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APL Apollo Tubes
BSE: 533758|NSE: APLAPOLLO|ISIN: INE702C01019|SECTOR: Steel - Tubes & Pipes
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Mar 14
Accounting Policy Year : Mar '15
 1.1 Basis of Preparation of Financial Statement
 
 The financial statements of the Company have been prepared in
 accordance with the Generally Accepted Accounting Principles in India
 (Indian GAAP) to comply with the Accounting Standards specified under
 Section 133 of the Companies Act. 2013, read with Rule 7 of the
 Companies (Accounts) Rules, 2014 and relevant provisions of the
 Companies Act, 2013 (the 2013 Act) / Companies Act, 1956 (the 1956
 Act), as applicable. The financial statements have been prepared on
 accrual basis under the historical cost convention. The accounting
 policies adopted in the preparation of the financial statements are
 consistent with those followed in the previous year except for change
 in the accounting policy for depreciation as more fully described in
 Note 27.
 
 1.2 Operating Cycle
 
 Based on the nature of products / activities of the Company and the
 normal time between acquisition of assets and their realization in cash
 or cash equivalents, the Company has determined its operating cycle as
 12 months for the purpose of classification of its assets and
 liabilities as current and non-current.
 
 1.3 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.
 
 1.4 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.
 
 1.5 Inventories Valuation
 
 Inventories are valued at the lower of cost (First in First Out -FIFO
 method ) and the net realizable value after providing for obsolescence
 and other losses, where considered necessary. Cost includes all charges
 in bringing the goods to the point of sale, including octroi and other
 levies, transit insurance and receiving charges. Work-in-progress and
 finished goods include appropriate proportion of overheads and, where
 applicable, excise duty.
 
 1.6 Depreciation
 
 Depreciable amount for assets is the cost of an asset, or other amount
 substituted for cost, less its estimated residual value.
 
 Depreciation on tangible fixed assets have been provided on the
 straight-line method as per the useful life prescribed in Schedule II
 to the Companies Act, 201 3 except in respect of the following
 categories of assets, in whose case the life of assets has been
 assessed under based on technical advice, taking into account the
 nature of the asset, the estimated usage of the asset, the operating
 conditions of the asset, past history of replacement, anticipated
 technological changes, manufactures warranties and maintenance support,
 etc.
 
 General Plant Machinery - 20 Years
 Factory Shed and Building - 30 Years
 Office Equipment - 20 Years
 Vehicle - 1 0 Years
 Furniture and Fittings- 15 Years
 Computer - 6 Years
 Software - 6 Years
 
 1.7 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.
 
 1.8 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.
 
 1.9 Borrowing Cost
 
 Borrowing costs include interest; amortisation of ancillary costs
 incurred and exchange differences arising from foreign currency
 borrowings to the extent they are regarded as an adjustment to the
 interest cost. Costs in connection with the borrowing of funds to the
 extent not directly related to the acquisition of qualifying assets are
 charged to the Statement of Profit and Loss over the tenure of the
 loan. Borrowing costs, allocated to and utilised for qualifying assets,
 pertaining to the period from commencement of activities relating to
 construction / development of the qualifying asset upto the date of
 capitalisation of such asset are added to the cost of the assets.
 Capitalisation of borrowing costs is suspended and charged to the
 Statement of Profit and Loss during extended periods when active
 development activity on the qualifying assets is interrupted.
 
 1.10 Taxes on Income
 
 Current tax is the amount of tax payable on the taxable income for the
 year as determined in accordance with the applicable tax rates and the
 provisions of the Income Tax Act, 1961 and other applicable tax laws.
 
 Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
 gives future economic benefits in the form of adjustment to future
 income tax liability, is considered as an asset if there is convincing
 evidence that the Company will pay normal income tax. Accordingly, MAT
 is recognised as an asset in the Balance Sheet when it is highly
 probable that future economic benefit associated with it will flow to
 the Company.
 
 Deferred tax is recognised on timing differences, being the differences
 between the taxable income and the accounting income that originate in
 one period and are capable of reversal in one or more subsequent
 periods. Deferred tax is measured using the tax rates and the tax laws
 enacted or substantively enacted as at the reporting date. Deferred tax
 liabilities are recognised for all timing differences. Deferred tax
 assets are recognised for timing differences of items other than
 unabsorbed depreciation and carry forward losses only to the extent
 that reasonable certainty exists that sufficient future taxable income
 will be available against which these can be realised. However, if
 there is unabsorbed depreciation and carry forward of losses and items
 relating to capital losses, deferred tax assets are recognised only if
 there is virtual certainty supported by convincing evidence that there
 will be sufficient future taxable income available to realise the
 assets. Deferred tax assets and liabilities are offset if such items
 relate to taxes on income levied by the same governing tax laws and the
 Company has a legally enforceable right for such set off. Deferred tax
 assets are reviewed at each balance sheet date for their realisabi
 lity.
 
 1.11 Non-Current Intangible Assets
 
 Other non-current intangible assets represent expenditure incurred on
 brand promotion. It has been decided to write off these expenses over
 the period of five years.
 
 1.12 Revenue Recognition
 
 Sale of goods is recognised, net of returns and trade discounts, on
 transfer of significant risks and rewards of ownership to the buyer,
 which generally coincides with the delivery of goods to customers.
 Sales include excise duty but exclude sales tax, value added tax and
 freight outward.
 
 Revenue from services is recognised when the services are complete.
 
 1.13 Other Income
 
 Interest income is accounted on accrual basis. Dividend income is
 accounted for when the right to receive it is established.
 
 1.14   Investments
 
 Long-term investments (excluding investment properties), are carried
 individually at cost less provision for diminution, other than
 temporary, in the value of such investments. Current investments are
 carried individually, at the lower of cost and fair value. Cost of
 investments includes acquisition charges such as brokerage, fees and
 duties.
 
 Investment properties are carried individually at cost.
 
 1.15   Provision and Contingencies
 
 A provision is recognised when the Company has a present obligation as
 a result of past events and it is probable that an outflow of resources
 will be required to settle the obligation in respect of which reliable
 estimate can be made.Provisions (excluding retirement benefits) are not
 discounted to their present value and are determined based on the best
 estimate required to settle the obligation at the balance sheet date.
 These are reviewed at each balance sheet date and adjusted to reflect
 the current best estimates. Contingent liabilities are disclosed in the
 Notes.Contingent assets are not recognised in the financial statements.
 
 1.16   Cash and cash equivalents (for purposes of Cash Flow Statement).
 
  Cash comprises cash on hand and demand deposits with banks. Cash
 equivalents are short-term balances (with an original maturity of three
 months or less from the date of acquisition), highly liquid investments
 that are readily convertible into known amounts of cash and which are
 subject to insignificant risk of changes in value.
 
 1.17 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.
 
 1.18 Earnings per Share
 
 Basic earnings per share is computed by dividing the profit / (loss)
 after tax(including the post tax effect of extraordinary items, if any)
 by the weighted average number of equity shares outstanding during the
 year. Diluted earnings per share is computed by dividing the profit /
 (loss) after tax (including the post tax effect of extraordinary items,
 if any) as adjusted for dividend, interest and other charges to expense
 or income (net of any attributable taxes) relating to the dilutive
 potential equity shares,by the weighted average number of equity shares
 considered for deriving basic earnings per share and the weighted
 average number of equity shares which could have been issued on the
 conversion of all dilutive potential equity shares. Potential equity
 shares are deemed to be dilutive only if their conversion to equity
 shares would decrease the net profit per share from continuing ordinary
 operations. Potential dilutive equity shares are deemed to be converted
 as at the beginning of the period, unless they have been issued at a
 later date. The dilutive potential equity shares are adjusted for the
 proceeds receivable had the shares been actually issued at fair value
 (i.e. average market value of the outstanding shares). Dilutive
 potential equity shares are determined independently for each period
 presented. The number of equity shares and potentially dilutive equity
 shares are adjusted for share splits / reverse share splits and bonus
 shares, as appropriate.
Source : Dion Global Solutions Limited
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