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APL Apollo Tubes
BSE: 533758|NSE: APLAPOLLO|ISIN: INE702C01019|SECTOR: Steel - Tubes/Pipes
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« Mar 13
Accounting Policy Year : Mar '14
1) Basis of Preparation of Financial Statement
 
 a) The financial statements have been prepared under the historical
 cost convention on an accrual basis of accounting in accordance with
 the Accounting Standard notified under section 211(3c) of the Companies
 Act, 1956 (which continues to be applicable in respect of Section 133
 of the Companies Act, 2013 in terms of general circular 15/2013 dated
 September 13, 2013 of the Ministry of Corporate Affairs)
 
 b) The Company follows mercantile system of accounting and recognizes
 income and expenditure on accrual basis.
 
 c) Expenditure incurred in connection with the issue of
 Shares/GDRs/warrants is written off against security premium account in
 the year of incurrence.
 
 d) All the 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 Schedule VI to the Companies Act, 1956. Based on
 the nature of the products and the time between the acquisition of the
 assets for processing and their realization in cash and cash
 equivalent, the Company has ascertained its operating cycle to be less
 than 12 months.
 
 2) Fixed Assets
 
 a) Fixed Assets are stated at cost net of duty credit availed less
 accumulated depreciation and impairments, if any.  The cost includes
 cost of acquisition/construction, installation and preoperative
 expenditure including trial run expenses (net of revenue) and borrowing
 costs incurred during pre-operation period. Expenses incurred on
 capital assets are carried forward as capital work in progress at cost
 till the same are ready for use.
 
 b) Pre-operative expenses, including interest on borrowings for the
 capital goods, where applicable incurred till the capital goods are
 ready for commercial production, are treated as part of the cost of
 capital goods and capitalized.
 
 c) Machinery spares which are specific to particular item of fixed
 assets and whose use is irregular are capitalized as part of the cost
 of machinery.
 
 3) Impairment of Assets
 
 The Company recognizes all the losses as per Accounting Standard-28 due
 to the impairment of assets in the year of review of the physical
 condition of the Assets and is measured by the amount by which, the
 carrying amount of the Asset exceeds the Fair Value of the Asset.
 
 4) Depreciation
 
 Depreciation on fixed assets is provided on straight-line basis at the
 rates specified under Schedule XIV of the Companies Act, 1956.
 Depreciation for assets purchased/sold during the period is
 proportionately charged.
 
 5) Inventories Valuation
 
 Raw material is valued at cost (First in First Out basis) or net
 realizable value whichever is lower. Finished Goods are valued at cost
 or net realizable value whichever is lower. Stock of Scrap is valued at
 net realizable value. Stock of Trading Goods is valued at Cost
 (Weighted Average/First in First Out basis).
 
 6) Foreign Exchange Transactions
 
 Foreign currency transactions are recorded at the rate of exchange
 prevailing on the date of transaction. All exchange differences are
 dealt within statement of profit and loss account. Current assets and
 current liabilities in foreign currency outstanding at the year end are
 translated at the rate of exchange prevailing at the close of the year
 and resultant gains/losses are recognized in the statement of profit
 and loss account of the year except in cases where they are covered by
 forward foreign exchange contracts in which cases these are translated
 at the contracted rates of exchange and the resultant gains/losses
 recognized in statement of profit and loss account over the life of the
 contract.
 
 7) Duties & Credits
 
 a) Excise Duty is accounted for at the time of clearance of goods
 except closing stock of finished goods lying at the works.
 
 b) Cenvat Credit, to the extent available during the year, are adjusted
 towards cost of materials.
 
 c) Duty credit on export sales has been taken on accrual basis whether
 license has been issued after closing of the financial year.
 
 8) Sales are inclusive of excise duty and after deducting the discount
 and also sales tax applicable and Purchase made against Bank Guarantee,
 Letter of Credit are classified in sundry creditor for raw materials.
 
 9) Retirement Benefits
 
 a) The company has provided for the retirement benefits as per the
 actuarial valuation under the Projected Unit Credit Method.
 
 b) Retirement benefits in the form of Provident Fund are charged to the
 Profit & Loss Account of the period when the contributions to the
 respective funds are due.
 
 10) Borrowing Cost
 
 Borrowing cost is charged to the Profit & Loss Account, except cost of
 borrowing for the acquisition of qualifying assets, which is
 capitalized till the date of commercial use of the assets.
 
 11) Taxes on Income
 
 Provision for current tax is made considering various allowances,
 disallowances and benefits available to the Company under the
 provisions of Income Tax Law.
 
 In accordance with Accounting Standard-22 Accounting for Taxes on
 Income issued by the Institute of Chartered Accountants of India,
 deferred taxes resulting from timing differences between book and tax
 profits are accounted for at tax rate substantively enacted by the
 Balance Sheet date to the extent the timing differences are expected to
 be crystallized.
 
 12) Misc. Expenditure
 
 Misc. expenditure represents ancillary cost incurred in connection with
 the incorporation and share issue expenses and brand promotion
 expenditure. It has been decided to write off these expenses over the
 period of five years.
 
 13) Revenue Recognition
 
 Sale of goods is recognized when the risk and reward of ownership are
 passed on to the customers. Revenue from services is recognized when
 the services are complete.
 
 14) Investments
 
 Long term investments, other than investment in Associates and
 Subsidiaries, are carried at cost less provision for permanent
 diminution, if any, in value of such investments. Current investments
 are carried at lower of cost and fair value. Income/Loss from
 investments is recognized in the year in which it is generated.
 
 15) Provision and Contingencies
 
 The company creates a provision when there is a present obligation as a
 result of past event that requires an outflow of resources and a
 reliable estimate can be made of the amount of obligation.
 
 A disclosure for a contingent liability is made when there is a present
 obligation that may require an outflow of resources or where a reliable
 estimate of such obligation cannot be made.
 
 16) Cash Flow Statement
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or 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 Group are segregated.
 
 17) Earnings per Share
 
 Basic earnings per share is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders (after
 deducting attributable taxes) by the weighted average number of equity
 shares outstanding during the period. For the purpose of calculating
 diluted earnings per share, the net profit or loss for the period
 attributable to equity shareholders and the weighted average number of
 shares outstanding during the period are adjusted for the effects of
 all dilutive potential equity shares.
 
 1,115,000 Equity shares were issued on August 13, 2013 upon conversion
 of equal number of warrants held by Mr. Ashok Kumar Gupta (a promoter
 group entity) out of total 1,500,000 warrants issued @ Rs. 145/- on
 Febuary 14, 2012. (earlier 385,000 warrants were converted in to equal
 number of Equity shares on March 23, 2013).
 
 3 Details of allotment of securities in the preceding 5 financial
 years:
 
 i) a) 4,281,000 Equity Shares were issued on conversion of 2,140,500
 warrants on January 23, 2008.
 
 b) 782,000 Equity Shares were issued on conversion of 391,000 warrants
 on April 28, 2008
 
 c) 787,000 Equity Shares were issued on conversion of 393,500 warrants
 on June 27, 2008.
 
 d) 370,000 Equity Shares were issued on conversion of 185,000 warrants
 on April 4, 2009
 
 These shares were issued on conversion of warrants. The Company issued
 3,175,000 warrants @ Rs. 140/- each to the promoters and other strategic
 investors entitling them for equal number of Equity Shares and one
 bonus share each against every warrant having nominal value of Rs. 10/-
 each (i.e. warrant holder were entitled for 2 Equity Shares against
 each warrant they have) within 18 months from the date of allotment
 i.e. July 5, 2007. Out of total 3,175,000 warrants, subscribers for
 65,000 share warrants didn''t exercised their option within 18 months of
 allotment of warrants and consequently, their initial subscription
 amount was forfeited.
 
 ii) 1,798,333 Equity shares has been issued to erstwhile shareholders
 of Shree Lakshmi Metal Udyog Limited for acquiring their 100% Equity
 shares in a non-cash deal [swap ratio 1 [One] Share of APL Apollo Tubes
 Limited for every 3 [Three] shares of Shri Lakshmi Metal Udyog Limited]
 on April 28, 2008.
 
 iii) Equity share issued as underlying security for GDR issue
 
 a) On June 18, 2008 2,941,200 Equity Shares were allotted as underlying
 securities for 1,470,600 Global Depository Receipts.
 
 b) On July 17, 2008 2,941,150 Equity Shares were allotted as underlying
 securities for 1,470,575 Global Depository Receipts.
 
 iv) Warrant Issue : 1,641,953 warrants were issued @ Rs. 176/- each
 warrant to promoters entitling them for equal number of Equity Shares
 having nominal value of Rs. 10/- each within 18 months from the date of
 allotment i.e.  December 22, 2010
 
 a) 1,000,000 Equity Shares were issued on conversion of equal no of
 warrants on March 13, 2012.
 
 b) 641,953 Equity Shares were issued on conversion of equal no of
 warrants on June 21, 2012.
 
 v) Warrant Issue : 1,500,000 warrants were issued @ Rs. 145/- each
 warrant to promoters entitling them for equal number of Equity Shares
 having nominal value of Rs. 10/- each within 18 months from the date of
 allotment i.e.  February 14, 2010
 
 a) 385,000 Equity Shares were issued on conversion of equal no of
 warrants on March 23, 2013.
 
 b) 1,115,000 Equity Shares were issued on conversion of equal no of
 warrants on August 13, 2013.
 
 
 Nature of Security : Bank term loans and working facilities are secured
 by first pari pasu charge on current assets, movable fixed assets,
 present and future, of the company and further secured by equitable
 mortgage on company''s land and building situated A-19 Industrial area
 Sikandarabad, U.P and at 332-338, Alur-Village, Perandapalli - Hosur on
 first pari pasu basis. These credit facilities are further collaterally
 secured by corporate guarantee and Land & Building of V S Exim Pvt.
 Ltd., situated at A-20 Industrial Area, Sikandrabad U.P. and Personal
 grantee of Mr Sameer Gupta, Mr. Vinay Gupta and Mr Sanjay Gupta
 (Promoter Directors). However Working Capital Limit for certain banks
 have been arranged against the security of all present and future
 movable fixed assets and current assets on first pari pasu charge basis
 (these Working Capital Limit do not have any charge on immovable fixed
 assets of the company and collaterals.
 
 Additional Information:
 
 Out of 5,895,000 Equity Shares of Shri Lakshmi Metal Udyog Limited,
 5,395,000 Equity Shares were acquired in a non-cash deal, wherein
 1,798,333 Equity shares of Rs. 10/- each j of APL Apollo Tubes Limited
 were issued to erstwhile shareholders of Shri Lakshmi Metal !  Udyog
 Limited [swap ratio 1 [One] share of APL Apollo Tubes Limited for every
 3 [Three]; shares of Shri Lakshmi Metal Udyog Limited] on April 28,
 2008 for acquiring their 100% ; shareholding. Aggregate amount for
 acquiring for these shares was Rs. 283.99 million calculated in
 accordance with SEBI Guidelines
 
 The closing stock of finished goods and scrap has been valued Inclusive
 of Excise Duty amounting to Rs. 62.49 million (Previous Year Rs. 57.78
 million) as per ASI-14 (Revised) issued by the Institute of Chartered
 Accountants of India.
Source : Dion Global Solutions Limited
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