Naga Ltd. कंपली की लेखा नीति

Mar 31, 2016

NOTE - 1 : SIGNIFICANT ACCOUNTING POLICIES: Corporate Information :

Naga Limited is a Public Limited Company incorporated in 1991 as “Naga Oil Mills Company Limited” under Companies Act 1956 with Registration No. 18-20409. In April 1998, the Company changed its name to Naga Limited.

 

Its  Shares are  listed  on Metropolitan  Stock Exchange Limited  (MSEI), Mumbai.   The Registered Office of the Company is situated at Chennai and its corporate office at Dindigul, Tamil Nadu.

 

The Company is engaged in manufacturing of Wheat Products, Minerals, Detergents and in Power Generation.

 

a.  Basis of Preparation  of Financial  Statements

 

The financial  statements are prepared under the historical  cost convention on the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles accepted in India and comply with the accounting standards notified  by Central Government of India, under  the relevant provisions of  The Companies Act, 2013.

 

b.   Uses of Estimates:

 

The preparation of financial  statements requires estimates and assumptions to be made that  affect  the  reported  amount  of  assets and liabilities on the  date  of  financial statements and the reported  amount of revenue and expenses during the reporting  period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

 

c.    Revenue Recognition:

 

i.Income: Revenue is recognised only when it can be reliably  measured and it is reasonable to expect ultimate  collection.  Revenue from sales is recognised on despatch  of goods  and net   of   excise  duty,  service  tax,  trade  discounts where   applicable.  Power generated through windmill  is valued  as per the credits given in the regular power bills  by Tamil Nadu Generation  and Distribution  Corporation Limited.  Other Incomes are recognised on accrual basis.

 

ii.Expenditure: Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

 

d.   Fixed Assets :

 

Fixed  Assets are   stated  at  cost  of  acquisition  or  construction,   net of cenvat credit and depreciation and impairment loss, if any. Cost include  direct costs and financing cost related to borrowing  attributable to acquisition that are capitalized until the assets are ready  for   use.  Capital- work-in-progress  comprise outstanding  advances paid to acquire fixed assets and the cost  of  fixed   assets  that   are  not  yet  ready  for their intended use at the reporting date.  Intangible assets recorded in the books are shown less of accumulated amortization  and impairment.

 

e.    Depreciation and Amortisation :

 

Depreciation on fixed  assets is provided to  the  extent  of depreciable  amount on Written  Down Value (WDV) method in respect of Soaps & Detergents division,Vedasandur and under Straight Line Method in respect of other Divisions. Depreciation is provided based on useful life  of the asssets as prescribed in Schedule II to the Companies Act, 2013.

 

f.    Impairment of Assets:

 

An asset is treated  as impaired  when the  carrying cost of the  assets exceeds its recoverable value. 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  recognised  in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

 

g.    Foreign  Currency  Transactions:

 

i.     Transactions   denominated   in   foreign   currencies   are   recorded   at   the exchange rate  prevailing on the date of transaction or that approximates  the  actual  rate  at the  date of the transaction.

 

ii.  Monetary items  denominated  in  foreign currency  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 recognised as exchange difference and the  premium  paid  on  forward contracts is recognised over the life of the contract.

 

iii. Non monetary foreign currency items are carried at cost.

 

iv. Any income or expense on account of exchange difference either on settlement  or on    translation  is recognised in the  Profit  and Loss account except  in case of long term liabilities, where they related to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

 

h.   Investments:

 

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

 

i.     Inventories:

 

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any.  Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their  respective present location and condition.   Cost of raw materials,  process chemicals, stores and spares, packing materials,  trading and other products are determined on First In First Out basis.

 

j.     Employee Benefits

 

i.  Short term Employee Benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

 

ii. Post employment and other long term employees benefits  are recognised as an expense in the Profit and Loss Account for the year in which employee has rendered services. The expense is recognised at the present value of the amounts payable determined  using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss Account.

 

k.    Borrowing Cost:

 

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalised  as part  of  the  cost of  such assets. A qualifying  assets is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss Account.

 

l.     Government  Grants:

 

i.  Government grants are recognised when there  is resonable assurance that  the company will comply with the conditions with attached to them and the grants will be received.

 

ii. Government grants whose primary condition is that the company should purchase, construct  or other  wise acquire capital  assets are presented by deducting them from  the carrying value of the assets. The grant is recognised as income over the life of the depreciable asset by way of a reduced depreciation charge.

 

m.  Provision for Current  and Deferred  Tax

 

Provision for current tax  is made after taking into consideration benefits admissible under the provisions  of  the  Income Tax Act, 1961.   Deferred  tax  resulting  from  “timing difference” between  taxable  and  accounting  income is accounted for using tax rates and laws that are enacted  or  substantially  enacted  as on  the  balance  sheet  date.   Deferred tax  asset  is recognised  and  carried   forward   only  to  the   extent  that  there is a virtual certanity  that  the asset will  be realised in future.    Deferred tax assets and liabilities are measured using the tax rate and tax law that have been enacted or substantively enacted by the Balance Sheet date.

 

n.   Provision, Contingent  Liabilities and Contingent Assets

 

Provisions involving substantial degree of estimation in measurement are recognised when, there is present obligation as a result of past events and it is probable that there will be an outflow  of resources. Contingent Liabilities  are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.