Annual Report 2004 - Nagarjuna Fertilizers

NFCL
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. Gratuity Liability in respect of two Subsidiary
Companies is accounted on actuarial valuation. 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.
B. NOTES TO ACCOUNTS:
1. (a) Consolidated Accounts:
The Consolidated Financial Statements have been
prepared in accordance with Accounting Standard
21 (AS-21) “Consolidated Financial Statements” issued
by Institute of Chartered Accountants of India.
The subsidiaries considered in the preparation of
these consolidated financial statements are:
Percentage of voting power
As at 31.03.2005 As at 31.03.2004
a) Nagarjuna Oil Corporation Limited (NOCL) 100.00 100.00
b) Jaiprakash Engg. & Steel Co. Ltd. (JESCO) 99.84 99.43
c) Nagarjuna Power Corporation Ltd (NPCL) 96.90 Nil
These consolidated Financial Statements are based,
in so far as they relate to amounts included in respect
of subsidiaries, on the audited financial statements.
(b) Associates:
The details of associates in accordance with
Accounting Standard 23 “Accounting for Investments
in associates in consolidated financial statements”
(a)Nagarjuna Agricultural Research and
Development Institute (NARDI)* 25.00%
(b)K.V.K.Raju International
Leadership Academy* 42.85%
* Investments are valued in accordance with AS
13-Valuation of Investments since these are registered
under section 25 of the Companies Act, 1956.
2. Estimated amount of contracts remaining to be
executed on capital account and not provided for
(net of advance)
i) In respect of Capital and Service Orders Rs. 231.98
lakhs (Previous year Rs.84.00 lakhs)
ii) In respect of 33 acres land in possession,
compensation for which is not ascertained.
iii) In respect of NPCL Rs. 368756.27 lakhs –
(including LOIs - Rs. 367063.50 lakhs) (Previous
year Rs.1692.77 lakhs)
iv) In respect of NOCL Rs. 51072.49 lakhs (Previous
year Rs. 48719.40 lakhs)
3. A. Contingent Liabilities:
i) Counter guarantees given to Bankers in
respect of Bank guarantees Rs.712.82 Lakhs
(Previous year Rs.146.27 Lakhs)
ii) Corporate guarantees given to banks by
NFCL on behalf of NOCL, a subsidiary
Company Rs.15323.00 Lakhs (Previous year
Rs. 15043.48 lakhs)
iii) Taxation matters of NFCL under appeals
Rs.111.69 lakhs (Previous Year Rs. 490.60
lakhs).
iv) Taxation matters of JESCO under appeals Rs.
94.66 lakhs (Previous Year Rs. 94.66 lakhs)
B. Claims against the company not acknowledged
as debts Rs. 1401.98 lakhs (Previous year
Rs. 675.83 lakhs).
i) Demand for payment under AP Non Agricultural
Land Assessment Act (NALA) Rs. 159.45 lakhs
(Previous year Rs.159.45 lakhs)
ii) Property tax – Kakinada Municipality Rs. Nil
(Previous year Rs. 142.10 lakhs)
iii) Property Tax – Indrapalem Panchayat
Rs.11.48 Lakhs (Previous year Rs. 11.48
lakhs)
iv) Compensation for Land acquisition Rs.228.45
lakhs (Previous Year Rs. 263.34 lakhs).
v) Water Tariff (PHE Dept) Rs. 89.58 lakhs
(Previous Year Rs. Nil )
vi) Water Charges (Irrigation) Rs. 131.52 lakhs
(Previous Year Rs. Nil )
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