| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 1. GENERAL INFORMATION IFGL Exports Limited (the 'Company') is a public limited company, incorporated under the Companies Act, 1956. The Company is primarily engaged in the manufacturing and selling of refractory items used in Steel Plants and its operating activity is located in the new area of Kandla Special Economic Zone. The Company is a subsidiary of IFGL Refractories Limited. 2. BASIS OF brPARATION 'The Financial Statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (the 1956 Act) [which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (the 2013 Act) in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs] and the relevant provisions of the 1956 Act/ the 2013 Act, as applicable . The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in the Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current non current classification of assets and liabilities. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES i. Fixed Assets (including intangible assets) are stated at cost less accumulated debrciation (including amortisation). The Company capitalises all costs relating to acquisition and installation of Fixed Assets. ii. Debrciation on tangible assets (other than Computers and Vehicles) is calculated on straight-line method at applicable rates and the manner brscribed in Schedule XIV of the Companies Act, 1956. Computers are debrciated over a period of three years and Vehicles are debrciated over a period of five years. Intangible assets (other than Computer Software which are amortized over a period of two to five years) are amortized on straight-line method over a period of five years. Fixed Assets are subject to impairment tests on stand alone basis as and when such indication exists in terms of requirement of Accounting Standard 28 - Impairment of Assets issued by The Institute of Chartered Accountant of India.Assets individually costing Rs 5,000 or less are fully debrciated in the year of acquisition.
iii. Inventories are valued at lower of cost and net realisable value. Cost is determined on the weighted average basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its brsent location and condition and includes, where applicable, appropriate overheads.
iv. Revenue from sale of products are exclusive of sales tax and returns and are recognised when significant risk and rewards of ownership of the goods is transferred to the buyer and the revenue is measurable at the time of sale and it is reasonable to expect ultimate collection of the sale consideration.
v. Current investments are stated at lower of cost and fair value. Non-current investments are stated at cost less provision for diminution, other than temporary, if any, in value.
vi. Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Pursuant to Accounting Standard 22 (AS 22) i.e. 'Accounting for Taxes on Income' issued by ICAI, the deferred tax assets (net) for the year works out to Rs. 41,755.92 . As a matter of prudence, and as recommended under AS-22, the same has not been recognised in the profit and loss statement of the current year.
vii. Transactions in foreign currencies are recognised at the rates existing at the time of such transactions. Gains or losses resulting from the settlement of such transactions are recognised in the Profit and Loss Statement. Year end balances of monetary assets and liabilities denominated in foreign currencies are translated at applicable year-end rates and the resultant differences is recognised in the Profit and Loss Statement except in case where they relate to the acquisition of fixed assets acquired out of India in which they are adjusted in cost of corresponding assets.
viii. Borrowing cost that are attributable to acquisition, construction or production of qualifying assets (assets which require substantial period of time to get ready for its intended use) are capitalized as part of cost of such assets. All other borrowing costs are recognized as expenses in the period they are incurred.
ix. Employee Benefits a) Contributions towards provident fund are recognised as expense. Provident fund contributions in respect of employees are made to fund managed by Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. b) Contribution under Employees Pension Scheme is made as per statutory requirements and charged as expense for the year. c) Liability towards Gratuity, covering eligible employees, is provided for on the basis of year-end actuarial valuation. d) Accrued liability towards Compensation Absence, covering eligible employees, estimated by the management at the year end and recognised as a charge Disclosure of employee benefits explanatory Employee Benefits a)Contributions towards provident fund are recognised as expense. Provident fund contributions in respect of employees are made to fund managed by Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. b) Contribution under Employees Pension Scheme is made as per statutory requirements and charged as expense for the year. c) Liability towards Gratuity, covering eligible employees, is provided for on the basis of year-end actuarial valuation. d) Accrued liability towards Compensation Absence, covering eligible employees, estimated by the management at the year end and recognised as a charge |