Steel Strips Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2014

I) Accounting Convention

The financial statements have been prepared to comply in all material respects with the mandatoryAccounting Standards issued by the Institute of Chartered Accountants of India and in accordance with the relevant provisions & presentational requirements of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

ii) Revenue Recognition

i) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are stated net of sales returns. Revenue is shown gross of excise duty and net of sales tax.

ii) Insurance claim is recognized on acceptance of claim by Insurance Company.

iii) Interest from bank is recognized on accrual basis.

iii) Recognition of expenses

All Expenses are recognized on accrual basis.

iv) Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual result and estimates are recognized in the period in which the resultsare known/materialized.

v) Fixed Assets

Fixed assetsare stated atcost(net of CENVAT) less accumulated depreciation. Cost of acquisition isinclusive of freight, duties, taxes and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.

The exchange differencesarising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material, taxes and duties and other direct/ incidental expense on in-house development.

vi) Depreciation/amortization

a. Depreciation on fixed assets (other than those referred to in b and c below) is provided on straight line method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets costing Rs. 5,000 or less is provided 100% on pro-rata basis for days put in use.

c. The leasehold land is amortized over the period of lease.

d. Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized over the residual life of relevant plant and machineries.

vii) Inventories

a. Raw materials lying at Factory and job workers have been valued at weighted average cost.

b. Stocks in process have been valued at Raw material cost plus proportionate of conversion cost.

c. Finished goods lying at factory have been valued at Raw material cost plus conversion cost including excise duty payable.

d. Scrap has been valued at net realizable value.

e. Stores and Spares have been valued at weight average cost.

viii) Investments

Long-term investments including unquoted shares are carried at cost less provision, if any, for diminution in value which is other than temporary, however mutual funds investments are valued at its net realizable value . Current investments are carried at lower of cost and fair value.

ix) Transactions in Foreign Currency

(i) Initial Recognition

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

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate atthedateofthe transaction; and non- monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates thatexisted when the values were determined.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange differences relating to acquisition of imported fixed assets are adjusted in the carrying cost of the respective Fixed Assets.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense of the year.

Gain or loss on contracts relating to acquisition of imported Fixed Assets is adjusted to the carrying cost of Fixed Assets.

X) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under

i) Contributions to provident fund are made in accordance with the provisions of Employees' Provident Fund and Miscellaneous ProvisionsAct, 1952 and are charged to revenue every year.

ii) Provision for Gratuity is made based on actuarial valuation. The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation of India. The fund has been revaluated as perthe actuarial valuation. The contribution towards premium of the policy to the trust is charged to revenue every year.

iii) Provision for leave encashment is made based on actuarial valuation. The leave encashment liability is covered through a policy taken from Life Insurance Corporation of India. The contribution towards premium of the policy is charged to revenue every year.

xi) Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying assetare capitalized as part of costof such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

xii) Cenvat

The balance in the Service Tax and CENVAT account is shown as current asset.

xiii) Impairment of Assets

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average costof capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

xiv) Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extentthere is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

xv) Leases

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease managementfees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.

xvi) Provisions, Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimate in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

xvii) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes and dividend on cumulative preference shares for the year) by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for event of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split(consolidation of shares).

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.

xviii) Cash and Cash Equivalents

Cash and cash equivalents in the cash flow comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

xix) Employee Stock Compensation Cost

Stock option granted to employee under the stock option scheme are accounted at intrinsic value as per the accounting treatment prescribed in the securities and exchange board of India ( Employee stock option scheme and employee stock purchase scheme) guidelines 1999 and guidance note on accounting for employee share - based payment, issued by the institute of Chartered Accountants of India. Accordingly the excess of market price, determined as per the guideline and guidance note, of underlying equity shares (market Value), over the exercise price of the option is recognised as deferred stock compensation expenses as is charged to the statement of profit and loss account on straight line basis over the vesting period of the option. The amortized portion of the cost is shown under share holder funds.

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Mar 31, 2013

I) Convention

The financial statements are prepared under the historical cost convention in accordance with the applicable accounting standard and relevant presentational requirements of the companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost/revalued cost less depreciation.

iii) Depreciation

Since the company has already sold all the depreciable assets in earlier year, no depreciation has been provided in the books of accounts.

iv) Inventories

The company does not have any inventory of stores & Spares in hand as at the close of the year.

v) Foreign Currency Transaction

There are no foreign currency transactions during the year.

vi) Retiring Benefits

Retiring Benefits are accounted for in the Books of Accounts on accrual basis. As there was only skeleton staff during the year, the provisions of AS-15 are not applicable.

vii) Recognition of Income/Expenditure.

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable and claimed which are accounted for on cash basis.

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Mar 31, 2012

I) Convention

The financial statements are prepared under the historical cost convention in accordance with the applicable accounting standard and relevant presentational requirements of the companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost/revalued cost less depreciation.

iii) Depreciation

Since the company has already sold all the depreciable assets in earlier year, no depreciation has been provided in the books of accounts.

iv) Inventories

The company does not have any inventory of stores & Spares in hand as at the close of the year.

v) Foreign Currency Transaction

There are no foreign currency transactions during the year.

vi) Retiring Benefits

Retiring Benefits are accounted for in the Books of Accounts on accrual basis.

As there was only skeleton staff during the year, the provisions of AS-15 are not applicable.

vii) Recognition of Income/Expenditure.

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable and claimed which are accounted for on cash basis.

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Mar 31, 2010

I) Convention

The financial statements are prepared under the historical cost. convention in accordance with the applicable accounting standard and relevant presentational, requirements of the companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost/revalued cost less depreciation.

iii) Depreciation

Since the company has already sold all the depreciable assets in earlier year, no depreciation has been provided in the books of accounts.

iv) Inventories

The company does not have any inventory of stores & Spares in hand as at the close of the year.

v) Foreign Currency Transaction

There are no foreign currency transactions during the year.

vi) Retiring Benefits

Retiring Benefits are accounted for in the Books of Accounts on accrual basis. As there was only skeleton staff during the year, the provisions of AS-15 are not applicable.

vii) Recognition of Income/Expenditure.

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable and claimed which are accounted for on cash basis.