ssots are stated at cost, less accumulated depredation / amortization and impairment if any.

Cost comprises the purchase price inclusive of duties (net of CENVAT & VAT), taxes, incidental expenses, erectlorVcommissioning expenses, and interest eta uplo the date the asset is put to use

(b) Machinery spares which can be used only in connection with an item of fixed assets and whose use as per technical assessment is expected to be irregular, are capitalised and depreciated over the residual useful life of the respective assets.

(c) Expenditure on New Projects and Substantial Expansion: Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction activity or is incidental thereto. Other Indirect expenditure (including borrowing costs) incurred during the construction period which is not related to Ihe construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the Indirect expenditure. All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only (hat portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion Both direct and indirect expenditure are capitalised only if they increase the value of Ihe asset beyond4s original standard of performance /Cp (a) The Classification of Plant and Machinery-into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

(b) Depredation on Fixed Assets is provided on Straight Line Method at the rates spedfied in Schedule XIV of the Companies Act, 1958 or estimated useful life whichever is higher.

(c) Depreciation Includes the amount written off in respect of leasehold land over the respective lease period.

(d) Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the month of addition / disposal.

(e) Discarded Fixed Assets awaiting disposal are valued at estimated realisable value and disclosed separately.

(f) Depredation on Insurance Spares I standby equipments is provided over the useful lives of the respective mother assets.

(VI) Fixed Assets acquired under lease:

(a) Finance Lease

(i) Assets acquired under lease agreements which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment after discounting them at an appropriate discount rate at the inception of the lease term and disclosed as leased assets. Lease Payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to expenses account

(D) Lease assets capitalised , if any, are depreciated over the shorter of the estimated useful life of the asset or the lease term.

(b) Operating Lease

Lease where the lessor effectively retains substantially ail the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease payments are recognized as expense in the profit and toss Account on a straight line basis over the lease term.

(VII) Investments:

Investments that are readily realisable and intended to be held for not more than a year are classified as current Investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

(VIII) Inventories:

(a) Raw Materials, Stores & Spares .Packing Materials & Traded Goods are valued at lower of cost computed on FIFO basis and net realisable value.

(b) Finished Goods are valued at lower of cost computed on weighted average basis and net realisable value. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

(c) By-products are valued at net realisable value.

(d) Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(IX) Cash & Cash Equivalents :

Cash and cash equivalents in the Cash Flow comprise cash at bank and in hand (including cheques /

hand) balance lying in banks in current account (including overdraft).

(X) Excise Duty :

Excise Duty on Finished Goods stack lying at the factories is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date.

(XI) Fmniovees Benefits :

i. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when these are due

ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of Financial Year.

iii. Actuarial gain/tosses are immediately taken to the Profit 8 Loss Account and are not deferred.

(XII) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assels are capitalised until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. i

(XIII) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. .

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates,

(XIV) Taxation:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is ''reasonable certainty'' that sufficient future taxable income wifi be available against which such deferred tax assets can be realised.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which Ihe Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement, The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

(XV) Segment Reporting:

The Company has identified Iron & Steel products as its sole operating segment and the same has been treated as primary segment.

(XVI) Continqencios:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of Notes to the Accounts.

(XVII) Earning per share:

Earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year

For the purpose of calculating diluted eamings''per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

(XVIII) impairment of Assets;

i The carrying amounts of assets are reviewed at each balance sheet dale if there is any indication of impairment based on intemaltextemal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

ii. After impairment, depredation is provided on the revised carrying amount of the assets over its remaining useful life. . .

1) Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years.