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Lloyds Metals and Energy
BSE: 512455|NSE: LLOYDMETAL|ISIN: INE281B01024|SECTOR: Steel - Sponge Iron
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« Mar 13
Accounting Policy Year : Mar '14
A) System of Accounting :
 
 The financial statements are prepared and presented 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 notified under sub-section (3C) of section 211 of
 the Companies Act, 1956 and the relevant provisions of the Companies
 Act, 1956.
 
 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 pre-operative expenses for the
 project incurred up to the date of commercial production are
 capitalized and apportioned to the cost of respective assets.
 
 C) Depreciation :
 
 Depreciation on all the assets has been provided on Straight Line
 Method as per Schedule XIV of the Companies Act, 1956. Lease hold land
 will be amortized on the expiry of Lease Agreement.
 
 D) Inventories :
 
 The general practice adopted by the company for valuation of inventory
 is as under :
 
 Raw materials       : *At lower of cost and net realizable value.
 
 Store & spares      : At cost (weighted average cost)
 
 Work in process     : At cost
 
 Finished goods      : At cost or net realizable value, which ever
                       is lower (Also refer Accounting Policy G)
 
 Traded goods        : At cost
 
 Scrap material      : At cost or net realizable value, which ever
                       is lower
 
 *Material and other supplies held for use in the production of the
 inventories are not written down below cost if the finished goods in
 which they will be incorporated are expected to be sold at or above
 cost.
 
 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 pre-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 premises. Excise duty is provided on
 the finished goods lying at the factory premises and not yet dispatched
 as at the year end as 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 prevalent 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) Contingent Liability :
 
 Unprovided Contingent Liabilities are disclosed in the accounts by way
 of notes giving the nature and quantum of such liabilities.
Source : Dion Global Solutions Limited
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