Annual Report 2004 - Nagarjuna Fertilizers

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NFCL Schedules forming part of the Profit and Loss Account for the year ended 31st March, 2005 Rs. Lakhs SCHEDULE 13 - Accounting Policies and Notes to Accounts A. SIGNIFICANT ACCOUNTING POLICIES : 1. General: The company follows accrual system of accounting and recognises income and expenditure on accrual basis unless otherwise stated. The Accounts are prepared on historical cost convention, unless otherwise stated. 2. Fixed Assets: Particulars Schedule 11 - Other expenses Rent 122.27 94.58 Rates and Taxes 231.06 63.56 Electricity and Water 68.40 53.06 Stores and Spares Consumed 580.73 301.58 Repairs and Maintenance Buildings 37.60 21.06 Plant & Machinery 163.47 351.60 Others 302.79 503.86 187.15 559.81 Insurance 691.76 602.03 Printing and Stationery 72.01 46.26 Postage, Telephone and Telex 200.61 158.12 Travelling and Conveyance 423.68 393.67 Advertisement and Publicity 309.37 276.03 Employee Recuritment and Training 40.44 10.24 Legal, Secretarial and Professional Charges 674.04 618.59 Share Registry expenses 40.39 69.87 Directors’ Sitting Fees 3.25 3.70 Research & Development - Grant 18.97 38.87 Auditors’ remuneration 43.07 27.75 Donations 0.10 - Provision for doubtful debts / claims - 3.97 Bad Debts/Advances written off 128.11 138.00 Less: Provision for doubtful debts/advances 51.72 76.39 - 138.00 Provision for depletion in value of stores 889.11 - CFG project expenditure - 39.68 Miscellaneous Expenses 255.72 193.93 Schedule 12 - Interest and Financing charges 31.03.2005 31.03.<strong>2004</strong> TOTAL 5,245.23 3,693.30 Term Loans 8,206.24 12,799.29 Debentures 3,798.91 5,922.44 Others 2,273.48 6,852.08 TOTAL 14,278.63 25,573.81 a. Fixed assets are stated at cost, unless stated otherwise. Cost comprises the purchase price and other attributable expenses. b. Revaluation : The net increase in the value of the assets is credited to the Revaluation Reserve. c. Impairment of Assets : Impairment of an asset is reviewed and recognised in the event changes and circumstances indicate that the carrying amount of an asset is not recoverable. Difference between the carrying amount of an asset and the recoverable value is recognised as impairment loss in the statement of profit and loss in the year of impairment. 30
NFCL 3. Depreciation on Fixed Assets: a) Depreciation on fixed assets other than the assets given on lease, is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. b) Depreciation charge for each year is net of additional depreciation on incremental values arising out of revaluation met out of revaluation reserve. c) In respect of Assets given on lease, depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Further, in respect of ongoing leases, the guidance note on accounting of leases issued by the Institute of Chartered Accountants of India (ICAI) is followed. 4. Investments : Investments are stated at cost less any diminution in their value, which is other than temporary. 5. Foreign currency transactions: The transactions in foreign currencies remaining outstanding at the end of the year, are translated at the exchange rates prevailing on the date of Balance Sheet or at the rate of exchange fixed under contractual arrangements. Exchange gain/loss on transactions relating to liabilities incurred to acquire fixed assets is treated as an adjustment to the cost of fixed assets. Exchange gains and losses on foreign exchange transactions other than those relating to fixed assets are adjusted in the profit and loss account. 6. Revenue recognition: a) Credit under Group Concession Scheme (GCS) and Equated Freight is considered on despatch of finished goods from the factory in accordance with the procedure prescribed by the Government of India – Fertiliser Industry Co-ordination Committee. b) Lease rental income is recognised in accordance with the guidance note on accounting for leases issued by ICAI. 7. Warranty claims in respect of Micro Irrigation business raised by parties regarding free replacements etc. covered under warranties are accounted in the year in which the claims are finally settled. 8. Deferred Revenue/Preliminary Expenditure: Expenditure on catalyst is treated as deferred revenue expenditure and amortised on the basis of estimated life as technically assessed. Preliminary expenses are written off over a period of 10 years in equal instalments. 9. Inventories: The method of valuation of various categories of inventories is as follows: a. Manufactured Products : i. Finished goods - at lower of cost and net realisable value. ii. Work in process - at cost. Cost - includes material cost, labour, factory overheads and depreciation but excludes interest on borrowings. Net realisable value in the case of Urea - the Group Concession Price notified by the Govt. of India in respect of finished goods lying at the factory, and the net sale price in respect of finished goods lying in the warehouses outside the factory. b. Traded products - at lower of cost and net realisable value. c. Other finished goods, work-in-process, raw materials, stores, spares, packing material and loose tools - at weighted average cost, less provision for depletion in value, if any. 10. Retirement Benefits: The company’s liability towards gratuity and superannuation benefits of eligible employees is covered by a policy with LIC and the annual contributions are paid/provided in accordance therewith. Leave encashment is provided on the basis of valuation by independent actuaries, as at date of the Balance Sheet. The Company’s contribution towards provident fund and pension fund is administered and managed by an approved trust and are charged to revenue. 11. Taxes on Income: Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods. 12. Contingencies: Loss contingencies arising from claims, litigation, assessments, fines, penalties, after sales warranties, right to recompense etc., are provided for when it is probable that a liability may be incurred, and the amount can be reasonably estimated. 31
Page 1 and 2: NFCL NOTICE NOTICE IS HEREBY GIVEN
Page 3 and 4: NFCL Shri K. Rahul Raju was appoint
Page 5 and 6: NFCL Your company has been able to
Page 7 and 8: NFCL I. Urea FORM - A Form for disc
Page 9 and 10: NFCL Statement pursuant to Section
Page 11 and 12: NFCL E. INFORMATION TO THE BOARD Du
Page 13 and 14: NFCL 8. Warrants Committee Members
Page 15 and 16: NFCL I. SHAREHOLDER INFORMATION The
Page 17 and 18: NFCL The details of the amount uncl
Page 19 and 20: NFCL steps to reduce its logistics
Page 21 and 22: NFCL iv) In our opinion and accordi
Page 23 and 24: NFCL Profit and Loss Account for th
Page 25 and 26: NFCL Schedules forming part of the
Page 27 and 28: NFCL Schedules forming part of the
Page 29: NFCL Schedules forming part of the
Page 33 and 34: NFCL iii) iv) under Section 391(3)
Page 35 and 36: NFCL charge on the current assets o
Page 37 and 38: NFCL Details of components of defer
Page 39 and 40: NFCL b. Production, Sales & Stock :
Page 41 and 42: NFCL To The Board of Directors NAGA
Page 43 and 44: NFCL Consolidated Profit and Loss A
Page 45 and 46: NFCL Schedules to the Consolidated
Page 47 and 48: NFCL Schedules to the Consolidated
Page 49 and 50: NFCL 7. Warranty claims in respect
Page 51 and 52: NFCL Based on the report of the val
Page 53 and 54: NFCL The aforesaid revaluation is a
Page 55 and 56: NFCL 22. Earnings Per Share : Sl. N
Page 57: NFCL Board of Directors Field Marsh

Annual Report 2004 - Nagarjuna Fertilizers

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