NOTE NO. 2 : NOTES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH, 2016 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2016.

1. SIGNIFICANT ACCOUNTING POLICIES

A) System of Accounting :

The financial statements are brpared and brsented under the historical cost convention on the accrual basis of accounting in accordance with accounting principal generally accepted in India and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013 as applicable.

B) Fixed Assets :

i) All fixed assets are valued at cost net of Cenvat unless if any assets are revalued and for which proper disclosure is made in the Accounts.

ii) In the case of ongoing projects, all br-operative expenses for the project incurred up to the dates of commercial production are capitalized and apportioned to the cost of respective assets.

C) Debrciation :

Debrciation on all the assets has been provided on Straight Line Method ("SLM") as per Schedule II of the Companies Act, 2013. Assets individually costing ` 5,000 or less are debrciated fully in the year of purchase 

E) Investments :

Investments are valued at cost of acquisition, which includes charges such as Brokerage, Fees and Duties.

F) Expenditure during construction period:

Expenditure incurred on projects under implementation are being treated as br-operative expenses pending allocation to the assets which are being apportioned on commencement of commercial production.

G) Excise Duty :

The Excise duty payable on finished goods dispatches is accounted on the clearance thereof from the factory brmises. Excise duty is provided on the finished goods lying at the factory brmises and not yet dispatched as at the year endas per the Accounting Standard 2 "Valuation of Inventories".

H) Customs Duty :

Customs Duty payable on imported raw materials, components and stores and spares is recognized to the extent assessed by the customs department.

I) Foreign Currency Transaction :

Foreign currency transactions during the accounting year are translated at the rates brvalent on the transaction date. Exchange differences arising from foreign currency fluctuations are dealt with on the date of payment/ receipt. Assets and Liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the year end rate. The exchange difference is credited / charged to Profit & Loss Account in case of revenue items and capital items.

J) Provision for Gratuity :

Provision for Gratuity is made on the basis of actuarial valuation based on the provisions of the Payment of Gratuity Act, 1972.

K) Leave Salary :

Provision is made for value of unutilized leave due to employees at the end of the year.

L) Customs Duty Benefit :

Customs duty entitlement eligible under pass book scheme / DEPB is accounted on accrual basis. Accordingly, import duty benefits against exports affected during the year are accounted on estimate basis as incentive till the end of the year in respect of duty free imports of raw material yet to be made.

M) Amortization of Expenses :

i) Equity Issue Expenses :

Expenditure incurred in equity issue is being treated as Deferred Revenue Expenditure to be amortized over a period of ten years.

ii) Preliminary Expenses:

Preliminary expenses are amortized over a period of ten years.

iii) Debenture Issue Expenses:

Debenture Issue expenditure is amortized over the period of the Debentures.

N) Impairment of Assets :

The Company determines whether a provision should be made for impairment loss on fixed assets (including Intangible Assets), by considering the indications that an impairment loss may has occurred in accordance with Accounting Standard – 28 "Impairment of Assets". Where the recoverable amount of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is made.

O) Revenue Recognition :

Sales/Income of contracts/orders are booked based on work billed. Sales are net of sales return & trade discounts.

P) Certified Emission Reductions (CER’S ) and Energy Savings certificate (ESCerts’):

During the year, the Company has received CER’s (Certified Emission Reductions) of 71,302 units and Energy Savings certificate (ESCerts) of 27,896 Nos.

The management has estimated to value the CER’s @ 0.30 Euro per unit and ESCerts’ @ ` 3,000 per Certificate. It has been disclosed in Inventories. 

10. During the year power division sales includes sale of power amounting to ` 765.06 lacs at selling price to sponge iron division (Previous year ` 773.57Lacs).

11. The Company has no information as to whether any of its suppliers constitute micro, Small & medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

12. Additional information pursuant to the provisions of Part I of Schedule III to the Companies Act, 2013. 

13. Previous year figures have been regrouped and recast wherever necessary to confirm to the classification of the current year as per the revised Schedule III of the Companies Act 2013.