Moneycontrol Be a Pro
Get App
SENSEX NIFTY
Moneycontrol.com India | Accounting Policy > Steel - GP & GC Sheets > Accounting Policy followed by National Steel & Agro Industries - BSE: 513179, NSE: NATNLSTEEL
YOU ARE HERE > MONEYCONTROL > MARKETS > STEEL - GP & GC SHEETS > ACCOUNTING POLICY - National Steel & Agro Industries

National Steel & Agro Industries

BSE: 513179|NSE: NATNLSTEEL|ISIN: INE088B01015|SECTOR: Steel - GP & GC Sheets
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Dec 05, 15:40
2.02
-0.1 (-4.72%)
VOLUME 800
LIVE
NSE
Dec 05, 15:44
2.15
0
VOLUME 2,801
Mar 15
Accounting Policy Year : Mar '16

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Accounting :

The financial statements have been prepared in accordance with Generally Accepted Accounting Principles in India (''GAAP'') under the historical cost convention on the accrual basis of accounting. GAAP comprises mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (''SEBI'') and other pronouncements of the Institute of Chartered Accountants of India (''ICAI''), to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in an accounting policy hitherto in use. The financial statements are prepared and presented in Indian Rupees unless otherwise stated.

B. Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles require the management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities and disclosure of Contingent Liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Significant estimates used by the management in the preparation of these financial statements include estimates of the economic useful life of Fixed Assets and provisions for bad and doubtful debts. Any revision to accounting estimates is recognized prospectively.

C. Revenue Recognition :

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for discounts (net), and gain/loss on corresponding hedge contracts. Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable and net off with finance cost.

D. Fixed Assets :

Tangible Assets

Fixed Assets are stated at cost of acquisition and subsequent improvements thereto, inclusive of taxes, freight and other incidental expenses related to acquisition, improvements and installation, except in case of revaluation of Fixed Assets where they are stated at revalued amount, as contained in AS-10. Capital Work-in-Progress includes cost of Fixed Assets under installation, any unallocated expenditure and Interest during construction period on loans taken to finance the Fixed Assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalized. Forex on liability towards Fixed Assets is added or deducted from the cost of Assets.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use on such date, are disclosed under long-term loans and advances and capital work-in-progress respectively.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

E. Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

F. Central Value Added Tax (CENVAT) :

CENVAT claimed on capital goods is reduced from the cost of plant and machinery. CENVAT claimed on purchases of raw and other materials is reduced from the cost of such materials.

G. Depreciation :

Depreciation on Factory Building, Plant & Machinery, Electrical Installation and equipment is provided on a straight-line method over the estimated life of assets.

Effective 1st April 2014, the Company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the Companies Act, 1956.

Depreciation on additions during the year is being calculated on pro-rata basis from the following month, in which such additions were made or up to the month preceding the month of such deletion, as the case may be.

H. Borrowing Cost :

Borrowing cost relating to acquisition/ construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use/sale. Borrowing costs that are attributable to the projects are charged to the respective projects. All other borrowing costs, not eligible for inventorisation /capitalization, are charged to revenue.

I. Lease Rent :

Lease under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in the statement of profit and loss over the lease term.

J. Inventories :

Stock of Raw materials, stores & spares, Fuel & packing material are valued at cost or Net realizable value whichever is lower. Traded goods and finished goods are valued at lower of cost or net realizable value. Stock of Scrap is valued at net realizable value. The cost of material is arrived on First in First out basis.

K. Foreign Currency Transactions :

(I) a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing

on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Statement, except in case of long term liabilities, where they relate to acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such assets.

(II) Forward and Options Contracts in Foreign Currencies :

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognized in the Profit and Loss Statement except in case where they relate to the acquisition or construction of Fixed Assets, in which case, they are adjusted to the carrying cost of such assets.

L. Investments :

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Non Current investments are stated at cost. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary.

M. Taxation :

Provision for tax for the year comprises current Income Tax and Deferred Tax and is provided as per the Income Tax Act, 1961.

Deferred tax resulting from timing differences between the book and the tax profits is accounted for, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future, however where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets/ liabilities are reviewed as at each balance sheet date.

Minimum Alternate Tax (''MAT'') paid in accordance with the Indian Income Tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the balance sheet if there is convincing evidence that the Company will pay normal tax after the tax holiday period and the resultant assets can be measured reliably.

N. Retirement benefits :

a) Contribution to provident fund and family pension fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

b) Compensated absences, a long-term defined employee benefit, is accrued based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. The group accrues for the expected cost of short-term compensated absences in the period in which the employee renders services.

c) Gratuity, a defined benefit for employees of the Indian entity, is accrued based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. The Company has an employees'' gratuity fund managed by the Life Insurance Corporation of India (''LlC''). Provision for gratuity liabilities, pending remittance to the fund, is carried in the balance sheet. Actuarial gains and losses are charged to the profit and loss account.

O. Segment Accounting :

The Company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under:-

i) Manufacturing (G.P./G.C./C.C.L. Coils/Sheets/Lead Ingots/Aluminum Ingots)

ii) Trading

P. Segment Accounting Policies :

Following accounting policies have been followed by the Company for the segment reporting:

a) Segment revenue includes sales and other income directly identifiable with/ allocable to segment.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment results. The expenses, which relate to the Company as a whole and not allocable to segment, are included under un-allocable expenses.

c) Income which relates to the Company as a whole and not allocable to segment is included under unallocable income.

d) i) Segment Assets includes those assets directly identifiable with respective segments and employed by a segment in its operating activities, but does not include income tax assets.

ii) Segment liabilities includes those liabilities directly identifiable with respective segments and operating liabilities that results, from operating activities of a segment, but does not include income tax liabilities and financial liabilities.

iii) Unallocable corporate assets and liabilities represent the assets and liabilities that relate to Company as a whole and not allocable to any segment.

Q. Provisions, Contingent Liabilities and Contingent Assets :

Provisions is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

R. Inter unit Transfer :

a) Inter unit transfers of goods for internal use as captive consumption are not shown in the Profit and Loss account.

b) Any unrealized profit on unsold stocks is ignored while valuing inventories.

S. Cash Flow Statement :

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company.

Cash and Cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

T. Earnings Per Equity Share :

The earnings considered in ascertaining the companies earning per equity share comprise net profit after tax, preference dividend, tax on preference dividend and includes the post tax effect of any extra-ordinary/exceptional item is considered. The number of equity shares used in computing basic earnings per equity share is the weighted average number of shares outstanding during the year.

The number of equity shares used in computing diluted earnings per share comprises the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.

Source : Dion Global Solutions Limited
Quick Links for nationalsteelagroindustries
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.