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Accounting Policies of National General Industries Ltd. Company

Mar 31, 2015

(a) Tangible fixed assets

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price (net of CENVAT Credit), borrowing costs if capitalization criteria are met and directly attributable cost 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.

(b) Depreciation on tangible fixed assets

Depreciation on fixed assets is provided on Straight Line Method as per rates computed based on useful life prescribed in schedule II of the Companies Act, 2013. Depreciation on revalued fixed assets is directly charged to Revaluation Reserve. No depreciation is being provided on leasehold land. Effective from 1st April, 2014, the Company has charged depreciation based on following useful life of the assets as per the requirement of Schedule II of Companies Act, 2013 read with Guidance note issued by ICAI on Depreciation:-

Due to above, additional amount of depreciation is debited to profit and loss account by Rs. 15.56 lacs during the year and carrying amount of assets has accordingly been revised.

(c) Impairment

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

An impairment loss is recognized in the Statement of Profit and Loss if the carrying amount of an asset exceeds its recoverable amount.

(d) Use of estimates

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

(e) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit and Loss on a straight-line basis over the lease term.

(f) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.

(g) Borrowing Cost

Borrowing costs directly attributable 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.

(h) Inventories

Finished and semi-finished products produced and purchased by the Company are carried at lower of cost and net realizable value.

Work-in-progress is carried at lower of cost and net realizable value.

Raw materials purchased are carried at cost.

Store and spare parts are carried at cost.

Cost has been determined by using the FIFO method.

(i) Revenue Recognition

(i) Sale of goods: Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

(ii) Income from Services: Revenue from services is accounted for in accordance with the terms of contracts, as and when these services are rendered.

(iii) Interest: Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend: Dividend Income is recognized when right to receive is established.

(j) Retirement and other benefits

(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to respective funds are due. There are no other obligations other than the contribution payable to the fund.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit (PUC) method made at the end of each financial year.

(k) Income taxes

Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected to be paid to the income tax authorities in accordance with Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternate Tax (MAT) paid in during a year is charged to the statement of profit and loss as current tax. MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period i.e. for the period for which MAT credit is allowed to be carried forward.

(l) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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

(m) Contingent liability

Contingent liability is not provided for in the accounts and is recognized by way of notes.

(n) Amortization of Misc. Expenditure

Miscellaneous expenditure is amortized over a period of five years.


Mar 31, 2014

1. Corporate information

National General Industries Ltd. (''The Company'') is engaged in the production and selling of Steel. The Company has manufacturing facilities at Ghaziabad, U.P. and Bhiwadi, Rajasthan.

2. Basis of preparation

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

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.1 Summary of significant accounting policies

(a) Tangible fixed assets

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price (net of CENVAT Credit), borrowing costs if capitalization criteria are met and directly attributable cost 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.

(b) Depreciation on tangible fixed assets

Depreciation on fixed assets is provided on Straight Line Method as per rates computed based on estimated useful lives, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on revalued fixed assets is charged to Revaluation Reserve. No depreciation is being provided on leasehold land.

(c) Impairment

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

An impairment loss is recognized in the Statement of Profit and Loss if the carrying amount of an asset exceeds its recoverable amount.

(d) Use of estimates

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

(e) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit and Loss on a straight-line basis over the lease term.

(f) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost.

(g) Borrowing Cost

Borrowing costs directly attributable 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.

(h) Inventories

Finished and semi-finished products produced and purchased by the Company are carried at lower of cost and net realizable value.

Work-in-progress is carried at lower of cost and net realizable value.

Raw materials purchased are carried at cost.

Store and spare parts are carried at cost.

Cost has been determined by using the FIFO method.

(i) Revenue Recognition

(i) Sale of goods :Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

(ii) Income from Services :Revenue from services is accounted for in accordance with the terms of contracts, as and when these services are rendered.

(iii) Interest : Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend : Dividend Income is recognized when right to receive is established.

(j) Retirement and other benefits

(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to respective funds are due. There are no other obligations other than the contribution payable to the fund.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit (PUC) method made at the end of each financial year.

(k) Income taxes

Tax Expense comprises of current and deferred taxes. Current income tax is measured at the amount expected to be paid to the income tax authorities in accordance with Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred Tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternate Tax (MAT) paid in during a year is charged to the statement of profit and loss as current tax. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period i.e. for the period for which MAT credit is allowed to be carried forward.

(l) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(m) Contingent liability

Contingent liability is not provided for in the accounts and is recognized by way of notes.

(n) Amortisation of Misc. Expenditure

Miscellaneous expenditure is amortized over a period of five years.


Mar 31, 2013

(a) Tangible fixed assets

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price (net of CENVAT Credit), borrowing costs if capitalization criteria are met and directly attributable cost 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.

(b) Depreciation on tangible fixed assets

Depreciation on fixed assets is provided on Straight Line Method as per rates computed based on estimated useful lives, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on revalued fixed assets is directly charged to Revaluation Reserve. No depreciation is being provided on leasehold land.

(c) Impairment

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

An impairment loss is recognized in the Statement of Profit and Loss if the carrying amount of an asset exceeds its recoverable amount.

(d) Use of estimates

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

(e) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit and Loss on a straight?line basis over the lease term.

(f) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long?term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long?term investments are carried at cost.

(g) Borrowing Cost

Borrowing costs directly attributable 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.

(h) Inventories

Finished and semi?finished products produced and purchased by the Company are carried at lower of cost and net realizable value. Work?in?progress is carried at lower of cost and net realizable value. Raw materials purchased are carried at cost. Store and spare parts are carried at cost.

Cost has been determined by using the FIFO method.

(i) Revenue Recognition

(i) Sale of goods : Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

(ii) Income from Services : Revenue from services is accounted for in accordance with the terms of contracts, as and when these services are rendered.

(iii) Interest : Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend : Dividend Income is recognized when right to receive is established.

(j) Retirement and other benefits

(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to respective funds are due. There are no other obligations other than the contribution payable to the fund.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit (PUC) method made at the end of each financial year.

(k) Income taxes

Tax expense comprises of current and deferred taxes. Current income tax is measured at the amount expected to be paid to the income tax authorities in accordance with Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternate Tax (MAT) paid in during a year is charged to the statement of profit and loss as current tax. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period i.e. for the period for which MAT credit is allowed to be carried forward.

(l) Earnings Per Share

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

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

(m) Contingent liability

Contingent liability is not provided for in the accounts and is recognized by way of notes.

(n) Amortisation of Misc. Expenditure

Miscellaneous expenditure is amortized over a period of five years.

*Working Capital loans from banks are secured by first charge on all current assets of company, both present & future, including stocks of raw materials, finished and semi-finished goods and book debts of the Company. These facilities are further secured by collateral security of land of the company situated at 9th Milestone, Ghaziabad. The managing director and director has also given a personnel guarantee to the bank for this facility. The working capital loans are repayable on demand and carry interest @ 12.50 % p.a.


Mar 31, 2012

1.1 ACCOUNTING CONVENTION:

The Company follows the Mercantile System of accounting and recognizes Income & Expenditure on accrual basis unless specifically stated. The accounts are prepared on historical cost convention basis and follows the concept of going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.

1.2 FIXED ASSETS:

Fixed Assets are stated at cost net of CENVAT less accumulated depreciation. Capital work in progress is shown at cost. Cost includes all cost of construction, acquisition, installation, erection etc., and preoperative expenses directly related to the fixed assets, not yet commissioned.

1.3 DEPRECIATION:

Depreciation has been provided on original cost of the Assets including the amount of revaluation on the straight-line method basis at the rates prescribed by Sch.-XIV of the Companies Act, 1956 on daily pro-rata basis.

1.4 INVENTORIES :

(a) Raw Material & Stores and spares are valued at cost or market value whichever is lower.

(b) Cost has been determined by using the FIFO method.

(c) Finished Goods & Scrap is valued at net realizable value.

1.5 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are classified as Current Investments. All other investments are classified as Long Term Investment. All Investments are carried at cost. However, provision for diminution in value is made to recognize any decline, other than temporary in the value of the investments.

1.6 RETIREMENT BENEFITS:

The Company provides for gratuity covering all the eligible employees in accordance of the payment of Gratuity Act, 1972. In addition, employee''s benefits from provident fund, which is a defined contribution plan, both the employer and the employee make monthly contributions to this provident fund account which is recognized in the Profit and Loss Account after considering actuarial gain and losses and benefits paid during the year.

1.7 TAXATION:

Income Tax expenses comprise current tax, deferred tax, securities transaction tax. The deferred tax assets or liabilities resulting from "timing difference" between the book profit and taxable profit is recognized using current tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed as at each balance sheet date to reassess realization.

1.8 LEASE RENTAL PAYMENTS:

The Company has operating lease for the Registered Office premises that is renewable on a periodic basis. Operating lease payment is recognized as expense in the Profit & Loss Account on a straight-line basis over the lease term.

1.9 IMPAIRMENT OF ASSETS:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. All fixed assets as at the date of Balance Sheet are not more than its recoverable value; hence no provision is required to be made for impairment losses.

1.10 CONTINGENT LIABILITIES:

Contingent Liabilities are not provided for and are disclosed by way of notes.

1.11 AMORTIZATION OF MISCELLANEOUS EXPENDITURE:

Miscellaneous Expenditure is amortized over a period of 5 years.

1.12 REVENUE RECOGNITION

a) Dividend Income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

b) Sales is recognized when goods are dispatched from the factory and are stated at net of Cash Discounts, Shortages, Claims Settled, Rate Difference, Rebate Allowed to Customers, Textiles Committee Cess and fee but is inclusive Excise Duty.

1.13 BORROWING COSTS:

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 Profit and Loss account.

1.14 CASH FLOW :

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts of payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.


Mar 31, 2010

1. ACCOUNTING CONVENTION: The Company follows the Mercantile System of Accounting and recognizes Income & Expenditure on Accrual basis unless specifically stated. The Accounts are prepared on historical cost basis and follows the concept of going concern. Accounting Policies not referred to otherwise are consistent with generally accepted Accounting Principles.

2. FIXED ASSETS: Fixed Assets are stated at cost net of CENVAT less accumulated depreciation.

3. DEPRECIATION: Depreciation has been provided on original cost of the Assets including the amount of revaluation on the straight-line method basis at the rates prescribed by Sch.-XIV of the Companies Act, 1956 on daily pro-rata basis.

4. INVENTORIES:

a) Raw Material & Stores and spares are valued at cost or market value whichever is lower

b) Cost has been determined by using the FIFO method.

c) Finished Goods & Scrap is valued at net realizable value.

5. INVESTMENTS: Investments that are readily realizable and intended to be held for not more than a year are classified as Current Investments. All other investments are classified as Long Term Investment. All Investments are carried at cost. However, provision for diminution in value is made to recognize any decline, other than temporary in the value of the investments.

6. RETIREMENT BENEFITS: The Company provides for gratuity covering all the eligible employees in accordance of the payment of Gratuity Act, 1972. In addition, employees benefits from provident fund, which is a defined contribution plan, both the employer and the employee make monthly contributions to this provident fund account.

7. TAXATION: Income Tax expenses comprise current tax, deferred tax, securities transaction tax and fringe benefit tax. The deferred tax assets or liabilities resulting from "timing difference" between the book profit and taxable profit is recognized using current tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed as at each balance sheet date to reassess realization.

8. LEASE RENTAL PAYMENTS: The Company has operating lease for the Registered Office premises that is renewable on a periodic basis. Operating lease payment is recognized as expense in the Profit & Loss Account on a straight-line basis over the lease term.

9. IMPAIRMENT OF ASSETS: An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. All fixed assets as at the date of Balance Sheet are not more than its recoverable value; hence no provision is required to be made for impairment losses.

10. CONTINGENT LIABILITIES: Contingent Liabilities are not provided for and are disclosed by way of notes.

11. AMORTIZATION OF MISCELLANEOUS EXPENDITURE: Miscellaneous Expenditure is amortized over a period of 5 years.

12. BORROWING COSTS: 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 Profit and Loss account.



 
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