| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory ACCOUNTING POLICIES
Basis of Accounting:
The Consolidated financial statements (CFS) of the Company and its subsidiaries (together the ‘Group’) have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013. The Consolidated financial statements (CFS) have been brpared under historical cost convention on an accrual basis of accounting.
The accounting policies adopted in the brparation of financial statements are consistent with those used in the brvious year except for the change in accounting policy explained below.
Debrciation on Fixed Assets
Debrciation on tangible assets has been provided as per Schedule II to the Companies Act 2013 and debrciation is charged based on useful life of the assets as brscribed in schedule II to the Companies Act, 2013. In the case of a Subsidiary debrciation has not been calculated on assets which are not in use. Intangible assets are amortized over their respective individual estimated useful lives on straight line basis.
Leasehold land is being amortized over the period of lease or balance life of the project, whichever is earlier.
c) Use of Estimates
The brparation of financial statements in conformity with generally accepted accounting principles (Indian GAAP) requires management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the Balance Sheet date of financial statements and the results 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. Difference between the actual results and estimates are recognized as and when, the results are known / materialized.
d) Revenue Recognition
Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and it can be reliably measured. Revenue to the extent considered receivable, unless specifically stated to be otherwise, are accounted for on mercantile basis.
ii) Revenue from Operations include sale of goods, services and excise duty but excludes
Value Added Tax (VAT)/sales tax, service tax.
iii) Revenue in respect of claims of insurance, exports incentives etc. are recognized only when there is reasonable certainty as to the ultimate collection.
iv) In respect of construction contracts, revenue is recognized on percentage completion basis when completion level is minimum 10%. Completion level is the percentage of revenue earned to total contract value net of discount. Warranty cost, penalties or possible losses that are dependent upon future events are recognized as and when these are ascertained/ascertainable.
v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
vi) Dividend income is recognized when right to receive dividend is established.
e) Fixed Assets
Tangible Assets
Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation , less accumulated debrciation and impairment loss, if any. The Cost of Tangible assets comprises its purchase price, borrowing cost, and any other cost directly attributable to bringing the asset to its working condition for its intended use , net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing assets beyond its brviously assessed standard of performance.
Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.
Intangible Assets
Intangible Assets are stated at cost net of recoverable taxes less accumulated Amortization/depletion and impairment loss, if any. The Cost comprises its purchase Price borrowing cost and any other cost directly attributable to bringing the asset to its working condition for its intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
f) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets exceeds the recoverable amount. The recoverable amount is greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of the assets are discounted to their brsent value at appropriate rates. An impairment loss is reversed if there has been change in the recoverable amount and as such, loss no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets.
g) Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost. However, provision for diminution in value of non current investment is made only if such decline other than temporary.
h) Inventories
Inventories are valued at lower of cost or net realisable value.
Cost of raw materials includes the purchase price as well as incidental expenses such as conversion cost, other cost including manufacturing overhead incurred in bringing them to their respective brsent location and situation. The cost in respect of raw materials is determined on First in First out basis.
ii) Finished goods are valued at lower of weighted average cost and on net realizable value.
iii) Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying at the manufacturing locations as on the balance sheet date. Cost of finished goods and work in progress rebrsents materials, direct labour and appropriate portion of overhead expenses allocated against the same.
iv) Scrap generated is valued at net realisable value.
v) Cost in respect of stores and spares is determined on weighted average basis.
vi) Work-in-progress is valued at weighted average cost, or on net realisable value
Whichever is lower.
i) Retirement and Other Employee Benefits
Gratuity is provided on the basis of actuarial valuation on projected unit credit method. The Company has a gratuity fund under the scheme of Life Insurance Corporation of India. Matching contribution will be made in the fund.
a) Retirement benefits in the form of Provident Fund are charged to the statement of profit & loss of the year when an employee renders the related service.
b) Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.
j) Foreign Currency Transaction
Transactions in foreign currencies are accounted for at the exchange rate brvailing on the date of transaction. Foreign currency monetary assets and liabilities at the year end are translated using the closing exchange rates whereas non-monetary assets are translated at the rate on the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expenses and are adjusted to the Statement of Profit and Loss.
(a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(b) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
(c) Exchange differences
All other exchange differences are recognized as income or as expenses in the period in which they arise.
k) Government Grants
Government grants available to the enterprise are considered for inclusion in account where such benefits have been earned or it is reasonably certain that ultimate collection will be made. Grants from Government relating to fixed assets are shown as a deduction from the gross value of fixed assets and those of the nature of capital subsidy are credited to Capital Reserve. Other Government grants including incentives etc. are credited to the Statement of Profit and Loss or deducted from the related expenses.
l) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition / construction of a qualifying asset are capitalized as part of the cost of such asset till the time it is ready for intended use. Other borrowing costs are charged to Profit and Loss Statement in the Period in which they are incurred.
m) Taxation
Tax expenses consist of current and deferred tax. Current Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income-tax Act, 1961 after taking into consideration benefits admissible under the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax assets and liabilities arising on account of timing differences, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred Tax Assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. In case of carry forward of unabsorbed debrciation and tax losses, deferred tax assets are recognized only if there is “virtual certainty” that such deferred tax assets can be realized against future taxable profits.
n) Earnings per Share
Basic Earnings per share is calculated by dividing the net profit or loss after tax and Minority Interest for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss after Tax and Minority Interest for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
o) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on 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 Assets are neither recognized nor disclosed in the financial statements.
Contingent liabilities are not provided for and are disclosed by way of notes.
Cash Flow Statement
Cash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Group are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
q) Segment Reporting Policies
Identification of segments:
The Company's business includes manufacturing of TMT Bars, Steel Structures, Steel Pipes and Tubes, GP Coils, CR Coils, Tower Sleeves and components and processing of Steel. There is only reportable business segment which is also the primary reportable segment. Secondary reportable segments are based on geographical location of customers. The geographical segments have been disclosed based on revenues within India and outside India.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Segment Accounting Policies:
The company brpares its segment information in conformity with the accounting policies adopted for brparing and brsenting the financial statements of the company as a whole. Disclosure of accounting policies explanatoryACCOUNTING POLICIES
Basis of Accounting:
The Consolidated financial statements (CFS) of the Company and its subsidiaries (together the ‘Group’) have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013. The Consolidated financial statements (CFS) have been brpared under historical cost convention on an accrual basis of accounting.
The accounting policies adopted in the brparation of financial statements are consistent with those used in the brvious year except for the change in accounting policy explained below.
Debrciation on Fixed Assets
Debrciation on tangible assets has been provided as per Schedule II to the Companies Act 2013 and debrciation is charged based on useful life of the assets as brscribed in schedule II to the Companies Act, 2013. In the case of a Subsidiary debrciation has not been calculated on assets which are not in use. Intangible assets are amortized over their respective individual estimated useful lives on straight line basis.
Leasehold land is being amortized over the period of lease or balance life of the project, whichever is earlier.
c) Use of Estimates
The brparation of financial statements in conformity with generally accepted accounting principles (Indian GAAP) requires management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the Balance Sheet date of financial statements and the results 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. Difference between the actual results and estimates are recognized as and when, the results are known / materialized.
d) Revenue Recognition
Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and it can be reliably measured. Revenue to the extent considered receivable, unless specifically stated to be otherwise, are accounted for on mercantile basis.
ii) Revenue from Operations include sale of goods, services and excise duty but excludes
Value Added Tax (VAT)/sales tax, service tax.
iii) Revenue in respect of claims of insurance, exports incentives etc. are recognized only when there is reasonable certainty as to the ultimate collection.
iv) In respect of construction contracts, revenue is recognized on percentage completion basis when completion level is minimum 10%. Completion level is the percentage of revenue earned to total contract value net of discount. Warranty cost, penalties or possible losses that are dependent upon future events are recognized as and when these are ascertained/ascertainable.
v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
vi) Dividend income is recognized when right to receive dividend is established.
e) Fixed Assets
Tangible Assets
Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation , less accumulated debrciation and impairment loss, if any. The Cost of Tangible assets comprises its purchase price, borrowing cost, and any other cost directly attributable to bringing the asset to its working condition for its intended use , net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing assets beyond its brviously assessed standard of performance.
Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.
Intangible Assets
Intangible Assets are stated at cost net of recoverable taxes less accumulated Amortization/depletion and impairment loss, if any. The Cost comprises its purchase Price borrowing cost and any other cost directly attributable to bringing the asset to its working condition for its intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
f) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets exceeds the recoverable amount. The recoverable amount is greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of the assets are discounted to their brsent value at appropriate rates. An impairment loss is reversed if there has been change in the recoverable amount and as such, loss no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets.
g) Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost. However, provision for diminution in value of non current investment is made only if such decline other than temporary.
h) Inventories
Inventories are valued at lower of cost or net realisable value.
Cost of raw materials includes the purchase price as well as incidental expenses such as conversion cost, other cost including manufacturing overhead incurred in bringing them to their respective brsent location and situation. The cost in respect of raw materials is determined on First in First out basis.
ii) Finished goods are valued at lower of weighted average cost and on net realizable value.
iii) Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying at the manufacturing locations as on the balance sheet date. Cost of finished goods and work in progress rebrsents materials, direct labour and appropriate portion of overhead expenses allocated against the same.
iv) Scrap generated is valued at net realisable value.
v) Cost in respect of stores and spares is determined on weighted average basis.
vi) Work-in-progress is valued at weighted average cost, or on net realisable value
Whichever is lower.
i) Retirement and Other Employee Benefits
Gratuity is provided on the basis of actuarial valuation on projected unit credit method. The Company has a gratuity fund under the scheme of Life Insurance Corporation of India. Matching contribution will be made in the fund.
a) Retirement benefits in the form of Provident Fund are charged to the statement of profit & loss of the year when an employee renders the related service.
b) Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.
j) Foreign Currency Transaction |