MPK Steels (I) Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1. Significant Accounting Policies

The company was originally formed & incorporated as a Private Limited Company at Karbi Anglong,Assam under the
Companies Act, 1956 under the name of "MPK Steels (I) Private Limited" vide certificate of incorporation dated
February 28,2005 bearing Corporate Identification Number U27109AS2005PTC007674 issued by the Registrar of
Companies,Shillong. Our company was conversion to public limited company vide special resolutions passed by our
shareholders at the Extra Ordinary General Meeting held on November 12, 2024 and the name of the company was
changed to "MPK Steels (I) Limited"pursuant to issuance of Fresh Certificate of Incorporation dated December 16 ,
2024 issued by registrar of companies Shilong vide Corporate Identification Number U27109AS2005PLC007674

The Company is engaged in the manufacturing of General Purposes Structure Steel products like M.S. Chanel, M.S.
Joist, M.S. Angle, M.S. Square Bar, M.S. Round Bar, M.S. Flat.

The registered office of the company is located at House No. 87, Rajgarh Road, Silpukhuri, Kamrup, Gmc, Assam,
India, 781003 and books of accounts maintained at A-195, RIICO Industrial Area (Ext.) Phase-ll, Bagru, Jaipur-303007.

(i) Basis of Preparation

(a) Basis of Accounting

The financial statements of the Company have been prepared and presented in accordance with generally
accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements
to comply with all material respects with the accounting standards notified under section 133 of the
Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014. The financial
statements have been prepared on an accrual basis and under the historical cost convention. The accounting
policies adopted in the preparation of financial statements are consistent with those of previous year.

(b) Use of Estimates

The preparation of financial statements are in conformity with Indian GAAP requires the management to
make judgments, estimates and assumptions that affect the reported amount of Assets, Liabilities and
Disclosure of Contingent Liabilities on the date of the Financial Statements and the reported amount of
revenue and expenses during the reported period. Although these estimates are based on the management''s
best knowledge of current events and actions, uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets, liabilities, revenue
and expenses in future periods. Changes in estimates are reflected in the financial statements in the period in
which changes are made and if material, their effects are disclosed in notes to accounts.

(c) Current vs non-current classification

All the assets and liabilities have been classified as current or non-current as per Company''s normal operating
cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of product and
time between the acquisition of assets for processing and their realization in cash and cash equivalent, the
Company has ascertained its operating cycle to be 12 months for the purpose of current - non-current
classification of assets and liabilities.

(ii) Valuation of Inventories (AS-2)

Inventories which comprise raw materials, finished goods, and packing material are carried at the lower of
cost and net realisable value. Cost of inventories comprises all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories to their present location and condition.

In determining the cost, weighted average cost method is used. In the case of manufactured inventories, fixed
production overheads are allocated on the basis of normal capacity of production facilities.

By-

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale. The net realisable value of work-in-progress
is determined with reference to the selling prices of related finished products. Raw materials and other
supplies held for use in the production of finished products are not written down below cost except in cases
where material prices have declined and it is estimated that the cost of the finished products will exceed their
net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis.

Inventorie

(ill) Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow
Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash receipts or payments and item of income or expense
associated with investing or financial cash flows. The cash flows from operating, investing and financing
activities of the Company are segregated.

(iv) Extraordinary, Exceptional and Prior Period Items (AS-5)

(a) Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities
of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made
in the financial statements. Similarly, any external event beyond the control of the Company, significantly
impacting income or expense, is also treated as extraordinary item and disclosed as such.

(b) On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary
activities of the Company, is such that its disclosure improves an understanding of the performance of the
Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes
to accounts.

(v) Revenue Recognition (AS-9)

(a) The Company follows mercantile system of accounting and recognizes significant items of income &
expenditure on accrual basis as and when the risks and rewards are transferred.

(b) Revenue from sales of goods are recognised when the risk and rewards of ownership of the product is passed
on to the customer, which is generally on dispatch of goods and is stated net of returns, trade discounts,
claims etc.

(c) Interest income is accrued at applicable interest rate on time basis.

(d) Other income is mainly accounted on accrual basis, except in case of significant uncertainties.

(vi) Property, Plant and Equipment (AS-10)

(a) Property, Plant & Equipment are stated at cost net of recoverable taxes, trade discounts and rebates and
include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of
property, plant & equipment comprises its purchase value and any directly attributable cost of bringing the
asset to its working condition for its intended use.

(b) Property, Plant and Equipments except Land is depreciated on written down value method on the basis of
useful life prescribed under Schedule II of The Companies Act, 2013

(c) The spares having useful life for more than 1 year which were previously held in stock as on the beginning of
the year and subsequent purchases made of that spares during the year have been capitalized in accordance
with the Revised AS-10 "Property, Plant and Equipment".

(d) Subsequent expenditures related to an item of Tangible Assets are added to its book value if they increase the
future benefits from the existing asset beyond its previously assessed standard of performance. In respect of
additions or extensions forming an integral part of existing assets depreciation is provided as aforesaid over
the useful life of respective assets.

(e) Significant component of assets having a life shorter than the main assets, if any is depreciated over the
shorter life.

(vii) Foreign Currency Transactions (AS-11)

(a) Initial Recognition

Foreign currency transaction is recorded at the standard rate at the time of receiving the currency.

(b) Conversion

The foreign currency monetary items consisting of amount received in advance, trade receivable, payable and

(c) Exchange difference

The exchange difference arising on the settlement of monetary items at rates different from those at which
they were initially recorded during the year or reported in previous financial statement are recognised as
income or expense when they arise as per Accounting Standard- 11 (Revised 2005) on "Accounting for the
effects in Foreign Exchange rates" issued by the Institute of Chartered Accountants of India.

(viii) Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital
Grants which are withdrew over the period and in the proportion in which depreciation is charged. Grant is
recognised at the time of submitting claim to the authority.

(ix) Investments (AS-13)

Long-term investments are stated at cost less provision for diminution other than temporary, if any, in value
of such investments. Current investments are valued at lower of cost and fair value. The assessment is done
scrip wise.

(xiv) Intangible Assets (AS-26)

(a) Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/
depletion.

(xv) Impairment of Assets (AS-28)

If the carrying amount of Property, Plant & Equipment exceeds the recoverable amount on the reporting date,
the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher
of the net selling price and the value in use determined by the present value of future cash flows.