1. Corporate information
National General Industries Limited ('The Company') is engaged in manufacturing and selling of steel
from its manufacturing facilities located at Ghaziabad. The company is operating its business
through registered office located at New Delhi.
2. Basis of preparation
The financial statements have been prepared on the historical cost basis except for following assets
and liabilities which have been measured at fair value amount
a) Certain financial assets and liabilities
The financial statements of the Company have been prepared to comply with the Indian Accounting
standards ('Ind AS'), including the rules notified under the relevant provisions of the Companies Act,
2013.
Company's financial statements are presented in Indian Rupees, which is also its functional currency.
The accounting policies adopted in the preparation of financial statements are consistent with those
of previous year.
2.1 Summary of significant accounting policies and general confirmations
(a) Property, Plant and Equipment
Property, Plant and Equipment (PPE) are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase price (net of Input
Credit), borrowing costs if capitalization criteria are met and directly attributable cost of
bringing the asset to its working condition for its intended use. Any trade discounts and
rebates are deducted in arriving at the purchase price.
(b) Depreciation/Amortization
Depreciation is provided on Straight Line Method as per rates computed based on useful life
prescribed in schedule II of the Companies Act, 2013. Depreciation on appreciation upon
Property, Plant and Equipment (PPE) is directly charged to Revaluation Reserve. No
Amortization is being provided on leasehold land.
(c) Impairment
Property, Plant and Equipment (PPE)are reviewed for impairment whenever events or
changes in circumstances indicate that their carrying amount may not be recoverable. An
impairment loss is recognized in the Statement of Profit and Loss if the carrying amount of
an asset exceeds its recoverable amount.
(d) Use of estimates
The preparation of financial statements is in conformity with (INDAS) requires the
management to make judgments, estimates and assumptions that affect the reported
amount of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at
the end of the reporting period. Although these estimate are based on the management's
best knowledge of current event and action.
(e) Leases
(i) Lease liability is initially recognized and measured at an amount equal to the present
value of minimum lease payments during the lease term that are not yet paid.
(ii) Right of use asset is recognized and measured at cost, consisting of initial measurement
of lease liability plus any lease payments made to the lessor at or before the
commencement date less any lease incentives received, initial estimate of the
restoration costs and any initial direct costs incurred by the lessee.
(iii) The lease liability is measured in subsequent periods using the effective interest rate
method. The right-of-use asset is depreciated in accordance with the requirements in
Ind AS 16, Property, Plant and equipment.
(iv) Recognition and measurement exemption are available for low-value assets and short
term leases. Assets of low value include IT equipment or office furniture. No monetary
threshold has been defined for low-value assets. Short-term leases are defined as leases
with a lease term of 12 months or less.
(f) 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 and Non-Current investments are carried at fair value determined on
an individual investment basis. Where Current investment are recognized at fair value its
difference with cost is routed through profit and Loss a/c and Where Non-Current
investment are recognized at fair value its difference with cost is routed through Other
Comprehensive Income/ (Loss).
(g) Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use are
capitalized as part of the cost of the respective asset. All other borrowing costs are expensed
in the period they occur.
(h) Inventories
Finished and semi-finished products produced and purchased by the Company are carried at
lower of cost and net realizable value. Raw materials purchased are carried at cost. Store
and spare parts are carried at cost. Cost has been determined by using the FIFO method.
(i) Revenue Recognition
(i) Sale of goods: Revenue from sale of goods is recognized net of rebates and discounts on
transfer of significant risks and rewards of ownership to the buyer.
(ii) Income from Services: Revenue from services is accounted for in accordance with the
terms of contracts, as and when these services are rendered.
(iii) Interest: Revenue is recognized on a time proportion basis taking into account the
amount outstanding and the rate applicable.
(iv) Dividend: Dividend Income is recognized when right to receive is established.
(j) Retirement and other benefits
(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and
the contributions are charged to the statement of profit and loss for the year when the
contributions to respective funds are due.
(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of an
actuarial valuation on projected unit credit (PUC) method made at the end of each
financial year.
(k) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognised in
Statement of Profit and Loss, except to the extent that it relates to items recognised in the
comprehensive income or in equity. In which case, the tax is also recognized in other
comprehensive income or equity.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities, based on tax rates and laws that are enacted or
substantively enacted at the Balance sheet date.
Company has opted 115BAA during the financial year 2020-21 hence that no MAT is
applicable to the company.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in
the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period.
The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each
reporting period.
(l) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the year
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, net profit or loss 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.
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