Home  »  Company  »  Tulsyan NEC Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Tulsyan NEC Ltd. Company

Mar 31, 2015

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies(Accounting Standards) Rules, 2006 as amended ('the Rules') and the relevant provisions of the Companies Act, 1956 ('the Act').

b. Accounting policies have been consistently applied by the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles (GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets & Capital work in Progress:

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in-progress comprises of amount paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) . Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act,1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iv) Cost of Leasehold land is amortised over the lease period.

v) Plant and Machinery and Furniture and Fittings which cost are less than Rs 5000/- each are depreciable at the rate of 100% in the year of purchase.

1.3 Retirement and other employee benefits: Defined contribution to provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.(AS 15).

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares At cost (Weighted Average)

Work-in-Progress

At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods

At material cost plus conversion cost on the basis of absorption costing (including of excise Duty payable)

REVENUE RECOGNITION:

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales are accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments:

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any. Current investments are valued at lower of cost and fair value.

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Financial Statements wherever practicable.

During the Financial Year, the company's loans and liabilities with the Banks were restructured under the "Corporate Debt Restructuring" Scheme. As per the said scheme, the company repayment obligations were deferred/ restructured. Further the Banks have provided certain reliefs/ sacrifices / waivers by reducing the rate of interest from applicable rates of each bank to 11% per annum. Interest on the restructured loans have been provided for in the books at lowered rates of interest. The Master restructuring Agreement entered into between the company and the banks' provides a "Right of Recompense" on the reliefs / sacrifices as per the CDR guidelines. The total value of such sacrifices / reliefs/ waivers as on 31st March 2015 is Rs.6.46 Crores.

The Company has executed (During the year 2009-10 and 2011-12) Corporate Guarantee in favour of the Shamrao Vithal Co-operative Bank Limited, Mumbai for the loan taken by M/s. Chitrakoot Steel and Power Pvt. Ltd., wholly owned subsidiary of the Company, for Rs. 25.00 Crores.

The Company received notices from Commercial Tax Department for reversing the ineligible Input tax credit taken for Rs. 64,43,869/-, Rs. 15,78,849/- and Rs. 50,19,598/- for the financial year 2011-12, 2012-13 and 2013-14 respectively. During the financial year 2014-15, the Company has reclassified the ineligible ITC and grouped in current asset, in the ledger under the account head VAT under protest and this has been quantified in Form WW. However the management is of opinion that the reversal of input tax credit need not be made in the Accounts for the aforesaid years.

1.9 Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.10 Foreign Exchange Transactions:

All foreign currency transactions are recorded at the average exchange rate prevailing during the transaction occurs. Outstanding balances of foreign currency monetary items are reported using the period end rates. Pursuant to the notification of the companies (Accounting Standard) amendment Rules 2009 issued by the Ministry of Corporate Affairs on March 31st, 2009 amending Accounting Standard-11 (AS-11), the effect of changes in Foreign Exchange Rates (Revised 2003), exchange difference relating to long term monetary items are dealt with in the following manner.

Exchange difference relating to long term monetary items, arising during the year, in so far as they relate to the acquisition of depreciable capital asset are added to/deducted from the cost of the assets and depreciated over the balance life of the asset.

In other cases, such difference are accumulated in the "Foreign Currency Translation Difference Account" and amortised to the profit and loss account over the balance life of the long term monetary item but not beyond 31st March, 2015.

All other exchange difference are recognized as income or expenses in the profit and loss account (discloses separately under the head Exceptional items in the Schedule-VI, Part-ll of the Companies Act, 1956). Foreign exchange transactions are as follows:

During the year foreign exchange transaction towards Royalty, know-how, professional fees & consultant fees were NIL. Hence not disclosed in the notes on accounts.


Mar 31, 2014

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies(Accounting Standards) Rules, 2006 as amended (''the Rules'') and the relevant provisions of the Companies Act, 1956 (''the Act'').

b. Accounting policies have been consistently applied by the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles (GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets & Capital work in Progress:

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in-progress comprises of amount paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

d. Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

i) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act,1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

ii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iii) Cost of Leasehold land is amortised over the lease period.

iv) Plant and Machinery and Furniture and Fittings which cost are less than Rs 5000/- each are depreciable at the rate of 100% in the year of purchase.

Depreciation

Type of asset Rate of Dep.

Land NIL

Factory buildings 3.34

Office premises 3.34

Plant and machinery:

Double shift 7.42

Triple Shift 10.34

Computer 16.21

Lab equipments 4.75

Office and other equipments 6.33

Vehicles 9.50

Amortisation

Type of assets Basis

Land Leasehold Period of lease

ERP software Straight line basis over a period of five years

1.3 Retirement and other employee benefits: Defined contribution to provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares

At cost (Weighted Average)

Work-in-Progress

At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods

At material cost plus conversion cost on the basis of absorption costing (including of excise Duty payable)

REVENUE RECOGNITION:

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales are accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments:

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any. Current investments are valued at lower of cost and fair value.

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Financial Statements wherever practicable.

Transactions As on 31.03.2014 As on 31.03.2013

Guarantees Outstanding 62.00 159.48

FLC with Bank Nil Nil

Entry Tax 80.44 80.44

Excise Duty 9.96 9.96

The Company has executed (during the year 2009-10 and 2011-12) Corporate Guarantee in favour of the Shamrao Vithal Co-operative Bank Limited, Mumbai for the loan taken by M/s. Chitrakoot Steel and Power Pvt. Ltd., wholly owned subsidiary of the Company, for Rs. 25.00 Crores

1.9 Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.10 Foreign Exchange Transactions:

All foreign currency transactions are recorded at the average exchange rate prevailing during the transaction occurs. Outstanding balance of foreign currency monetary items are reported using the period end rates. Pursuant to the notification of the companies (Accounting Standard) amendment Rules 2009 issued by the Ministry of Corporate Affairs on March 31st, 2009 amending Accounting Standard-11 (AS-11), the effect of changes in Foreign Exchange Rates (Revised 2003), exchange difference relating to long term monetary items are dealt with in the following manner:

Exchange difference relating to long term monetary items, arising during the year, in so far as they relate to the acquisition of depreciable capital asset are added to/deducted from the cost of the assets and depreciated over the balance life of the asset.

In other cases, such difference are accumulated in the "Foreign Currency Translation Difference Account" and amortised to the profit and loss account over the balance life of the long term monetary item but not beyond 31st March, 2012.

All other exchange difference are recognized as income or expenses in the profit and loss account (discloses separately under the head Exceptional items in the Schedule-VI, Part-II of the Companies Act, 1956). Foreign exchange transactions are as follows:

Transactions As on 31.03.2014 As on 31.03.2013

CIF Value of imports (Raw materials) 6287.75 4706.65

Earnings in foreign Exchange (FOB) 3620.88 3931.42

Exchange in Foreign currency for other matters 6.80 28.43

Interest paid on $ Loan - 203.67

Loan Paid - 4086.70

Tangible Assets in Capital Work-in-progress - 656.06

During the year foreign exchange transaction towards Royalty, know-how, professional fees & consultant fees were NIL. Hence not disclosed in the notes on accounts.


Mar 31, 2013

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies (Accounting Standards) Rules, 2006 as amended (''the Rules'') and the relevant provisions of the Companies Act, 1956 (''the Act'').

b. Accounting policies have been consistently applied the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles (GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets and Capital work-in-Progress

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in-progress comprises of advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act,1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iv) Cost of Leasehold land is amortised over the lease period.

v) Plant and Machinery and Furniture and Fittings which cost are less than Rs 5000/- each are depreciable at the rate of 100% in the year of purchase.

1.3 Retirement and other employee benefits:

Defined contribution to provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares : At cost (Weighted Average)

Work-in-Progress : At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods : At material cost plus conversion cost on the basis of absorption costing (including of excise Duty payable)

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales is accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any. Current investments are valued at lower of cost and fair value.

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Accounts wherever practicable.

The Company has executed (during the year 2009-10 and 2011-12) Corporate Guarantee in favour of the Shamrao Vithal Co-operative Bank Limited, Mumbai for the loan taken by M/s. Chitrakoot Steel and Power Pvt. Ltd., wholly owned subsidiary of the Company, for Rs.25.00 crores

1.9 Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.10 Foreign Exchange Transactions:

All foreign currency transactions are recorded at the average exchange rate prevailing during the transaction occur. Outstanding balance of foreign currency monetary items are reported using the period end rates. Pursuant to the notification of the companies (Accounting Standard) amendment Rules 2009 issued by the Ministry of Corporate Affairs on March 31st, 2009 amending Accounting Standard-11(AS-11), the effect of changes in Foreign Exchange Rates (Revised 2003), exchange difference relating to long term monetary items are dealt with in the following manner

Exchange difference relating to long term monetary items, arising during the year, in so far as they relate to the acquisition of depreciable capital asset are added to / deducted from the cost of the assets and depreciated over the balance life of the asset.

In other cases, such difference are accumulated in the "Foreign Currency Translation Difference Account" and amortised to the profit and loss account over the balance life of the long term monetary item but not beyond 31st March, 2013.

All other exchange difference are recognized as income or expenses in the profit and loss account (discloses separately under the head Exceptional items in the Schedule-VI, Part-II of the Companies Act, 1956). Foreign exchange transactions are as follows:


Mar 31, 2012

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies(Accounting Standards) Rules, 2006 as amended ('the Rules') and the relevant provisions of the Companies Act, 1956 ('the Act').

b. Accounting policies have been consistently applied by the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles (GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets and Capital work-in Progress

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in progress comprises of amount paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act, 1956 and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iv) Cost of Leasehold land is amortised over the lease period.

1.3 Retirement and other employee benefits:

Defined contribution to provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares : At cost (Weighted Average)

Work-in-Progress : At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods : At material cost plus conversion cost on the basis of absorption costing (including of excise Duty payable)

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales is accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any.

Current investments are valued at lower of cost and fair value.

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Financial Statements wherever practicable.

On 31/03/2012 On 31/03/2011

Guarantees Outstanding 76.08 142.38

FLC with Bank Nil 4813.67

Entry Tax 80.44 80.44

Excise Duty 9.96 9.96

The Company has executed (during the year 2009-10 and 2011-12) Corporate Guarantee in favour of the Shamrao Vithal Co-operative Bank Limited, Mumbai for the loan taken by M/s. Chitrakoot Steel and Power Pvt. Ltd., wholly owned subsidiary of the Company for Rs. 25.00 crores.

1.9 Cash and Cash Equivalents: Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.10 Foreign Exchange Transactions: All foreign currency transactions are recorded at the average exchange rate prevailing during the transaction occur. Outstanding balance of foreign currency monetary items are reported using the period end rates. Pursuant to the notification of the companies (Accounting Standard) amendment Rules 2009 issued by the Ministry of Corporate Affairs on March 31st ,2009 amending Accounting Standard-11(AS-11), the effect of changes in Foreign Exchange Rates(Revised 2003), exchange difference relating to long term monetary items are dealt with in the following manner.

Exchange difference relating to long term monetary items, arising during the year, in so far as they relate to the acquisition of depreciable capital asset are added to/deducted from the cost of the assets and depreciated over the balance life of the asset.

In other cases, such difference are accumulated in the " Foreign Currency Translation Difference Account" and amortised to the profit and loss account over the balance life of the long term monetary item but not beyond 31st March, 2012.


Mar 31, 2011

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies(Accounting Standards) Rules, 2006 as amended (''the Rules'') and the relevant provisions of the Companies Act, 1956 (''the Act'').

b. Accounting policies have been consistently applied by the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles ( GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets:

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in-progress comprises of advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act,1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iv) Cost of Leasehold land is amortised over the lease period.

v) Plant and Machinery and Furniture and Fittings which cost less than Rs 5000/- each are depreciable at the rate of 100% in the year of purchase.

1.3 Retirement and other employee benefits: Defined contribution to provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares : At cost ( Weighted Average)

Work-in-Progress : At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods : At material cost plus conversion cost on the basis of

absorption costing ( including of excise Duty payable)

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales is accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any. Current investments are valued at lower of cost and fair value.


Mar 31, 2010

1.1 Basis of preparation of Financial Statements

a. The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply in all material respects with mandatory accounting standard as notified by the Companies (Accounting Standards) Rules,2006 as amended (the Rules) and the relevant provisions of the Companies Act, 1956 ( the Act).

b. Accounting policies have been consistently applied by the company and the accounting policies not referred to otherwise, are in conformity with Generally Accepted Accounting Principles ( GAAP).

1.2 Fixed Assets and Depreciation

a. Fixed Assets:

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use. Own manufactured assets are capitalized inclusive of all direct costs and attributable overhead.

Capital work-in-progress comprises of advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use as at the balance sheet date.

Assets held for disposal are stated at the lower of net book value and the estimated net realizable value.

b. Financial costs incurred up to the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) Under WDV method on assets acquired up to 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and up to 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act, 1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756(E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve. iv) Cost of Leasehold land is amortised over the lease period.

v) Plant and Machinery and Furniture and Fittings which cost are less than Rs 5000/- each are depreciable at the rate of 100% in the year of purchase.

Schedules - (Continued)

1.3 Retirement and other employee benefits: Defined contribution io provident fund and employee state insurance are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective statutory authorities. Retirement benefits in the form of gratuity are considered as defined benefit obligation, and are provided in the year of separation.

1.4 Inventories

Raw materials, Components, Stores and Spares and Work-in-Progress are valued at cost. Finished goods are valued at cost or realizable value whichever is less. The basis of determining cost for various categories of inventories are as follows:

Raw Material, components, stores and spares : At cost ( Weighted Average)

Work-in-Progress : At Material cost plus Conversion cost on the basis of absorption costing

Finished Goods : At material cost plus conversion cost on the basis of absorption costing (including of excise Duty payable)

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and sale of raw materials, and are gross of duties. Consignment sales is accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis except rates & taxes, bonus on cash basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advance Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments:

Long Term Investments are carried at cost less provision for diminution in value other than temporary, if any. Current investments are valued at lower of cost and fair value.

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Accounts wherever practicable.

The company has executed Corporate Guarantee in favour of The Shamrao Vithal Co-operative Bank Limited, Mumbai for the loan taken by M/s. Chitrakoot Steel & Power Pvt. Ltd., wholly owned subsidiary of the Company, for Rs. 20.00 crores.

1.9 Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.10 Foreign Exchange Transactions:

All foreign currency transactions are recorded at the average exchange rate prevelling during the transation occur. Outstanding balance of foreign currency monetary items are reported using the period end rates. Pursuant to the notification of the companies ( Accounting Standard) amendment Rules 2009 issued by the Ministry of Corporate Affairs on March 31st ,2009 amending Accounting Standard-11 (AS-11), the effect of changes in Foreign Exchange Rates(Revised 2003), exchange difference relating to long term monetary items are dealt with in the following manner

Exchange difference relating to long term monetary items, arising during the year, in so far as they relate to the acquisition of depreciable capital asset are added to/deducted from the cost of the assets and depreciated over the balance life of the asset.

In other cases, such difference are accumulated in the " Foreign Currency Translation Difference Account" and amortised to»the profit and loss account over the balance life of the long term Monetary item but not beyond 31st March, 2011.

All other exchange difference are recognized as income or expenses in the profit and loss account (discloses separately under the head Exceptional items in the Sch-VI, Part-ll of the Companies Act, 1956). Foreign exchange transactions are as follows:


Mar 31, 2000

1.1 Basis of preparation of Financial statements

a. The accounts are prepared on historical cost convention and complies with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

b. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

1.2 Fixed Assets and Depreciation

a. Fixed Assets are stated at cost of acquisition or construction including directly attributable cost of bringing the assets to its working condition for the intended use less accumulated depreciation. Indirect expenditure during construction period has been apportioned to individual Fixed Assets in an equitable manner.

b. Financial costs incurred upto the date of commissioning of assets are capitalised.

c. Depreciation has been provided as follows:

i) Under WDV method on assets acquired upto 31.12.1985 at the then prevailing rates.

ii) Under SLM method on assets acquired after 31.12.1985 and upto 15.12.1993 at the rates as originally prescribed in Schedule XIV to the Companies Act 1956, and on assets acquired thereafter at the revised rates as per Notification GSR 756 (E) dated 16.12.1993.

iii) Depreciation on revaluation is adjusted against Revaluation Reserve.

iv) Cost of Leasehold land is amortised over the lease period.

v) Plant and Machinery and Furniture and Fittings where the individual value per item is less than Rs.5000 is written of during the year.

1.3 Treatment of retirement benefit

Liability in this regard is charged off to revenue in the year of separation. Hence liability on this account has not been provided for in the Statement of Accounts.

1.4 Inventories

Raw materials and Stores and Spares are valued at cost and Finished Goods at cost or market price whichever is less. The cost is inclusive of excise duties.

1.5 Sales

Sales comprises of sale of goods produced & purchased by the Company as also sales effected as agents and are net of duties and taxes. Consignment sales is accounted on receipt of consignment sale note from the consignee.

1.6 Revenue Recognition

All income and expenditure are recognised on accrual basis. Export benefits representing duty free imports of earlier years are accounted in proportion to materials consumed. The value of Advanced Licence on hand at the end of the year as certified by the management is incorporated in the books of accounts.

1.7 Investments are valued and stated at cost

1.8 Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes to the Accounts wherever practicable.

1.9 Preliminary (including expenses on expansion) / Public Issue expenses are being written off over a period of ten years.

1.10 Profit/Loss on sale of raw materials remains adjusted in the consumption thereof.

1.11 Foreign Exchange Transactions

All foreign currency transactions are recorded at the rates prevailing on the date of the transaction. All exchange differences are recognised as income/expense for the period.

9. Details of Secured loans

A. Loans from Banks secured by exclusive charge on land, buildings and plant and machinery other than those specifically charged and hypothecation of inventors and book debts and are guaranteed by the Managing Director and two Directors of the Company.

B. Term Loan from Financial Institution is secured by assets purchased under the loan and are guaranteed by the Managing Director and two Directors of the Company.

C. Other loans are secured by Hire Purchase/Hypothecation Agreements of vehicles and specific machinery and are guaranteed by the Managing Director.

10. Other current liabilities included Rs.0.07 lacs due to Directors (As at 31.03.99 Rs.0.36 lacs)

 
Subscribe now to get personal finance updates in your inbox!