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Moneycontrol.com India | Accounting Policy > Steel - Tubes/Pipes > Accounting Policy followed by APL Apollo Tubes - BSE: 533758, NSE: APLAPOLLO
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APL Apollo Tubes
BSE: 533758|NSE: APLAPOLLO|ISIN: INE702C01019|SECTOR: Steel - Tubes/Pipes
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« Mar 12
Accounting Policy Year : Mar '13
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-1 Referred to in section 211 (3c) of the
 Companies Act, 1956.
 
 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.
Source : Dion Global Solutions Limited
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