Accounting Policies of Stelco Strips Ltd. Company

Mar 31, 2010

(A) Accounting Conventions

The accounts are prepared on accrual basics under the historical cost convention in accordance with the relevant provisions of the Companies Act,1956 & Accounting Standards stipulated by the Institute of Chartered Accountants of India.

(B) Sales

Sales of goods are recognized at the point of dispatch of finished goods to customers and include excise duty but net of returns.

(C) Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation. Cost of leasehold property is not amortized since the lease is for a long period.

(D) Depreciation

Depreciation is provided on Straight Line Method in accordance with the rates and manners specified in Schedule XIV of the Companies Act,1956.

(E) Inventories

i) Raw Materials, Components, Stores and Spares, Packing Materials and Work-in Process are valued

at cost. ii) Finished Goods are valued at cost or market price whichever is less. iii) Scrap is valued at realizable value.

(F) Excise Duty

Cenvat(Modvat) credit on excise duty paid inputs and capital assets is accounted for by reducing the purchase cost of the related inputs or the capital assets as the case may be. No effect is given for excise on finished goods stock at year end, as this has no impact on the profit/loss of the company.

(G) Income Tax

Provision for current tax is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act,1961. If any extra demand is raised by income tax authorities that is accounted for in the year of payment/final adjustment.

(H) Borrowing Cost

Borrowing Costs that are directly attributed to acquisition, construction or production of qualifying assets are capitalized as a part of cost of the assets. Other borrowing costs are recognized as an expense in the year in which they incurred.

(I) Retirement Benefits

Contributions are made under the relevant rules/statues for provident fund and family pension fund and gratuity which are charged to the profit & loss account on accrual basis.

(J) Investments

Investments are carried at cost.