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Accounting Policies of A Infrastructure Ltd. Company

Mar 31, 2014

A INFRASTRUCTURE LIMITED (the 'Company') is a public limited company domiciled in India and is listed on the Jaipur Stock Exchange (JSE) and the Delhi Stock Exchange (DSE). The Company is incorporated on 30/08/1980 and formerly known as 'Shree Pipes Ltd.' The Company is mainly engaged in the business of manufacturing and laying & jointing of Asbestos Cement Products.

1.1 Basis of Preparation of Financial Statements

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof. All assets and liabilities have been classified as current or non- current as per the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

1.2 Use of Estimates

The preparation and presentation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the Financial Statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates is recognized in the period in which results are known/ materialized.

1.3 Fixed Assets

(i) Lease hold Land, Building, Plant & Machinery, Laboratory Equipments and Electrical Installation as on 01.04.2002 are being stated at revalued amount and additions being made thereafter are stated at cost.

(ii) All other Fixed Assets are being stated at cost.

(iii) In case of expansion of Project, direct expenses including borrowing cost attributable to the qualifying assets are being capitalized as part of the cost of assets. Indirect expenses relating to the expansion have been capitalized and added pro rata to the cost of respective assets. Any addition of machinery in Plant has been taken at cost including direct expenditure.

1.4 Depreciation

(i) Depreciation on fixed assets is provided on straight-line method at the rates and manner specified in Schedule XIV of the Companies Act, 1956. Further, in the year of sale of Fixed Assets, depreciation is charged on proportionate basis till the date of its transfer.

(ii) Full amount of depreciation including on revalued assets is being charged to Profit & Loss account (See Note 33) up to financial year 2004-05. However from the financial year 2005-06, the depreciation on the revalued amount is charged from revaluation reserve.

(iii) Depreciation on fixed assets arising due to exchange rate fluctuations is charged during the residual life of such assets.

(iv) Leasehold land is being amortized over the period of lease.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.6 Investments

Current Investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of Long-Term Investments is made only if such a decline is other than temporary.

1.7 Claims

Claims are accounted for on receipt basis.

1.8 Inventory Valuation

(i) Inventories are valued at lower of cost and net realizable value.

(ii) The Cost of Raw materials, stores, components at factories are taken at weighted average rate, after providing for obsolescence. Spares of irregular use are written off over the life of original equipment.

(iii) The cost of Finished Goods is determined by taking material, labor and related factory overheads including depreciation on Fixed Assets. The cost of work in process is taken at material cost and stage-wise overhead cost including depreciation on Fixed Assets.

(iv) Excise duty payable on the stock of finished goods has been added to the value of stock as per guidelines issued by ICAI.

1.9 Work Contracts

Revenue in respect of Work Contracts, execution of which is spread over different accounting periods, is recognized on the basis of percentage of completion method in accordance with Accounting Standard 7- "Accounting for Construction Contracts". As per this method, the revenue is recognized in proportion to the actual cost incurred as against the total estimated cost of the project under execution with the Company. Difference between costs incurred plus recognized profit / less recognized losses and the total amount of progress billings is treated as Work-in-progress.

Determination of revenue under the percentage of completion method necessarily involves making estimates by the Company, some of which are of technical nature, relating to the percentage of completion, costs to completion, expected revenue from the contract and the foreseeable losses to completion.

The Company has adopted "percentage of completion method" for working out profit/loss on works contracts undertaken to comply with the guidelines stated in AS-7.

An expense which may occur during warranty period will be charged to Statement of Profit and Loss in the year of occurrence only.

1.10 Employee Benefits

Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under:- (i) Short Term Employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and

Loss account of the year in which they are incurred. (ii) Employee benefits under defined contribution plans comprise of contribution to Provident Fund. Contributions to

Provident Fund are deposited with appropriate authorities and charged to Statement of Profit & Loss account. (iii) Employee Benefits under defined benefits plans comprise of gratuity & leave encashment which are accounted for as at the yearend based on accrual/actuarial valuation by following the Projected Unit Credit (PUC) method.

1.11 Sales

(i) Sales include excise duty, escalation claims, transport and delivery charges, but net of sales return, trade discount, sales tax and transit loss.

(ii) Commission on sales is accounted for as and when due after dispatch of Goods and collection charges are ac- counted for as and when a payment is collected.

1.12 Deferred Taxation

(i) Tax provision is made, in accordance with the Income Tax Act, 1961 including the provisions regarding Minimum

Alternate Tax and the contentions of the Company and also the fact that certain expenditure becoming allowable on payment being made before filing of the return of income. (ii) The Company has recognized deferred tax, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax asset on account of timing differences is recognized only to the extent there is a reasonable certainty of its realization.

1.13 Foreign Exchange Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of such transaction. Exchange fluctuations on foreign currency transactions other than those related to fixed assets and loans are charged to Statement of Profit & Loss account. Exchange fluctuations on foreign currency loans are apportioned to the original cost of assets acquired through such loans. Other assets & liabilities are converted at the rates prevailing at the end of the year.

1.14 Lease Accounting

The assets acquired on lease where a significant portion of the risk and rewards of ownership is retained by the less or are classified as operating leases. Leave and license fees are charged to the Statement of Profit & Loss Account on accrual basis.

1.15 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss account.

1.16 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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.

1.17 The earnings considered in ascertaining the Company's Earnings Per Share ('EPS') comprise the net profit after tax after reckoning of dividend to equity and preference shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.


Mar 31, 2013

1.1 Basis of Preparation of Financial Statements

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof. Ail assets and liabilities have been classified as current or non- current as per the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

1.2 Use of Estimates

The preparation and presentation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the Financial Statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates is recognized in the period in which results are known/ materialized.

1.3 Fixed Assets

(i) Lease hold Land, Building, Plant & Machinery, Laboratory Equipments and Electrical Installation as on 01.04.2002 are being stated at revalued amount and additions being made thereafter are stated at cost.

(ii) All other Fixed Assets are being stated at cost.

(iii) In case of expansion of Project, direct expenses including borrowing cost attributable to the qualifying assets are being capitalized as part of the cost of assets. Indirect expenses relating to the expansion have been capitalized and added pro rata to the cost of respective assets. Any addition of machinery in Plant has been taken at cost including direct expenditure.

1.4 Depreciation

(i) Depreciation on fixed assets is provided on straight-line method at the rates and manner specified in Schedule XIV of the Companies Act, 1956. Further, in the year of sale of Fixed Assets, depreciation is charged on proportionate basis till the date of its transfer.

(ii) Full amount of depreciation including on revalued assets is being charged to Profit & Loss account (See Note 34) up to financial year 2004-05. However from the financial year 2005-06, the depreciation on the revalued amount is charged from revaluation reserve.

(iii) Depreciation on fixed assets arising due to exchange rate fluctuations is charged during the residual life of such assets.

(iv) Leasehold land is being amortized over the period of lease.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.6 Investments

Current Investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term investments are stated at cost. Provision for diminution in the value of Long-Term Investments is made only if such a decline is other than temporary.

1.7 Claims

Claims are accounted for on receipt basis.

1.8 Inventory Valuation

(i) Inventories are valued at lower of cost and net realizable value.

(ii) The Cost of Raw materials, stores, components at factories are taken at weighted average rate, after providing for obsolescence. Spares of irregular use are written off over the life of original equipment.

(iii) The cost of Finished Goods is determined by taking material, labour and related factory overheads including depreciation on Fixed Assets. The cost of work in process is taken at material cost and stage-wise overhead cost including depreciation on Fixed Assets.

(iv) Excise duty payable on the stock of finished goods has been added to the value of stock as per guidelines issued by ICAI.

1.9 Work Contracts

Revenue in respect of Work Contracts, execution of which is spread over different accounting periods, is recognized on the basis of percentage of completion method in accordance with Accounting Standard 7- "Accounting for Construction Con- tracts". As per this method, the revenue is recognized in proportion to the actual cost incurred as against the total estimated cost of the project under execution with the Company.

Difference between costs incurred plus recognized profit / less recognized losses and the total amount of progress billings is treated as Work-in-progress.

Determination of revenue under the percentage of completion method necessarily involves making estimates by the Company, some of which are of technical nature, relating to the percentage of completion, costs to completion, expected revenue from the contract and the foreseeable losses to completion.

The Company has adopted "percentage of completion method" for working out profit/loss on works contracts undertaken to comply with the guidelines stated in AS-7.

An expense which may occur during warranty period will be charged to Statement of Profit and Loss in the year of occurrence only.

1.10 Employee Benefits

Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under:-

(i) Short Term Employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss account of the year in which they are incurred.

(ii) Employee benefits under defined contribution plans comprise of contribution to Provident Fund. Contributions to Provident Fund are deposited with appropriate authorities and charged to Statement of Profit & Loss account.

(iii) Employee Benefits under defined benefits plans comprise of gratuity & leave encashment which are accounted for as at the yearend based on accrual/actuarial valuation by following the Projected Unit Credit (PUC) method.

1.11 Sales

(i) Sales include excise duty, escalation claims, transport and delivery charges, but net of sales return, trade discount, sales tax and transit loss.

(ii) Commission on sales is accounted for as and when due after dispatch of Goods and collection charges are ac- counted for as and when a payment is collected.

1.12 Deferred Taxation

(i) Tax provision is made, in accordance with the Income Tax Act, 1961 including the provisions regarding Minimum Alternate Tax and the contentions of the Company and also the fact that certain expenditure becoming allowable on payment being made before filing of the return of income.

(ii) The Company has recognized deferred tax, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset on account of timing differences is recognized only to the extent there is a reasonable certainty of its realization.

1.13 Foreign Exchange Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of such transaction. Exchange fluctuations on foreign currency transactions other than those related to fixed assets and loans are charged to Statement of Profit & Loss account. Exchange fluctuations on foreign currency loans are apportioned to the original cost of assets acquired through such loans. Other assets & liabilities are converted at the rates prevailing at the end of the year.

1.14 Lease Accounting

The assets acquired on lease where a significant portion of the risk and rewards of ownership is retained by the less or are classified as operating leases. Leave and license fees are charged to the Statement of Profit & Loss Account on accrual basis.

1.15 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss account.

1.16 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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.

1.17 The earnings considered in ascertaining the Company's Earnings Per Share ('EPS') comprise the net profit after tax after reckoning of dividend to equity and preference shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.


Mar 31, 2012

1.1 Fixed Assets

(i) Lease hold Land, Building, Plant & Machinery, Laboratory Equipments and Electrical Installation as on 01.04.2002 are being stated at revalued amount and additions being made thereafter are stated at cost.

(ii) All other Fixed Assets are being stated at cost.

(iii) In case of expansion of Project, direct expenses including borrowing cost attributable to the qualifying assets are being capitalized as part of the cost of assets. Indirect expenses relating to the expansion have been capitalized and added pro rata to the cost of respective assets. Any addition of machinery in Plant has been taken at cost including direct expenditure.

1.2 Depreciation

(i) Depreciation on fixed assets is provided on straight-line method at the rates and manner specified in Schedule XIV of the Companies Act, 1956.

(ii) Full amount of depreciation including on revalued assets is being charged to Profit & Loss account (See Note 34) up to financial year 2004-05. However from the financial year 2005-06, the depreciation on the revalued amount is charged from revaluation reserve.

(iii) Depreciation on fixed assets arising due to exchange rate fluctuations is charged during the residual life of such assets.

(iv) Leasehold land is being amortized over the period of lease.

1.3 Investments

Investments are being carried at cost.

1.4 Claims

Claims are accounted for on receipt basis.

1.5 Inventory Valuation

(i) Inventories are valued at lower of cost and net realizable value.

(ii) The Cost of Raw materials, stores, components at factories are taken at weighted average rate, after providing for obsolescence. Spares of irregular use are written off over the life of original equipment.

(iii) The cost of Finished Goods is determined by taking material, labor and related factory overheads including depreciation on Fixed Assets. The cost of work in process is taken at material cost and stage-wise overhead cost including depreciation on Fixed Assets.

(iv) Excise duty payable on the stock of finished goods has been added to the value of stock as per guidelines issued by ICAI. .

1.6 Work Contracts

Revenue in respect of Work Contracts, execution of which is spread over different accounting periods, is recognized on the basis of percentage of completion method in accordance with Accounting Standard 7- "Accounting for Construction Con- tracts". As per this method, the revenue is recognized in proportion to the actual cost incurred as against the total estimated cost of the project under execution with the Company.

Difference between costs incurred plus recognized profit / less recognized losses and the total amount of progress billings is treated as Work-in-progress.

Determination of revenue under the percentage of completion method necessarily involves making estimates by the company, some of which are of technical nature, relating to the percentage of completion, costs to completion, expected revenue from the contract and the foreseeable losses to completion.

The company has adopted "percentage of completion method" for working out profit/loss on works contracts undertaken to comply with the guidelines stated in AS-7.

1.7 Employee Benefits

Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under:-

(i) Short Term Employee benefits are recognized as expenses at the undiscounted amount in the Profit and Loss account of the year in which they are incurred.

(ii) Employee benefits under defined contribution plans comprise of contribution to Provident Fund. Contributions to Provident Fund are deposited with appropriate authorities and charged to Profit & Loss account.

(iii) Employee Benefits under defined benefits plans comprise of gratuity & leave encashment which are accounted for as at the yearend based on accrual/actuarial valuation by following the Projected Unit Credit (PUC) method.

1.8 Sales

(i) Sales include excise duty, escalation claims, transport and delivery charges, but net of sales return, trade discount, sales tax and transit loss.

(ii) Commission on sales is accounted for as and when due after dispatch of Goods and collection charges are accounted for as and when a payment is collected.

1.9 Deferred Taxation

The company has recognized deferred tax, on timing differences, being the difference between taxable incomes and ac- counting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset on account of timing differences is recognized only to the extent there is a reasonable certainty of its realization.

1.10 Foreign Exchange Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of such transaction. Exchange fluctuations on foreign currency transactions other than those related to fixed assets and loans are charged to profit & loss account. Exchange fluctuations on foreign currency loans are apportioned to the original cost of assets acquired through such loans. Other assets & liabilities are converted at the rates prevailing at the end of the year.

1.11 Lease Accounting

The assets acquired on lease where a significant portion of the risk and rewards of ownership is retained by the less or are classified as operating leases. Leave and license fees are charged to the Profit & Loss Account on accrual basis.

 
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