Accounting Policies of Gallantt Ispat Ltd.(old) Company

Mar 31, 2018

Note -01 Significant Accounting Policies

1 Property, Plant and Equipment (PPE)

Land, Buildings, Plant and Equipment, Furniture and Fixtures and Vehicles held for use in the production or supply of goods or services, or for administrative purposes are stated at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated. Cost includes purchase cost of materials, including import duties and non-refundable taxes, any directly attributable costs of bringing an asset to the location and condition of its intended use and borrowing costs capitalised in accordance with the Company’s accounting policy.

Properties in the course of construction for production or supply of goods or services or for administrative purposes are carried at cost, less any recognised impairment losses.

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over the useful lives, using the straight-line method. Depreciation of assets commences when the assets are ready for their intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes is accounted as change in estimate on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is recognised in profit and loss.

The Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date. Further the company has regrouped the classifications of assets whereever required.

2 Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment (if any) losses. Amortisation is recognised at straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of intangible assets is recognised in profit and loss.

The Company has elected to continue with the carrying value of all of its intangible assets recognised as of April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

3 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets (Other than goodwill) to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and risks specific to the asset for which the estimates of future cash flows have not be adjusted.

If the recoverable amount of an asset or cash generating unit is estimated to be less than the carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in profit and loss.

When an impairment loss subsequently reverses, the carrying value of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit in prior years. Any reversal of an impairment loss is recognised immediately in profit and loss.

4 Investments in Subsidiaries and Associates

Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and associates the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.

Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and associates at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., April 01, 2016.

5 Inventories

“Raw materials, work-in-progress and finished products are valued at lower of cost and net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes purchase price, non refundable taxes and duties and other directly attributable costs incurred in bringing the goods to the point of sale. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.”

Stores and spares are valued at cost comprising of purchase price, non refundable taxes and duties and other directly attributable costs after providing for obsolescence and other losses, where considered necessary.

Value of inventories are generally ascertained on the “FIFO (First in First out)” basis.

6 Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash on hand, bank balances and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the Statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

7 Financial Assets

i Initial recognition and measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.

On initial recognition, a financial asset is recognised at fair value, in case of Financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial asset.

ii Subsequent Measurement

Financial assets are subsequently / classified and measured at amortised cost fair value through profit and loss (FVTPL) fair value through other comprehensive income (FVOCI)

Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.

iii Trade Receivables and Loans

Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

iv Debt Instruments

(a) Debt instruments are initially measured at amortised cost, fair value through other comprehensive income (‘FVOCI’) or fair value through profit or loss (‘FVTPL’) till derecognition on the basis of (i) the Company’s business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

(b) Measured at amortised cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortised cost using the effective interest rate (‘EIR’) method less impairment, if any. The amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

(c) Measured at fair value through profit or loss: A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as ‘Other Income’ in the Statement of Profit and Loss.

v Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.

The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised as ‘other income’ in the Statement of Profit and Loss.

vi Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.

vii Impairment of Financial asset

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Company’s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.

The impairment losses and reversals are recognised in Statement of Profit and Loss.

8 Financial Liabilities

i Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortised cost, using the effective interest method.

ii Subsequent Measurement

Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

iii Derecognition

A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

9 Offsetting of Financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

10 Derivative financial instruments

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of item being hedged and the type of hedge relationship designated.

Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

11 Provisions and Contingent Liabilities

Provisions are recognized when the Company has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. The expenses relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows specific to the liability.

The unwinding of the discount is recognised as finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

A contingent asset is not recognised but disclosed in the financial statements where an inflow of economic benefit is probable.

Commitments includes the amount of purchase orders (net of advance) issued to parties for acquisition of assets.

Provisions, contingent assets, contingent liabilities and commitments are reviewed at each balance sheet date.

12 Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and is reduced by rebates, allowances and taxes and duties collected on behalf of the government. The Company has assumed the recovery of excise duty flows to the Company on its own account, for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Accordingly revenue includes excise duty for the year ended March 31, 2017 and for the period from April 1, 2017 to June 30,2017. From July 1, 2017 the revenue excludes Goods and Service Tax (GST) collected from customers.

i) Sale of goods

Sales are recognised when goods are supplied and significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of contract and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods.

ii) Dividend and Interest income

Dividend income is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and amount of income can be measured reliably.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the asset’s net carrying amount on initial recognition.

iii) Insurance Claims

Insurance claims are accounted for on acceptance and when there is a resonable certainty of receiving the same, on ground of prudence.

13 Foreign Currencies Transactions

The financial statements of the Company are presented in Indian Rupee (INR), which is Company’s functional and presentation currency.

Transactions in currencies other than entity’s functional currency (foreign currency) are recorded at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies (other than derivative contracts) remaining unsettled at the end of the each reporting period are remeasured at the rates of exchange prevailing at that date. Non-monetary items carried at fair value that at denominated in foreign currency are retranslated at the rate prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange difference on monetary items are recognised in profit and loss in the period.

14 Borrowing costs

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate applicable to the respective borrowing. Borrowing costs that are directly attributable to the acquisition of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset till the date it is put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

15 Employee Benefits

i) Short-term benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the employee renders the related service.

ii) Post Employment Benefit

(a) Defined Contribution Plans

Payments made to a defined contribution plan such as Provident Fund and Family Pension maintained with Regional Provident Fund Office are charged as an expense in the Statement of Profit and Loss as they fall due.

(b) Defined Benefit Plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, after discounting the same. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses are recognized immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.

16 Taxes on Income

i) Current tax

Current tax is payable based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Standalone statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

ii) Deferred tax

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying value of assets and liabilities in the Standalone financial statements and the corresponding tax bases used in the computation of taxable profits and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are only recognised on deductible temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights too set off current tax assets and current tax liabilities within that jurisdiction.

iii) Minimum alternate tax

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is recognised as a deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the Company will pay normal income tax during the specified period and it is probable that future economic benefit associated with it will flow to the Company.

iv) Current and deferred tax are recognised in profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

17 Earning Per Share

Basic Earnings per share is calculated by dividing the net profit / (loss) for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit / (loss) for the period attributable to the equity shareholders and the weighted average number of equity shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

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Mar 31, 2017

1) Disclosure of Accounting Policies (AS-1)

a) Nature of Operation

Company is engaged in the business of manufacturing of iron & steel and agro products backed up by captive power plant through its factories located at Gallantt Estate, Sahjanwa, Sector-23, Gorakhpur Uttar Pradesh. Company procures its raw materials from various suppliers and coal used in the plants are purchased indigenously as well as imported from countries outside India. Manufactured goods are sold mainly in domestic markets.

b) Accounting Concepts & Basis of Presentation

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”)/Companies Act, 1956 (“the Act 1956”), as applicable. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. GAAP comprises mandatory accounting standards as specified in the Companies (Indian Accounting Standards) Rules, 2015, the provisions of the Act, 2013 / the Act 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

c) Use of Estimates

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

2) Valuation of Inventories (AS-2)

a) Stock of Raw Materials, Stores and spare parts are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Stock of Finished goods and semi-finished goods are valued at cost or net realizable value whichever is lower.

c) Waste and scraps are accounted at estimated realizable value. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges

3) Cash Flow Statement (AS - 3)

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated.

Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term investments with an original maturity of three months or less.

4) Contingencies And Events Occurring After Balance Sheet Date (AS -4)

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

5) Net Profit Or Loss For The Period, Prior Period Items And Changes In Accounting Policies (AS -5)

Net Profit or loss for the period and prior period items are shown separately in the Profit & Loss Account.

6) Depreciation (AS - 6)

Depreciation is systematically allocated over the useful life of an asset as specified in part C of schedule II of Companies Act 2013. In respect of fixed assets (other than freehold land and capital work-in-progress) acquired during the year, depreciation/amortisation is charged on a straight line basis so as to write off the cost of the assets over the useful lives.

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

7) Revenue Recognition (AS -9)

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) Sale of Goods Sales are recognized and accounted for when they invoiced to customers and are net of excise duty, Commercial Tax (UP VAT) on dispatch of products to customers. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

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

c) Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

d) Insurance, duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

8) Accounting For Fixed Assets (AS - 10)

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies, duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress.

9) Accounting For The Effects In Foreign Exchange Rates (AS - 11)

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

b) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

10) Accounting For Investments (AS - 13)

Investments, being long term in nature, are valued at cost of acquisition. Adjustment for increase/ decrease in the value of investments, if any, will be accounted for on realisation of the investments

11) Employee Benefits (AS - 15)

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

b) The Company contributes to the employee’s provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Statement of Profit & Loss. Provision for gratuity is made on the basis of actuarial valuation at the year end in conformity with the Accounting Standard -15.

12) Borrowing Costs (AS - 16)

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged as expense in the year in which these are incurred.

13) Segment Reporting (AS - 17)

a) Identification of Segments

Primary Segment Business Segment

The Company’s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing & Sale of (a) Iron & Steel and allied products; (b) Agro Products like Atta, Suji, Maida, Bran etc., and (c) Power (d) Real Estate.

Secondary Segment Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

b) Allocation of Common costs

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

c) Unallocated items

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

14) Related Party Disclosures (AS - 18)

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

15) Earnings Per Share (AS - 20)

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares.

16) Accounting For Taxes On Income (AS - 22)

Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

17) Interim Financial Reporting (AS - 25)

The quarterly financial results are published in accordance with the requirements of Listing Regulations with stock exchanges.

18) Intangible Assets (AS - 26)

a) Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortized on a straight- line basis over its estimated useful life.

b) Intangible assets acquired by payment e.g., Trade marks, Goodwill and Technical Knowhow are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

19) Excise Duty, Commercial Tax (U.P. Value Added Tax & Central Sales Tax) & Custom Duty

a) The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head “Short Term Loans and Advances”.

b) The Company is eligible for automatic conversion of U.P. Value Added Tax & Central Sales Tax Liability for a period of 15 years into interest free loan from State Government of Uttar Pradesh, which shall be repayable after 15 years.

20) Consumption of Raw Materials, Stores & Spare Parts Etc.

Raw Materials, Stores and spare parts etc., consumed are exclusive of (a) Excise Duty on inputs under Cenvat Scheme, (b) Service tax input credits, (c) Insurance Claims received (d) Entry Tax under Uttar Pradesh Local Sales Tax Act and (f) VAT Input Credit under State laws, wherever applicable.

21) Service Tax & Cess

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

22) Preliminary Expenses

Preliminary expenses are amortized over a period of 5 years.

23) Impairment

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

24) Prior Period Items

Prior period items, if any, are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

25) Taxation

a) Tax expenses comprise of income tax, corporate dividend tax, deferred tax including applicable surcharge and cess.

b) Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

c) Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated hereinabove.

d) Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on “Accounting for Corporate Dividend Tax” regarded as a tax on distribution of profits and is not considered in determination of profits for the period.

26) Contingent Liabilities (AS - 29)

Contingent Liabilities

Contingent Liabilities are determined on the basis of available information and which are not provided for is disclosed by way of notes to the Accounts.

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Mar 31, 2016

Corporate Information

1. Corporate Information

Gallantt Ispat Limited (''the Company'' / ''GIL''), incorporated in the year 2005, is engaged in the business of Iron & Steel, Agro and Power. The Company was promoted by M/s. Gallantt Metal Limited, Chandra Prakash Agrawal, Mr. Prem Prakash Agrawal, Mr. Nitin M Kandoi and M/s. Chandra Prakash Agrawal & Sons (HUF). Company floated its capital base by coming out with Initial Public Offerings of Equity Shares in the year 2010. Company is listed on both the premier stock exchanges viz. Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Note 1: Significant Accounting Policies

1) Disclosure of Accounting Policies (AS-1)

a) Nature of Operation

Company is engaged in the business of manufacturing of iron & steel and agro products backed up by captive power plant through its factories located at Gallantt Estate, Sahjanwa, Sector-23, Gorakhpur Uttar Pradesh. Company procures its raw materials from various suppliers and coal used in the plants are purchased indigenously as well as imported from countries outside India. Manufactured goods are sold in domestic markets.

b) Accounting Concepts & Basis of Presentation

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/Companies Act, 1956 ("the Act 1956"), as applicable. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. GAAP comprises mandatory accounting standards as specified in the Companies (Indian Accounting Standards) Rules, 2015, the provisions of the Act, 2013 / the Act 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

c) Use of Estimates:

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

2) Valuation of Inventories (AS-2)

a) Stock of Raw Materials, Stores and spare parts are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Stock of Finished goods and semi-finished goods are valued at cost or net realizable value whichever is lower.

c) Waste and scraps are accounted at estimated realizable value. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges

3) Cash Flow Statement (AS - 3)

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated.

Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term investments with an original maturity of three months or less.

4) Contingencies and Events Occurring after Balance Sheet Date (AS -4)

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

5) Net Profit Or Loss for the Period, Prior Period Items And Changes In Accounting Policies (AS -5)

Net Profit or loss for the period and prior period items are shown separately in the Profit & Loss Account.

6) Depreciation (AS - 6)

Depreciation is systematically allocated over the useful life of an asset as specified in part C of schedule II of Companies Act 2013. In respect of fixed assets (other than freehold land and capital work-in-progress) acquired during the year, depreciation/amortization is charged on a straight line basis so as to write off the cost of the assets over the useful lives. The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.

7) Revenue Recognition (AS -9)

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) Sale of Goods Sales are recognized and accounted for when they invoiced to customers and are net of excise duty, Commercial Tax (UP VAT) on dispatch of products to customers. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

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

c) Dividends Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

d) Insurance, duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

8) Accounting for Fixed Assets (AS - 10)

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies, duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress.

9) Accounting for the Effects in Foreign Exchange Rates (AS - 11)

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

b) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

10) Accounting for Investments (AS - 13)

Investments, being long term in nature, are valued at cost of acquisition. Adjustment for increase/ decrease in the value of investments, if any, will be accounted for on realization of the investments.

11) Employee Benefits (AS - 15)

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

b) The Company contributes to the employee''s provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Statement of Profit & Loss. Provision for gratuity is made on the basis of actuarial valuation at the yearend in conformity with the Accounting Standard -15.

12) Borrowing Costs (AS - 16)

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged as expense in the year in which these are incurred.

13) Segment Reporting (AS - 17)

a) Identification of Segments:

Primary Segment Business Segment:

The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing & Sale of (a) Iron & Steel and allied products; (b) Agro Products like Atta, Suji, Maida, Bran etc., and (c) Power (d) Real Estate.

Secondary Segment Geographical Segment:

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows :

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

b) Allocation of Common costs

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

c) Unallocated items

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

14) Related Party Disclosures (AS - 18)

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

15) Earnings Per Share (AS - 20)

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares.

16) Accounting For Taxes On Income (AS - 22) Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

17) Interim Financial Reporting (AS - 25)

The quarterly financial results are published in accordance with the requirements of listing Agreements/Regulations with stock exchanges.

18) Intangible Assets (AS - 26)

a) Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortized on a straight- line basis over its estimated useful life.

b) Intangible assets acquired by payment e.g., Trademarks, Goodwill and Technical Knowhow are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

19) Excise Duty, Commercial Tax (U.P. Value Added Tax & Central Sales Tax) & Custom Duty

a) The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head "Short Term Loans and Advances".

b) The Company is eligible for automatic conversion of U.P. Value Added Tax & Central Sales Tax Liability for a period of 15 years into interest free loan from State Government of Uttar Pradesh, which shall be repayable after 15 years.

20) Consumption of Raw Materials, Stores & Spare Parts etc.

Raw Materials, Stores and spare parts etc., consumed are exclusive of (a) Excise Duty on inputs under Cenvat Scheme, (b) Service tax input credits,

(c) Insurance Claims received (d) Entry Tax under Uttar Pradesh Local Sales Tax Act and (f) VAT Input Credit under State laws, wherever applicable.

21) Service Tax & Cess

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

22) Preliminary Expenses

Preliminary expenses are amortized over a period of 5 years.

23) Impairment

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

24) Prior Period Items

Prior period items, if any, are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

25) Taxation

a) Tax expenses comprise of income tax, corporate dividend tax, deferred tax including applicable surcharge and cess.

b) Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

c) Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated hereinabove.

d) Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on "Accounting for Corporate Dividend Tax" regarded as a tax on distribution of profits and is not considered in determination of profits for the period.

26) Contingent Liabilities (AS - 29)

Contingent Liabilities

Contingent Liabilities are determined on the basis of available information and which are not provided for is disclosed by way of notes to the Accounts.

2.3 Disclosure regarding the Shares Issued for consideration other than cash

The Company, during the past years, undertook various Schemes including Merger of General Investment Division of Gallantt Udyog Limited and Merger of Companies with the Company. Further, the Company has concluded Bonus Issue of Equity Shares. Pursuant to the Schemes of Amalgamation and Arrangement ("the Schemes") under Sections 391 to 394 of the Companies Act, 1956 approved by the Honourable Calcutta High Court, the Company has recorded all necessary accounting effects, along with requisite disclosure in the notes to accounts. Further, during the financial year the company has allotted Equity Shares pursuant to the Scheme of Amalgamation of Gallantt Udyog Limited with the Company. The cumulative effects of these adjustments due to issue of Equity Shares for consideration other than cash has been disclosed hereunder.

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Mar 31, 2014

1) Disclosure of Accounting Policies (AS-1) :

a) Nature of Operation

Company is engaged in the business of manufacturing of iron & steel and agro products backed up by captive power plant through its factories located at Gallantt Estate, Sahjanwa, Sector-23, Gorakhpur Uttar Pradesh. Company procures its raw materials from various suppliers and coal used in the plants are purchased indigenously as well as imported from countries outside India. Manufactured goods are sold in domestic markets.

b) Accounting Concepts & Basis of Presentation

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an on-going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and rearranged accordingly.

c) Use of Estimates

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

2) Valuation of Inventories (AS-2) :

a) Stock of Raw Materials, Stores and spare parts are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Stock of Finished goods and semi-finished goods are valued at cost or net realizable value whichever is lower.

c) Waste and scraps are accounted at estimated realizable value.

3) Cash Flow Statement (AS – 3) :

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated.

Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term investments with an original maturity of three months or less.

4) Contingencies And Events Occurring After Balance Sheet Date (AS -4) :

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

5) Net Profit Or Loss For The Period, Prior Period Items And Changes In Accounting Policies (AS –5) :

Net Profit or loss for the period and prior period items are shown separately in the Profit & Loss Account.

6) Depreciation (AS – 6) :

a) Depreciation on Fixed Assets is provided for on straight-line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956.

b) Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts has been made in respect of eligible assets on the basis of operation of respective units. In respect of continuous process plant, depreciation has been provided as per rates prescribed in Schedule XIV of the Companies Act, 1956. Amortization is provided on the Straight Line Method @ 16.21%.

7) Revenue Recognition (AS -9) :

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) Sale of Goods : Sales are recognized and accounted for when they invoiced to customers and are net of excise duty, Commercial Tax (UP VAT) on dispatch of products to customers. Net Sales are shown after deducting Excise Duty which is disclosed at appropriate Places.

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

c) Dividends : Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

d) Insurance, duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

8) Accounting For Fixed Assets (AS – 10) :

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies, duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress: All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress.

9) Accounting For The Effects In Foreign Exchange Rates (AS – 11) :

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

b) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

10) Accounting For Investments (AS – 13) :

Investments, being long term in nature, are valued at cost of acquisition. Adjustment for increase/decrease in the value of investments, if any, will be accounted for on realisation of the investments.

11) Employee Benefits (AS – 15) :

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

b) The Company contributes to the employee''s provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Profit & Loss Account. Provision for gratuity is made on the basis of actuarial valuation at the year end in conformity with the Accounting Standard -15.

12) Borrowing Costs (AS – 16) :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset i s one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged as expense in the year in which these are incurred.

13) Segment Reporting (AS – 17) : a) Identification of Segments :

Primary Segment

Business Segment :

The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing & Sale of (a) Iron & Steel and allied products; (b) Agro Products like Atta, Suji, Maida, Bran etc., and (c) Power.

Secondary Segment

Geographical Segment :

The analysis of geographical segment is based on the geographical location of the customers. The geographical

segments considered for disclosure are as follows :

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

b) Allocation of Common costs :

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

c) Unallocated items :

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

14) Related Party Disclosures (AS – 18) :

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

15) Earnings Per Share (AS – 20) :

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

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

16) Accounting For Taxes On Income (AS – 22) :

Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

17) Interim Financial Reporting (AS – 25) :

The quarterly financial results are published in accordance with the requirements of listing agreements with stock exchanges.

18) Intangible Assets (AS – 26) :

a) Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortized on a straight- line basis over its estimated useful life.

b) Intangible assets acquired by payment e.g., Trade marks, Goodwill and Technical Know-how are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

19) Excise Duty, Commercial Tax (Up Vat & CST) & Custom Duty :

a) The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head "Short Term Loans and Advances".

b) The Company is eligible for automatic conversion of UP VAT & CST Liability for a period of 15 years into interest free loan from State Government of Uttar Pradesh, which shall be repayable after 15 years.

20) Consumption Of Raw Materials, Stores & Spare Parts Etc.:

Raw Materials, Stores and spare parts etc., consumed are exclusive of (a) Excise Duty on inputs under Cenvat Scheme, (b) Service tax input credits, (c) Insurance Claims received (d) Entry Tax under Uttar Pradesh Local Sales Tax Act and (f) VAT Input Credit under State laws, wherever applicable.

21) Service Tax & Cess :

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

22) Preliminary Expenses :

Preliminary expenses are amortized over a period of 5 years.

23) Impairment :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

24) Prior Period Items :

Prior period items, if any, are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

25) Taxation :

a) Tax expenses comprise of income tax, corporate dividend tax, deferred tax including applicable surcharge and cess.

b) Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

c) Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated hereinabove.

d) Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on "Accounting for Corporate Dividend Tax" regarded as a tax on distribution of profits and is not considered in determination of profits for the period.

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Mar 31, 2013

A Basis of Preparation of Financial Statement:

a) The financial statements have been prepared in compliance with all material aspects of the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provision of the Companies Act 1956 and in accordance with the generally accepted accounting principles in India.

b) The financial statements are based on historical cost and are prepared on accrual basis B Revenue Recognition:

a) Sale of goods is recognized when they are invoiced to customers and are net of excise duty'' Commercial Tax (UP VAT).

b) Insurance'' duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

C Fixed Assets:

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress:

All expenses incurred for acquiring'' erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress. The advance given for acquiring fixed assets is also shown along with capital work in progress.

D Depreciation:

Depreciation on fixed assets has been provided on straight line method (SLM) at the rates and manner prescribed under Schedule XIV to the Companies Act'' 1956 of India. Intangible Assets are stated at cost of acquisition less accumulated amortization. Amortization is provided on the Straight Line Method @ 16.21%

E Preliminary Expenses:

Preliminary expenses are amortized over a period of 5 years F Investments:

a) Long Term Investments are carried at cost after deducting provision'' if any'' for diminution in value considered to be other than temporary in nature.

b) Current Investments are stated at lower of cost and fair value.

G Impairment:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

H Earning per share:

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shares by the weighted average number of ordinary shares outstanding during the year.

I Borrowing Cost:

Borrowing Costs that are directly attributable to the acquisition or construction of Qualifying Assets are capitalized as part of cost of such assets. Other Borrowing Costs are charged as expense in the year in which these are incurred.

J Valuation of Inventories:

a) Raw materials'' Stores & Spares and packing material are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Work-in-progress is valued at cost which includes cost of inputs and other overheads up to the stage of completion.

c) Finished Goods are valued at lower of cost and net realizable value K Excise Duty'' Commercial Tax (UP VAT & CST) & Custom Duty :

a) "The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head "Short Term Loans and Advances".

b) The company is eligible for automatic conversion of UP VAT & CSAT Liability for a period of 15 years into interest free loan from State Government of Uttar Pradesh'' which shall be repayable after 15 years.

L Taxation:

a) Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

b) In accordance with Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India'' deferred tax liabilities and assets are recognized at substantively enacted tax rate'' subject to the consideration of prudence'' on timing difference'' being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. At each balance sheet date the Company re-assesses unrecognized deferred tax assets.

M Foreign Currency Transaction:

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Year end balance of foreign currency transaction is translated at the year end rates. Exchange differences arising on settlement / conversion of monetary items are recognized as income or expense in the year in which they arise except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

N Employee Benefits:

"The company contributes to the employee''s provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Profit & Loss Account. Provision for gratuity is made on the basis of actuarial valuation at the year end in conformity with the Accounting Standard -15."

O Prior Period Items:

Prior period itemsjf any'' are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

P Contingent Liabilities:

Contingent Liabilities are determined on the basis of available information and which are not provided for is disclosed by way of notes to the Accounts.

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Mar 31, 2012

A. Basis of Preparation of Financial Statement:

a) The financial statements have been prepared in compliance with all material aspects of the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provision ofthe Companies Act, 1956 and in accordance with the generally accepted accounting principles in India.

b) The financial statements are based on historical cost and are prepared on accrual basis

B. Revenue Recognition :

a) Sale of goods is recognized when they are invoiced to customers and are net of excise duty, Commercial Tax (UP VAT).

b) Insurance, duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

C. Fixed Assets:

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress :

All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress. The advance given for acquiring fixed assets is also shown along with capital work in progress.

D. Depreciation :

Depreciation on fixed assets has been provided on straight line method (SLM) except in case of assets of Power Plant on which depreciation has been provided on Written Down Value method (WDV) at the rates and manner prescribed under Schedule XIV to the Companies Act, 1956 of India.

Intangible Assets are stated at cost of acquisition less accumulated amortization.

Amortization is provided on the Straight Line Method @ 16.21%

E. Preliminary Expenses:

Preliminary expenses are amortized over a period of 5 years

F. Investments:

a) Long Term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current Investments are stated at lower of cost and fair value.

G. Impairment:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

H. Earnings per share:

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

I. Borrowing Cost:

Borrowing Costs that are directly attributable to the acquisition or construction of Qualifying Assets are capitalized as part of cost of such assets. Other Borrowing Costs are charged as expense in the year in which these are incurred.

J. Valuation of Inventories :

a) Raw materials, Stores & Spares and packing material are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Work-in-progress is valued at cost which includes cost of inputs and other overheads up to the stage of completion.

c) Finished Goods are valued at lower of cost and net realizable value.

K. Excise Duty, Commercial Tax (UP VAT) & Custom Duty :

a) The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head "Loans and Advances".

b) The company is eligible for interest free loan from State Government of Uttar Pradesh of the equivalent amount of the VAT liability paid for 15 years which shall be repayable after 15 years.

L. Taxation:

a) Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

b) In accordance with Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, deferred tax liabilities and assets are recognized at substantively enacted tax rate, subject to the consideration of prudence, on timing difference, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. At each balance sheet date the Company re-assesses unrecognized deferred tax assets.

M. Foreign Currency Transaction :

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Yearend balance of foreign currency transaction is translated at the yearend rates. Exchange differences arising on settlement / conversion of monetary items are recognized as income or expense in the year in which they arise except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

N. Employee Benefits:

The company contributes to the employee's provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Statement of Profit & Loss. Provision for gratuity is made on the basis of actuarial valuation at the year end in conformity with the Accounting Standard -15.

O. Prior Period Items :

Prior period items, if any, are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

P. Contingent Liabilities:

Contingent Liabilities are determined on the basis of available information and which are not provided for is disclosed by way of notes to the Accounts.

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Mar 31, 2011

A. Basis of Preparation of Financial Statement:

a) The financial statements have been prepared in compliance with all material aspects of the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provision of the Companies Act, 1956 and in accordance with the generally accepted accounting principles in India.

b) The financial statements are based on historical cost and are prepared on accrual basis.

B. Revenue Recognition:

a) Sale of goods is recognized when they are invoiced to customers and are net of excise duty, Commercial Tax (UP VAT).

b) Insurance, duty drawback and other claims are accounted for on receipt basis or as acknowledged by the appropriate authorities.

C. Fixed Assets:

a) Fixed Assets are stated at their original cost of acquisition/installation less accumulated depreciation and net off subsidies duties and taxes. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b) Capital work in progress:

All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure are shown under capital work in progress. The advance given for acquiring fixed assets is also shown along with capital work in progress.

D. Depreciation:

Depreciation on fixed assets has been provided on straight line method (SLM) at the rates and manner prescribed under Schedule XIV to the Companies Act, 1956 of India.

E. Preliminary Expenses:

Preliminary expenses are amortized over a period of 5 years.

F. Investments:

a) Long Term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current Investments are stated at lower of cost and fair value.

G. Impairment:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is impaired. The impairment loss recognized in prior accounting period is reversed if there has been an improvement in recoverable amount.

H. Earning per share:

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

I. Borrowing Cost:

Borrowing Costs that are directly attributable to the acquisition or construction of Qualifying Assets are capitalized as part of cost of such assets. Other Borrowing Costs are charged as expense in the year in which these are incurred.

J. Valuation of Inventories:

a) Raw materials, Stores & Spares and packing material are valued at cost. Costs of Inventories are ascertained on FIFO basis.

b) Work-in-progress is valued at cost which includes cost of inputs and other overheads upto the stage of completion.

c) Finished Goods are valued at lower of cost and net realizable value. K. Excise Duty, Commercial Tax (UP VAT) & Custom Duty :

i) The CENVAT credit available on purchase of raw materials and other eligible inputs is adjusted against excise duty payable on clearance of goods produced. The unadjusted CENVAT credit is shown under the head "Loans and Advances".

ii) The company is eligible for interest free loan from State Government of Uttar Pradesh of the equivalent amount of the VAT liability paid for 15 years which shall be repayable after 15 years. L. Taxation:

(a) Provision for current income tax is determined on the basis of the amount of tax payable on taxable Income for the year.

(b) In accordance with Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, deferred tax liabilities and assets are recognized at substantively enacted tax rate, subject to the consideration of prudence, on timing difference, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. At each balance sheet date the Company re-assesses unrecognized deferred tax assets.

M. Foreign Currency Transaction:

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Year end balance of foreign currency transaction is translated at the year end rates. Exchange differences arising on settlement / conversion of monetary items are recognized as income or expense in the year in which they arise except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

N. Employee Benefits:

The company contributes to the employee's provident fund maintained under the Employees Provident Fund Scheme of the Central Government and the same is charged to the Profit & Loss Account. Provision for gratuity is made on the basis of actuarial valuation at the year end in conformity with the Accounting Standard -15.

0. Prior Period Items:

Prior period itemsjf any, are included in respective heads of accounts and material items are disclosed by way of notes on accounts.

P. Contingent Liabilities:

Contingent Liabilities are determined on the basis of available information and which are not provided for is disclosed by way of notes to the Accounts.

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Mar 31, 2009

1.1 Basis of Accounting:

The financial statements have been prepared on accrual basis of accounting in accordance with the generally accepted accounting principles in India and the requirements of the Companies Act,1956 including the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) as referred to in Section 211 (3C) of the Companies Act, 1956.

1.2 Recognition of Revenue:

Sale of product is recognized when they are invoiced to customers and are net of sales return.

1.3 Fixed Assets:

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation. The cost of assets is inclusive of all expenses but net of Value Added Tax.

b) Capital Work in Progress

All expenses incurred for acquiring, erecting and commissioning of the fixed assets including interest on loan utilized for meeting capital expenditure and incidental expenditure incurred during the implementation of the projects are shown under capital work in progress and are allocated/ will be allocated to the fixed assets on completion of the respective units. The advance given for acquiring fixed assets is also shown along with capital work in progress.

1.4 Depreciation:

Depreciation is provided on Straight Line method at the rates and in the manner Specified in Schedule XIV to the Companies Act, 1956 on pro-rata basis.

1.5 Impairment:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful life of the assets. An impairment loss is recognized as an expense in the Profit and Loss Account in the year in which an asset is impaired.

1.6 Investments:

a) Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current Investments are stated at lower of cost and fair value.

1.7 Earning per share:

Basic and Diluted Earnings per shares are calculated by dividing the net profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

1.8 Valuation of Inventories:

Raw Materials and Finished Goods are valued at lower of cost or net realizable value. Packing Materials are valued at cost. Cost of Raw Material is determined on FIFO basis and appropriate overheads are taken into account.

1.9 Taxation:

(a) Provision for current income tax is determined on the basis of tax payable in respect of taxable income for the year.

(b) In accordance with Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, deferred tax liabilities and assets are recognized at substantively enacted tax rate, subject to the consideration of prudence, on timing difference, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Fringe benefit tax (FBT) is accounted for on the estimated value of fringe benefits for the period as per the related provision of the Income tax Act.

1.10 Foreign Currency Transaction:

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Year end balance of foreign currency transaction is translated at the year end rates. Exchange differences arising on settlement / conversion of monetary items are recognized as income or expense in the year in which they arise except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

1.11 Employee Benefits:

Contribution to Provident Fund and Employee State Insurance Fund are accounted for on accrual basis and charged to Profit & Loss Account.

1.12 Borrowing Cost:

Finance Cost relating to borrowed funds for construction or acquisition of fixed assets incurred on projects is treated as pre-operative expenses and is allocated to the fixed assets on completion of respective units.

1.13 Prior Period Items:

Prior period items are included in the respective heads of accounts and material items are disclosed by way of notes to accounts.

1.14 Preliminary Expenses:

Preliminary Expenses shall be amortized over a period of five years starting from financial year 2009-10.

1.15 Contingent Liabilities:

Contingent Liabilities not provided for are reflected in Notes to Accounts.