Accounting Policies of Anil Special Steel Industries Ltd. Company

Mar 31, 2014

(A) Basis of Preparation of Financial Statement

The Accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenditure, accrual basis of accounting is followed except certain expenditure / income which are accounted for on payment/ receipt basis on account of uncertainties.

(B) Fixed Assets

(i) Fixed Assets are stated at cost (including additions in value due to revaluation as mentioned in note no. 11.4 below) / less accumulated depreciation. The cost of an asset comprises its purchase price (net of discount and Cenvat and Vat) and directly attributable cost of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the Statement of Profit and Loss.

(ii) Pre-operative expenses relating to relocation of Unit-1 (Flat Rolled Products division) sitauted at Kanakpura, PO ; Meenawala, Jaipur incurred during the year on Land and Building and shown under Capital Work in Progress.

(iii) Unit-ll ; There is change in depreciation method from last year. The company has adopted Written Down Method from financial year 2013-14 instead of Straight Line Method adopted till 2013. Depreciation is provided at WDV at the rates specified in Schedule XIV and provisions made therein of companies Act, 1956 ( as amended), on the original cost.

iv) At Unit-1, as per technical opinion from expert, the Company had identified certain Plant & Machineries as "Continuous Process Plant" during financial year 2006-07 and depreciation on the same is being provided for at the rates specified under Schedule XIV of the Companies Act, 1956 (as amended) for continuous process plant till 2013. During the financial year 2013-14 company has changed its depreciation method from Continuous Process Plant to ''Triple Shift Plant'' method.

Due to change in depreication method Total additional depreciation is provided of Rs.15,23,64,130.00 during financial year 2013-14.

Lease rental on Leasehold land is amortized over the period of lease. Depreciation on incremental,value arising on account of revaluation of assets has been charged to Revaluation Reserve Account.

(C) Investments

Long Term Investments are stated at cost and dividend ,if any, thereon is accounted for as and when received. No provision for diminution in the value of investments has been made as the same are held for long term investment unless there is permanent decline in the value of investment.

(D) Foreign Currency Transactions

Transaction in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Foreign Currency assets and liabilities are translated at exchange rates prevailing at the date of Balance Sheet. The loss or gain arising out of the said translations are adjusted to the Statement of Profit and Loss except those arising in respect of liabilities for acquisition of fixed assets where the same is adjusted to the cost of assets. Profit/ Loss arising on cancellation of the forward contract is recognised as income & expense for the year.

(E) Revenue Recognition

Revenue from sale of goods is recognised on dispatch from the factory / branches. Insurance claims are accounted for on admittance of the claims by the relevant authorities. Export benefits are being accounted on accrual basis. The sales are inclusive of other incidental charges and export benefits. Interest on NSC is recognised on receipt basis.

(F) Inventories

Inventories are valued at "cost", at "estimated cost", at "lower of cost or market price" or at "estimated realisable value", depending on the nature of various inventories . The Basis of Valuation of Inventories being followed is as under:-

(i) Stores & Spares - At Weighted Average Cost

(ii) Raw Materials - At Cost on FIFO basis

(iii) Work-in-Process - At Estimated Cost

(iv) Finished Goods - At lower of Cost or net realisable value

(v) Scrap - At Realisable Value

(G) Excise Duty and Sales Tax

Excise duty has been accounted on the basis of both payments made in respect of goods cleared as well as on provision made for goods lying in bonded ware house.

(H) CenvatA/AT benefits

CenvatA/AT benefits on purchase of inputs has been credited to respective Materials account. On capital goods, it has been credited to Fixed Assets.

(I) Retirement benefits

Contribution to the employee''s provident fund are made in accordance with the provisions of the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952. Such contributions are charged to the Statement of Profit and Loss of the year in which the related services are rendered by the employees.

An irrevocable gratuity fund has been created for the benefit of employees of the Company with effect from 1st March, 1983, as per Group Gratuity''cum Life Assurance Scheme of Life Insurance Corporation of India. The additional contribution for the fund has been estimated on projected unit credit method at Rs. 3,51,95,092/- up to 31/03/14 against which Gratuity Rs.23,95,563/- for the current year (Previous year Rs.22,39,021/-) on estimation basis has been charged to Statement of Profit and Loss and liability is provided for and balance Rs.2,66,21,346/- remain unprovided. Due to paucity of funds the company has not paid contribution to LIC. However the company has paid Rs.34,68,455/- to retired/left employees during the financial year 2013-14 in addition to this provision.Due to insufficient information disclosure as per AS-15 has not been made.

Leave Pay is being accounted for on cash basis. The Company has charged a sum of Rs.33,12,760/- on account of Leave Pay during the current year (Previous year Rs.24,28,826/-). However Leave Pay accrued Rs.49,25,602/- up to 31st March 2014 as per actuarial valuation, remain un-provided for.

(J) Bonus

Bonus to employees is being accounted for on cash basis. Bonus accrued Rs. 1,59,038/- for the year ended 31/03/14 remain un-provided for.

(K) Impairment of Assets

An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and loss in the year in which an asset is identified as impaired.

(L) Provisions, 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 on financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2012

(A) Basis of Accounting

The Accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenditure, accrual basis of accounting is followed except certain expenditure/income which are accounted for on payment/receipt basis on account of uncertainties.

(B) Fixed Assets

(i) Fixed Assets are stated at cost (including additions in value due to revaluation as mentioned in note no. 11.4 below)/less accumulated depreciation. The cost of an asset comprises its purchase price (net of discount and Cenvat and Vat) and directly attributable cost of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the Statement of Profit and Loss.

(ii) Pre-operative expenses relating to new and expansion projects incurred during the construction are allocated to Plant & Machinery and Building on commencement of commercial production.

(iii) Depreciation is provided on straight line Method at the rates specified in Schedule XIV and provisions made therein of Companies Act, 1956 (as amended), on the Original cost of assets. Lease rental on Leasehold land is amortized over the period of lease. Depreciation on incremental value arising on account of revaluation of assets has been charged to Revaluation Reserve Account.

(iv) As per technical opinion from expert, the Company had identified certain Plant & Machineries as "Continuous Process Plant" during financial year 2006-07 and depreciation on the same is being provided for at the rates specified under Schedule XIV of the Companies Act, 1956 (as amended) for continuous process plant.

(C) Investments

Long Term Investments are stated at cost and dividend, if any, thereon is accounted for as and when received. No provision for diminution in the value of investments has been made as the same are held for long term investment unless there is permanent decline in the value of investment.

(D) Foreign Currency Transactions

Transaction in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Foreign Currency assets and liabilities are translated at exchange rates prevailing at the date of Balance sheet The loss or gain arising out of the said translations are adjusted to the Statement of Profit and loss except those arising in respect of liabilities for acquisition of fixed assets where the same is adjusted to the cost of assets. Profit/Loss arising on cancellation of the forward contract is recognised as income & expense for the year.

(E) Revenue Recognition

Revenue from sale of goods is recognised on despatch from the factory/branches. Insurance claims are accounted for on admittance of the claims by the relevant author ties. Export benefits are being accounted on accrual basis. The sales are inclusive of excise duty, sales tax, other incidental charges and export benefits Interest on NSC is recognised on receipt basis.

(F) Inventories

Inventories are valued at "cost", at "estimated cost", at "lower of cost or market price" or at "estimated realisable value", depending on the nature of various inventories. The Basis of Valuation of Inventories being followed is as under-

(i) Stores & Spares - At Weighed Average Cost

(ii) Flaw Materials - At Cost on FIFO basis

(iii) Work-in-Process - At Estimated Cost

(iv) Finished Goods - At lower of Cost or net realisable value

(v) Scrap - At Realisable Value

(G) Excise Duty and Sales Tax

Excise duty has been accounted on the basis of both payments made in respect of goods cleared as well as on provision made for goods lying in bonded ware house. Sales Tax realisation from the parties has been included in the Sales account and correspondingly figure of sales tax has been shown as an item of expenditure.

(H) Cenvat/VAT/Service Tax benefits

Cenvat/VAT/Service Tax benefits on purchase of inputs has been credited to respective Materials account. On capital goods, it has been credited to Fixed assets.

(I) Retirement benefits

Contribution to the employee's provident fund are made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952. Such contributions are charged to the Statement of Profit and Loss of the year in which the related services are rendered by the employees.

An irrevocable gratuity fund has been created for the benefit of employees of the Company with effect from 1st March, 1983, as per Group Gratuity cum Life Assurance Scheme of Life Insurance Corporation of India. The additional contribution for the fund has been estimated on projected unit credit method at Rs. 273,41,766/- up to 31/03/12 against which Gratuity Rs. 20,41,055/- for the current year (Previous year Rs. 18,98,107/-) on estimation basis has been charged to Statement of Profit and Loss and liability is provided for and balance Rs. 2,34,02,604/- remain un-provided. Due to paucity of funds the company has not paid contribution to LIC. Due to insufficient information disclosure as per AS-15 has not been made.

Leave Pay is being accounted for on cash basis. The Company has charged a sum of Rs. 15,39,560/- on account of Leave Pay during the current year (Previous year Rs. 14,88,434/-). However Leave Pay accrued Rs. 42,57,585/- up to 31st March'2012 as per actuarial valuation, remain un-provided for.

(J) Bonus

Bonus to employees is being accounted for on cash basis. Bonus Accrued Rs. 7,50,711/- for the year ended 31/03/12 remain un-provided for.

(K) Impairment of Assets

An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. An impairment loss is charged when an asset is identified as impaired.

(L) Treatment of Contingent Liabilities

Contingent liabilities are not provided but disclosed in notes on Financial Statements.

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Mar 31, 2011

(a) Basis of Accounting :-

The Accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenditure, accrual basis of accounting is followed except certain expenditure / income which are accounted for on payment/ receipt basis on account of uncertainties.

(b) Fixed Assets :-

i) Fixed Assets are stated at cost (including additions in value due to revaluation as mentioned in note no.2 ( c) below) / less accumulated depreciation. The cost of an asset comprises its purchase price (net of discount and Cenvat) and directly attributable cost of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the profit and loss account.

ii) Pre-operative expenses relating to new and expansion projects incurred during the construction are allocated to Plant & Machinery and Building on commencement of commercial production.

iii) Depreciation is provided on Straight Line Method at the rates specified in Schedule XIV and provisions made therein of Companies Act, 1956 (as amended), on the Original cost of assets. Lease rental on Leasehold land is amortized over the period of lease. Depreciation on incremental value arising on account of revaluation of assets has been charged to Revaluation Reserve Account.

iv) As per technical opinion from expert, the Company had identified certain Plant & Machineries as "Continuous Process Plant" during financial year 2006-07 and depreciation on the same is being provided for at the rates specified under Schedule XIV of the Companies Act 1956 (as ammended) for continuous process plant.

(c) Investments

Investments are stated at cost and dividend ,if any, thereon is accounted for as and when received. No provision for diminution in the value of investments has been made as the same are held for long term investment unless there is permanent decline in the value of investment.

(d) Revenue Recognition- Revenue from sale of goods is recognised on despatch from the factory / branches. Insurance claims are accounted for on admittance of the claims by the relevant authorities. Export benefits are being accounted on accrual basis. The sales are inclusive of excise duty, sales tax, other incidental charges and export benefits. Interest on NSC is recognised on receipt basis.

(e) Inventories :-

Inventories are valued at "cost", at "estimated cost", at "lower of cost or market price" or at "estimated realisable value", depending on the nature of various inventories . The Basis of Valuation of Inventories being followed is as under;

i. Stores & Spares - At Weighted Average Cost

ii. Raw Materials - At Cost on FIFO basis

iii. Work-in-Process - At Estimated Cost

iv. Finished Goods - At lower of Cost or net realisable value

v. Scrap - At Realisable Value

(e) Excise Duty and Sales Taxi- Excise duty has been accounted on the basis of both payments made in respect of goods cleared as well as on provision made for goods lying in bonded ware house. Sales Tax realisation from the parties has been included in the sales account and correspondingly figure of sales lax has been shown as an item of expenditure.

(f) Cenvat/VAT benefits:-

CenvatA/AT benefits on purchase of inputs has been credited to respective materials account. On capital goods, it has been credited to Fixed Assets.

(g) Retirement benefits :

Contribution to the employee's provident fund are made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952. Such contributions are charged to the Profit & Loss account of the year in which the related services are rendered by the employees. An irrevocable gratuity fund has been created for the benefit of employees of the Company with effect from 1st March, 1983, as per Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India. The additional contribution for the fund has been estimated on projected unit credit method at Rs. 231.53 lacs for earlier years. Due to paucity of funds the company has not paid the contribution for the earlier years. However, Gratuity Rs. 18.98 lacs for the current year has been charged to Profit & Loss account and liability is provided for.

Leave Pay are being accounted for on cash basis. The Company has charged a sum of Rs.14.88 lacs on account of Leave Pay during the current year. However Leave Pay accrued Rs.42.93 lacs up to 31st March'2011 as per actuarial valuation .remain un-provided for.

(h) Bonus to employees are being been accounted for on cash basis. The Company has charged a sum of Rs.25.06 lacs on account of Bonus during the current year. However, the Bonus accrued Rs. 16.99 lacs for the year ended 31st March'2011 remain un-provided for.

(i) Impairment of Assets:

An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. An impairment loss is charged when an asset is identified as impaired.

(j) Treatment of Contingent Liabilities:-

Contingent liabilities are not provided but disclosed in notes to the accounts.

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Mar 31, 2010

(a) Basis of Accounting : -

The Accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenditure, accrual basis of accounting is followed except certain expenditure / income which are accounted for on payment/ receipt basis on account of uncertainties.

(b) Fixed Assets :-

i) Fixed Assets are stated at cost (including additions in value due to revaluation as mentioned in note no.2 (c) below) / less accumulated depreciation. The cost of an asset comprises its purchase price (net of discount and Cenvat) and directly attributable cost of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the profit and loss account.

ii) Pre-operative expenses relating to new and expansion projects incurred during the construction are allocated to Plant & Machinery and Building on commencement of commercial production.

iii) Depreciation is provided on straight line Method at the rates specified in Schedule XIV and provisions made therein of Companies Act, 1956 (as amended), on the Original cost of assets. Lease rental on Leasehold land is amortized over the period of lease. Depreciation on incremental value arising on account of revaluation of assets has been charged to Revaluation Reserve Account.

iv) As per technical opinion from expert, the Company had identified certain Plant & Machineries as "Continuous Process Plant" during financial year 2006-07 and depreciation on the same is being provided for at the rates specified under Schedule XIV of the Companies Act 1956 (as amended) for continuous process plant.

(c) Investments

Investments are stated at cost and dividend ,if any, thereon is accounted for as and when received. No provision for diminution in the value of investments has been made as the same are held for long term investment unless there is permanent decline in the value of investment.

(d) Foreign Currency Transactions :-

Foreign Currency assets and liabilities are translated at exchange rates prevailing at the date of transaction. The loss or gain arising out of the said translations are adjusted to the profit and loss account except those arising in respect of liabilities for acquisition of fixed assets where the same is adjusted to the cost of assets. Profit/ Loss arising on cancellation of the forward contract is recognised as income & expense for the year.

(e) Revenue Recognition:-

Revenue from sale of goods is recognised on despatch from the factory / branches. Insurance claims are accounted for on admittance of the claims by the relevant authorities. Export benefits are being accounted on accrual basis. The sales are inclusive of excise duty, sales tax, other incidental charges and export benefits. Interest on NSC is recognised on receipt basis.

(f) Inventories :-

Inventories are valued at "cost", at "estimated cost", at "lower of cost or market price" or at "estimated realisable value", depending on the nature of various inventories. The Basis of Valuation of Inventories being followed is as under;

i. Sores & Spares - At Weighed Average Cost

ii. Raw Materials - At Cost on FIFO basis

iii. Work-in-Process - At Estimated Cost

iv. Finished Goods - At lower of Cost or net realisable value

v. Scrap - At Realisable Value

(g) Excise Duty and Sales Taxi- Excise duty has been accounted on the basis of both payments made in respect of goods cleared as well as on provision made for goods lying in bonded ware house. Sales Tax realisation from the parties has been included in the Sales account and correspondingly figure of sales tax has been shown as an item of expenditure.

(h) Modvat/Cenvat/VAT benefits:-

Modvat/Cenvat/VAT benefits on purchase of inputs has been credited to respective Materials account. On capital goods, it has been credited to Fixed assets.

(i) Retirement benefits :

An irrevocable gratuity fund has been created for the benefit of employees of the Company with effect from 1st March, 1983, as per Group Gratuity cum Life Assurance Scheme of Life Insurance Corporation of India. The additional contribution for the fund has been estimated on projected unit credit method at Rs. 294.69 lacs for earlier years and Rs. 15.41 lacs for the current year. Due to paucity of funds the company has not paid the contribution for the earlier years and no provision has been made in the books of accounts on account of gratuity liability for current year.

(j) Bonus and Leave Pay to employees have been accounted for on cash basis. The liability for accrued bonus for the year has been worked out to Rs.83.56 lacs and for leave pay Rs. 43.93 lacs, respectively have not been provided for.

(k) Impairement of Assets:

An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. An impairement loss is charged when an asset is identified as impaired.

(I) Treatment of Contingent Liabilities:-

Contingent liabilities are not provided but disclosed in notes to the accounts.