Accounting Policies of Crimson Metal Engineering Company Ltd. Company

Mar 31, 2024

2. Significant Accounting Policies

2.1 Basis of preparation

(i) Compliance with Ind AS-

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting
Standards) Rules, 2015] and other relevant provisions of the Act.

The financial statements are presented in INR and all values are rounded to the nearest Lakhs
(INR 00,000), except when otherwise indicated.

(ii) Historical cost convention-

The financial statements have been prepared on a historical cost basis, except for:

a) Certain financial assets & liabilities (including derivative instruments) and contingent
consideration that are measured at fair value.

b) Assets held for sale have been measured at fair value less cost to sell

c) Defined benefit plans - plan assets measured at fair value.

2.2 Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current
classification.

> An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle of
the Company

• Held primarily for the purpose of trading

• Expected to be realized within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting period.

All other assets are classified as non -current.

> A liability is treated as current when:

• It is expected to be settled in normal operating cycle of the Company

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months from the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities. The

operating cycle is the time between the acquisition of assets for processing and their realization
in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

2.3 Revenue recognition

The Company has adopted Ind AS 115, ''Revenue from Contracts with Customers'' using
cumulative effect approach. Under Ind AS 115, revenue is recognized upon transfer of control of
promised goods or services to customers at an amount that reflects the consideration to which
the Company is expected to be entitled to in exchange for those goods or services. Revenue
towards satisfaction of a performance obligation is measured at the amount of transaction price
allocated to that performance obligation as per contractually agreed terms with the customers.
The transaction price of goods sold and services rendered is net of various discounts and schemes
offered by the Company as part of the contract. Revenue is recorded provided the recovery of
consideration is probable and determinable. Revenue from sale of goods and services transferred
to distributors/ intermediaries are recognized at a point in time.

a) Sale of goods:

Revenue from the sale of manufactured and traded goods products is recognized upon transfer
of control of products to the customers which coincides with their delivery to customer and is
measured at fair value of consideration received/receivable, net of discounts, amount collected
on behalf of third parties and applicable taxes.

b) Interest:

Interest income is recognized on time proportion basis taking into account the amount
outstanding and rate applicable. For all debt instruments measured at amortized cost, interest
income is recorded using the effective interest rate ("EIR"). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over the expected life of the financial instrument
or a shorter period, where appropriate, to the gross carrying amount of the financial assets.
Interest income is included in other income in the Statement of Profit and Loss.

c) Dividends:

Dividend is recognized when the Company''s right to receive the payment is established, which is
generally when shareholders approve the dividend.

d) Commission:

Commission income is recognized rateably over the contract period as per the agreed contractual
terms.

e) Services rendered:

Revenue from service related activities including management and technical know-how service
is recognized as and when services are rendered and on the basis of contractual terms with the
parties.

f) Other Operating revenues

Rental Income arising from operating leases on investment properties is accounted for on a
straight line basis over the lease term and is included in revenue in the Statement of Profit and
Loss due to its operating nature.

2.4 Investment Property

(i) Recognition and measurement

Investment Property comprise of Freehold Land and Building.

Investment properties are measured initially at cost, including transaction costs. Subsequent
to initial recognition, investment properties are stated at cost less accumulated depreciation
and accumulated impairment loss, if any.

Though the Group measures investment property using cost based measurement, the fair
value of investment property is disclosed in the notes. Fair values are determined based on an
annual evaluation performed by an accredited external independent valuer.

Investment properties are derecognised either when they have been disposed of or when they
are permanently withdrawn from use and no future economic benefit is expected from their
disposal. The difference between the net disposal proceeds and the carrying amount of the
asset is recognised in the Consolidated Statement of Profit and Loss in the period of
derecognition.

(ii) Depreciation

Depreciation on Buildings classified as Investment Property is provided, under the Straight
Line Method, pro rata to the period of use, based on useful lives specified in Schedule II to
the Companies Act, 2013.

2.5 Taxes

a) The income tax expense or credit for the year is the tax payable on the current year''s taxable
income based on the applicable income tax rate as per the Income tax Act, 1961 adjusted by
changes in deferred tax assets and liabilities attributable to temporary differences and to unused
tax losses.

b) The current income tax charge is calculated on the basis of the tax laws enacted or substantively

enacted at the end of the reporting year. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.

c) Deferred income tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the corresponding amounts
used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses
and tax credits.

d) Deferred tax assets are recognised for all deductible temporary differences and unused tax losses

only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses. Therefore, in the case of a history of recent losses, the Company
recoganises the deferred tax asset to the extent that it has sufficient taxable temporary
differences or there is convincing other evidences that sufficient taxable profit will be available
against which such deferred tax can be realised.

e) Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets and liabilities and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the Company has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.

f) Current and deferred tax is recognised in the Statement of profit and loss, except to the extent

that it relates to items recognised in other comprehensive income or directly in equity and in this
case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.6 Property, plant and equipment

a) Freehold land is carried at historical cost. All other items of property, plant and equipment are
stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the assets. Cost may also include transfers from equity of any
gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant
and equipment.

b) Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured reliably. The carrying amount
of any component accounted for as a separate asset is derecognised when replaced. All other
repairs and maintenance are charged to the Statement of profit and loss during the reporting
year in which they are incurred.

(c) Depreciation methods, estimated useful lives and residual value-

Depreciation is calculated using the straight-line method to allocate their cost, net of their
residual values, over their estimated useful lives.

The useful lives have been determined based on those specified by Schedule II to the Companies
Act; 2013, in order to reflect the actual usage of the assets. The residual values are not more than
5% of the original cost of the asset.

The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting year.

(d) An asset''s carrying amount is written down immediately to its recoverable amount if the
asset''s carrying amount is greater than its estimated recoverable amount.

(e) Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in the Statement of profit and loss within other gains/ (losses).

2.7 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Subsequent to
initial recognition, intangible assets are carried at cost less any accumulated amortisation and
accumulated impairment losses. Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related expenditure is reflected in profit or loss
in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life
are reviewed at least at the end of each reporting year. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are
considered to modify the amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on intangible assets with finite lives
is recognised in the statement of profit and loss unless such expenditure forms part of carrying
value of another asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite life
is reviewed annually to determine whether the indefinite life continues to be supportable. If not,
the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses
arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the statement
of profit or loss when the asset is derecognised.

2.8 Leases

Ind AS 116 supersedes Ind AS 17, Leases including appendencies thereto. Ind AS 116 sets out the
principles for the recognition, measurement, presentation and disclosure of leases and requires
lessee to record all leases on the balance sheet with exemptions available for low value and short
term leases. At the commencement of a lease, a lessee recognises lease liability and an asset
representing the right to use the underlying asset during the lease term (i.e., the right-of-use
asset). Lessee subsequently reduces the lease liability when paid and recognises depreciation on
the right of-use asset. Lessee is required to separately recognise the interest expense on the lease
liability and the depreciation expense on the right-of-use asset. The standard has no impact on
the actual cash flows of the company.

2.9 Inventories

Raw materials and stores & spares are stated at cost (FIFO bases), work in progress are stated at
estimated cost, finished goods are stated at the lower of cost and net realisable value & material
in transit are stated at direct cost.

Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in- progress
and finished goods comprises direct materials, direct labour and an appropriate proportion of
variable and fixed overhead expenditure, the latter being allocated on the basis of normal
operating capacity. Cost of inventories also include all other costs incurred in bringing the
inventories to their present location and condition. Costs of purchased inventory are determined
after deducting rebates and discounts. 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.

2.10 Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is required,
the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the
higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value
in use. Recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted
share prices for publicly traded companies or other available fair value indicators.

Impairment losses of continuing operations, including impairment on inventories, are recognised
in the statement of profit and loss, except for properties previously revalued with the revaluation
surplus taken to OCI. For such properties, the impairment is recognised in OCI up to the amount
of any previous revaluation surplus.

For assets excluding goodwill, an assessment is made at each reporting date to determine
whether there is an indication that previously recognised impairment losses no longer exist or
have decreased. If such indication exists, the Company estimates the asset''s or CGU''s recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in
the assumptions used to determine the asset''s recoverable amount since the last impairment
loss was recognised. The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at
a revalued amount, in which case, the reversal is treated as a revaluation increase.

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Mar 31, 2014

1.a) CRIMSON METAL ENGINEARING COMPANY LIMITED is a Public Limited company. The company incorporated under companies'' act 1956 vides RC number L27105TN1985PLCO11566 issued by Register of companies (ROC) Tamilnadu. Its share is listed on stock exchanges in India. The Company is engaged in the manufacturing and selling of Black Pipe (ERW Pipe & G I Pipe) The factory is situated in Pipdic Industrial Estate, Sedarapet Puducherry – 605111.

b) The financial statements have been prepared in accordance with generally accepted accounting in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards as notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial Statements have been prepared under the historical cost convention on an accrual basis except in case of Land (freehold and leasehold).

1.1 Summary of significant accounting policies

a. Change in Presentation of financial statement:

During the year ended 31st march 2013, the revised schedule VI notified under the Companies Act1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principals followed for preparation of financial statements, however it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

b. Basis of Preparation of Financial Statements

The financial statement are prepared under historical cost conversion,in accordance with the generally accepted accounting principles in Indian and the provisions of the Companies Act, 1956.

c. Use of estimates.

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contigent liabilities, at the end of the reporting period. Although these estimates are based upon the management''s best knowledge of current events and actions, actual results could differ from these estimates. Uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

d. Tangible fixed assets.

Fixed assets, acquired are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

e. Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated pro rata from the date of addition using Straight Line Method (SLM) based upon the useful lives estimated by the management or those prescribed under the Schedule XIV to the Companies Act, 1956.

f. Borrowing costs

Borrowing cost includes interest. Borrowing costs directly attribute to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

g. Inventories

Raw materials, components, store and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a weighted average basis.

Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

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

h. Revenue Recognition

Revenue from sale of products is recognized when practically all significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits following to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. This usually occurs upon dispatch and collection of the receivable is reasonably certain.

Interest income is recognized on a time proportion basis, taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head ''other income'' in the statement of profit and loss.

i. Employee Benefits

Liability for employee benefits, both short and long term, which are due as per the terms of employment, are recorded in accordance with Accounting Standard -15(Revised) "Employee Benefits" notified by the Companies (Accounting Standards) Rules,2006.

a. In respect of Gratuity, the Company offers a non contributory defined benefit plan to its employees. Year end accrued liabilities of gratuity payable to employees are provided for Rs.5,11,035/- based on the liability as estimated by the management. This policy is not in accordance with the Revised Accounting Standard AS-15 "Employees Benefits".

b. Contribution to Provident Fund and other recognized fund is charged to profit and loss account.

c. Provision for Leave Encashment is not made as per Revised Accounting Standard AS-15 "Employees Benefits".

j. Income Taxes

Current Tax

Current tax is determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

k. Segment reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. The company primarily operates in single business segment which is Steel Tube (Skelp, Black pipe and GI pipe), and accordingly there are no primary segments to be reported as per Accounting Standard 17 "Segment Reporting".

l. Earning per share

Basic earnings per equity share is computed by dividing the net profit or loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the reporting period .

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

m. Foreign currency transactions

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 on the date of the transaction.

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 at the date of the 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 that existed when the values were determined.

Exchange Difference

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.

n. Custom & Excise Duty

Excise Duty on finished goods lying at the factory is accounted at point of sale or dispatch. Custom Duty on imported material lying in bonded warehouse is accounted for at the time of bonding materials.

o. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

p. Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the final statement.

q. Cash and cash equivalents

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

r. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance cost and tax expense.

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Mar 31, 2013

A. Change in Presentation of financial statement:

During the year ended 31st march 2012, the revised schedule VI notified under the Companies Act1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principals followed for preparation of financial statements, however it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

b. Basis of Preparation of Financial Statements

The financial statement are prepared under historical cost conversion,in accordance with the generally accepted accounting principles in Indian and the provisions of the Companies Act, 1956.

c. Use of estimates.

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon the management''s best knowledge of

current events and actions, actual results could differ from these estimates. Uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

d. Tangible fixed assets.

Fixed assets, acquired are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

e. Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated pro rata from the date of addition using Straight Line Method (SLM) based upon the useful lives estimated by the management or those prescribed under the Schedule XIV to the Companies Act, 1956.

f. Borrowing costs

Borrowing cost includes interest. Borrowing costs directly attribute to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

g. Inventories

Raw materials, components, store and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a weighted average basis.

Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

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

h. Revenue Recognition

Revenue from sale of products is recognized when practically all significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits following to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. This usually occurs upon dispatch and collection of the receivable is reasonably certain.

Interest income is recognized on a time proportion basis, taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head ''other income'' in the statement of profit and loss.

i. Employee Benefits

Liability for employee benefits, both short and long term, which are due as per the terms of employment, are recorded in accordance with Accounting Standard -15(Revised) "Employee Benefits" notified by the Companies (Accounting Standards) Rules,2006.

a. In respect of Gratuity, the Company offers a non contributory defined benefit plan to its employees. Year end accrued liabilities of gratuity payable to employees are provided for Rs.4,87,800/- based on the liability as estimated by the management. This policy is not in accordance with the Revised Accounting Standard AS-15 "Employees Benefits".

b. Contribution to Provident Fund and other recognized fund is charged to profit and loss account.

c. Provision for Leave Encashment is not made as per Revised Accounting Standard AS-15 "Employees Benefits".

j. Income Taxes Current Tax

Current tax is determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

k. Segment reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. The company primarily operates in single business segment which is Steel Tube (Skelp, Black pipe and GI pipe), and accordingly there are no primary segments to be reported as per Accounting Standard 17 "Segment Reporting".

l. Earnings per share

Basic earnings per equity share is computed by dividing the net profit or loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the reporting period .

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

m. Foreign currency transactions

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 on the date of the transaction.

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 at the date of the 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 that existed when the values were determined.

Exchange Difference

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.

n. Custom & Excise Duty

Excise Duty on finished goods lying at the factory is accounted at point of sale or dispatch. Custom Duty on imported material lying in bonded warehouse is accounted for at the time of bonding materials.

o. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

p. Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the final statement.

q. Cash and cash equivalents

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

r. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance cost and tax expense.

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Mar 31, 2012

A. Change in Presentation of financial statement:

During the year ended 31st march 2012, the revised schedule VI notified under the Companies Act1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principals followed for preparation of financial statements, however it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

b. Basis of Preparation of Financial Statements

The financial statement are prepared under historical cost conversion,in accordance with the generally accepted accounting principles in Indian and the provisions of the Companies Act, 1956.

c. Use of estimates.

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contigent liabilities, at the end of the reporting period. Although these estimates are based upon the management's best knowledge of current events and actions, actual results could differ from these estimates. Uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

d. Tangible fixed assets.

Fixed assets, acquired are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

e. Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated pro rata from the date of addition using Straight Line Method (SLM) based upon the useful lives estimated by the management or those prescribed under the Schedule XIV to the Companies Act, 1956.

f. Borrowing costs

Borrowing cost includes interest. Borrowing costs directly attribute to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

g. Inventories

Raw materials, components, store and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a weighted average basis.

Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

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

h. Revenue Recognition

Revenue from sale of products is recognized when practically all significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits following to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. This usually occurs upon dispatch and collection of the receivable is reasonably certain.

Interest income is recognized on a time proportion basis, taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head 'other income' in the statement of profit and loss.

i. Employee Benefits

Liability for employee benefits, both short and long term, which are due as per the terms of employment, are recorded in accordance with Accounting Standard -15(Revised) "Employee Benefits" notified by the Companies (Accounting Standards) Rules,2006.

a. In respect of Gratuity, the Company offers a non contributory defined benefit plan to its employees. Year end accrued liabilities of gratuity payable to employees are provided for Rs 3,82,800/ - based on the liability as estimated by the management. This policy is not in accordance with the Revised Accounting Standard AS-15 "Employees Benefits".

b. Contribution to Provident Fund and other recognized fund is charged to profit and loss account.

c. Provision for Leave Encashment is not made as per Revised Accounting Standard AS-15 "Employees Benefits".

j. Income Taxes

Current Tax

Current tax is determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

k. Segment reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. The company primarily operates in single business segment which is Steel Tube (Skelp, Black pipe and GI pipe), and accordingly there are no primary segments to be reported as per Accounting Standard 17 "Segment Reporting".

l. Earning per share

Basic earnings per equity share is computed by dividing the net profit or loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the reporting period .

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

m. Foreign currency transactions

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 on the date of the transaction.

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 at the date of the 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 that existed when the values were determined.

Exchange Difference

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.

n. Custom & Excise Duty

Excise Duty on finished goods lying at the factory is accounted at point of sale or dispatch. Custom Duty on imported material lying in bonded warehouse is accounted for at the time of bonding materials.

o. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

p. Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be

confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the final statement.

q. Cash and cash equivalents

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

r. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance cost and tax expense.

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Mar 31, 2011

1. BASIS OF ACCOUNTING

Accounts are prepared in accordance with generally accepted accounting principle. The Company adopts the accrual concept in the preparation of accounts as going concern.

2. FIXED ASSETS

Fixed Assets are stated at cost, inclusive of acquisition and installation expenses. Less cenvat credit and accumulated depreciation.

3. DEPRECIATION

Depreciation on all Assets is provided on Straight Line Method in accordance with schedule XIV of the Companies Act, 1956 as amended.

Depreciation is provided on pro rate basis from the day assets have been put to use till accounting year close and in the case assets sold up to the date of sale.

4.INVESTMENTS

Investment made in National Saving Certificates are stated at cost.

5.INVENTORIES

Inventories are valued as under-

Raw –Materials {including in process} At Cost {FIFO Method} Work -in-Progress At Cost Finished Goods At Cost or Market value whichever is lower. Scraps At realizable value

6. REVENUE RECOGNITION

a) Sales are shown at invoice price less excise duty, return and sales tax thereon.

b) Purchases are shown at Invoice Price Less return.

c) Expenses are accounted on accrual basis.

d) Interest on NSC shall be recognised on cash basis.

7. CENVAT

Cenvat credit is reckoned for on the materials purchased, stores and consumables entered into the factory premises.

8. EMPLOYEE RETIREMENT BENEFIT

The Company is contributing its contribution to Provident Fund Account as per Law and Rules applicable. Company's contribution towards provident fund is charged to Revenue

Year end accrued liabilities of Gratuity payable to employees are provided for based on the liability as estimated by the Management. This policy is not inaccordance with the Revised Accounting Standard AS-15 'Employees Benefits'.

Provision for leave encashment is made on the basis of company's rules and regulation.

9. FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are recorded on the basis of exchange rate prevailing at the date of transaction. Foreign currency monetary items are reported at the year end closing rates. Non monetary items which are carried out at hostorical cost are reported using the exchange rate prevailing at the date of the transaction.

The Exchange differences arising on settlement/year end restatement of monetary items are recognized in the profit and loss account in the period in which they arise.

10. DEFERRED TAX

The company has provided Rs.1.31 Lacs as deferred Liability in accordance with Accounting Standard -22 Accounting for Taxes on Income has been made on timing difference on account of Depreciation and gratuity at the Income tax rates prevailing during the year of Audit.

11. IMPAIRMENT OF ASSETS:

An asset is treated is impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired after considering adjustment already carried out.

12. SEGMENT REPORTING

In the opinion of the management, as the company producing Skelp, Black Pipe and GI Pipes the external revenue on sales of Skelp is NIL for the year. These Skelp are used for captive consumption so the activities are not considered reportable segment as per Account- ing Standard -17 "Segment Reporting".

13. SHARE CAPITAL & SHARE PREMIUM:

As per the order of BIFR, equity share capital has been reduced by 60% i.e. total paid up Equity share capital of Rs.50883750 shall stand reduced to Rs.20353500 by proportionate reduction in value of each equity share. As such total No of equity shares 5088375 reduced to 2035350. Further company has allotted 2392857 equity shares of Rs. 10 each at a premium of Rs. 4 per share.

Share Premium :

As per the instruction of BIFR share premium of Rs.39088375 has been written off against the accumulated loss of the company.

Revaluation Reserve :

Revaluation reserve of Rs.54403366 has been written off during the year. Accordingly the value of land Rs.32985012 and Building of Rs.21418354 has been reduced. Effect of this has been given in Schedule of Fixed Assets.

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Mar 31, 2010

1. BASIS OF ACCOUNTING

Accounts are prepared in accordance with generally accepted accounting principle. The Company adopts the accrual concept in the preparation of accounts as going concern.

2. FIXED ASSETS

Fixed Assets are stated at cost, inclusive of acquisition and installation expenses. Less cenvat credit and accumulated depreciation.

Land and Building were revalued for a sum of Rs.7,08,39,995/- by an independent registered valuer on fair market value concept and the value was incorporated in the accounts in that year.

3. DEPRECIATION

Depreciation on all Assets is provided on Straight Line Method in accordance with schedule XIV of the Companies Act, 1956 as amended.

Depreciation is provided on pro rate basis from the day assets have been put to use till accounting year close and in the case assets sold up to the date of sale.

The depreciation charge for the year shown in the Profit & Loss account is after deducting an amount of Rs.12.64 Lakhs (Previous Year 12.64 Lakhs) on account of depreciation of revalued building.

4.INVESTMENTS

Investment made in National Saving Certificates are stated at cost.

5.INVENTORIES

Inventories are valued as under-

Raw -Materials

{including in process} At Cost {FIFO Method}

Work -in-Progress At Cost

Finished Goods At Cost or Market value whichever

is lower.

Scraps At realizable value

6. REVENUE RECOGNITION

a) Sales are shown at invoice price less return and sales tax thereon.

b) Purchases are shown at Invoice Price Less return.

c) Expenses are accounted on accrual basis.

d) Interest on NSC shall be recognised on cash basis.

7. CENVAT

Cenvat credit is reckoned for on the materials purchased, stores and consumables entered into the factory premises.

8. EMPLOYEE RETIREMENT BENEFIT

The Company is contributing its contribution to Provident Fund Account as per Law and Rules applicable. Companys contribution towards provident fund is charged to Revenue

Year end accrued liabilities of Gratuity payable to employees are provided for based on the liability as estimated by the Management. This policy is not inaccordance with the Revised Accounting Standard AS-15 Employees Benefits.

Provision for leave encashment is made on the basis of company’s rules and regulation.

9. FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are recorded on the basis of exchange rate prevailing at the date of transaction. Foreign currency monetary items are reported at the year end closing rates. Non monetary items which are carried out at hostorical cost are reported using the exchange rate prevailing at the date of the transaction.

The Exchange differences arising on settlement/year end restatement of monetary items are recognized in the profit and loss account in the period in which they arise.

10. DEFERRED TAX

The company has provided Rs.1.49 Lacs as deferred Liability in accordance with Accounting Standard -22 Accounting for Taxes on Income has been made on timing difference on account of Depreciation and gratuity at the Income tax rates prevailing during the year of Audit

11. IMPAIRMENT OF ASSETS:

An asset is treated is impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired after considering adjustment already carried out.

12. SEGMENT REPORTING

In the opinion of the management, as the company producing Skelp, Black Pipe and GI Pipes the external revenue on sales of Skelp is NIL for the year. These Skelp are used for captive consumption so the activities are not considered reportable segment as per Accounting Standard -17 "Segment Reporting".

15.EARNING PER SHARE

Current Year Previous Year

Basic & Diluted Earnings 8.41 26.66

per share

Face Value of Equity Rs.10 Rs.10

Share