1 Material Accounting policies & Notes to the financial statements
A Corporate Information
Rajnandini Metal Limited (“the Company”) is a public limited company incorporated and domiciled in India having its registered office at Plot
No. 344, Sector-3 Phase-II, IMT Bawal Rewari HR 123501 IN, India and is listed on the National Stock Exchange of India Limited. The
company engaged in the business of manufacturing, trading or otherwise deal in high-grade Copper Continuous Casting Rods and copper wires.
B Basis of preparation & Presentation of Financial Statements
a) Basis ofPreparation
These financial statements are prepared on going concern basis under the histoical cost convention on the accrual basis except for certain
financial instruments which are measured at fair value or amortized cost at the end of each reportingperiod. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction date. These financial statements comply with the provisions of the
Companies Act, 2013 (The Act), guidelines issued by the Securities & Exchange Board of India (SEBI) and accounting principles generally
accepted in India. All assets and Liabilities have been classified as Current and Non Current as per the Companies normal operating cycle. The
company has considered an operating cycle of 12 months based on the nature of the business.
b) Compliance with Ind AS
These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), under the historical cost convention on the
accrual basis except for certain financial instruments which are measured at fairvalues, the provisions of the Companies Act, 2013 (the Act) (to _
'the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of
the Act read with Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after.
c) Functional & Presentation Currency
The financial statements are presented in Indian Rupees which is the Company's functational and presentation currency and all financial values
are rounded to the nearest Lakhs, except when otherwise indicated.
d) Use of Estimates '
The preparation of financial statements in conformity with Ind AS requires management to make adjustments, estimates and assumptions that
may impact the application of accounting policies and the reported value of assets, liabilities, income, expense and related disclosure concerning
the items involved as well as contingent assets and liabilities at the balance sheet date. Estimates and underlying assumptions are reviewed on an
ongoing basis and revised if management became aware of changes in circumstances surrounding the estimates. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and, if material, their effects are disclosed in the notes to the financial
statements. Application of accounting policies that require critical accounting estimates involving complex and critical judgment is disclosed in
notes to accounts.
C Material accounting policies
i) Property, Plant & Equipment and Depreciation
' Freehold Land is carried at historical cost. All other items of Property, Plant and equipment are stated at cost, less accumulated depreciation and
' accumulated impairment losses, if any.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated ' '
with these will flow to the company and the costs to the item can be measured reliably.
Depreciation on property, plant and equipment is calculated on prorata basis on straight-line method using the useful lives of the assets estimated
by management. The useful life is as follows:
Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on
sale/deduction from property plant and equipment is provided up to the date preceding the date of sale, deduction as the case may be. Gains and
losses on disposals are determined by comparing proceeds with carrying amount. These are included in Statement of Profit and Loss under 'Other
Income' or 'Other Expenses' as the case may be.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as
appropriate.
ii) Impairment of Assets
Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carryingamount
may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis. In such cases, the recoverable amount is determined for the Cash Generating units
(CGU) to which the assets belongs . If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and
loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of asset..
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the
assets no longer exists or have decreased.
iii) Revenue Recognition
' Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is measured at fair value of the consideration
received or receivable. Ind AS 115, Revenue from contracts with customers, outlines a single comprehensive model of accounting for revenu e
' arising from contracts with customers.
The Company recognises revenue from contracts with customers based on a five step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights
and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good
or service to the customer.
' Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance
obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration
to which the Company expects to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.
Sale of Copper wir^ Rod
Revenue is recognised when control of copper products transfers to the customer in an amount that reflects the consideration the company expects to
' be entitled to in exchange for those goods.Revenue from sale of copper rods and wires is recognised in accordance with Ind AS 115 upon transfer of
control to the customer. The transaction price reflects the expected consideration, net of trade discounts and GST.
, Interest Income from Letter of credit
' Where sales are made under Letters of Credit (LC), and the Company discounts such LCs with banks, the corresponding trade receivables are
derecognized at the time of discounting, as the contractual rights to the cash flows are transferred to the bank without recourse, and substantially all
risks and rewards, including credit risk, are also transferred.Interest or charges recovered from customers for the deferred payment period are not
considered a significant financing component under Ind AS 115, and are accounted for separately. Such amounts are recognized as other income based
on the nature of the arrangement and contractual terms.
Other Income:
Any Other Income is recognised in the Statement of Profit and Loss Account as and when accrued.
iv) Inventories
Raw materials, Work-in-progress, finished goods, and stores and spares are valued at lower of cost or net realisable value. However, materials
and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost of raw materials, and stores and spares is determined on a Moving Weighted Average
Cost Method basis.
Work-in-progress and finished goods, are valued at lower of cost or net realisable value. Cost includes direct materials as aforesaid and allocated
production overheads.
The stock of scrap materials have been valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs
necessary to make sale.
v) Taxation
(a) Current Tax
Current tax expense is recognized in statement of profit and loss based on current tax rate in accordance with the provisions of Income Tax Act,
. ' 1961. _
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date,
'and any adjustment to tax payable in respect of previous years.
Current income taxes are recognized under “income tax payable” net of payments on account, or under “tax receivables” where there is a credit
balance.' '
(b) Deferred Tax
Deferred tax is provided in full using the balance sheet method on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
(i) When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
(ii) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the
timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred
tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable
^ profit will be available against which the temporary differences can be utilised.
' The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re¬
assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered. ''
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside the statement of profit and loss is recognized outside the statement of profit and loss (either
in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or direct
^ in equity.
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