Corporate Finance

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Vehicles 10

Intangible Assets and Amortization:

Intangible assets are calculated as cost less accumulated amortization and impairment losses, if any.

Class of Intangible Asset Useful lives estimated by the management Amortization method used

Specialized Software 3 years Amortized on a straight-line basis over the period of the Agreement

Mining Rights 10 to 50 years Amortized on a straight-line basis over the period of the License/Agreement

Borrowing Costs:

Borrowing cost includes interest, additional costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs directly related to the acquisition of an asset that will definitely take a period of time to get ready for use, are capitalized as part of the cost of the asset. All borrowing costs are expensed in the year they occur.

Revenue recognition:

Revenue is recognized by the company as when it is probable that the economic benefits will be achieved. Revenue is measured at fair value of consideration received as per the invoice excluding the taxes or duties

Sale of goods: Revenue is recognized when the risk and rewards of the ownership of the goods have been passed to the buyer. Revenue here is measured at a fair value of the consideration received, net of returns and allowances, trade discounts.

Sale of power: Revenue from sale of power is recognized when delivered and is measured based on rates as per bilateral contractual agreements with buyers / at rate, fixed by regulatory body, as applicable.

Income tax

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to or recovered from the taxation authorities. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. Deferred Income Taxes are recognized for the future tax consequences attributable to differences between the financial statement determination of income and their recognition for tax purposes. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which can be realized.

Inventories

Inventories are calculated on the weighted average basis. Finished goods and work-in-progress are valued at lower of cost and net realizable value. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. Net realizable value is the estimated selling price, reduced by the estimated costs of completion and costs that effect the sales.

Cash and cash Equivalents:

Cash and cash equivalents consist of cash at bank and in hand and short-term deposits (3 months or less maturity period), which are subject to an insignificant risk of changes in value

Impairment losses

These losses are recognized in the Statement of Profit and Loss. If in the balance sheet there is an indication of the impairment losses, the company estimates the recoverable amount of the assets.

Investments

This company recognize the investment as the current and noncurrent investments. Those investments that are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments and the rest are the noncurrent investments.

Excise Duty

Excise Duties recovered are included in “Gross Sales”. Excise duty on sales is shown as an item of expense and deducted from Gross Sales in the Profit and loss statement.

Employee Benefits

Retirement benefit in the form of Provident Fund and Superannuation schemes are defined contribution schemes. The company views contribution payable as an expenditure. If the payable has to be done before the balance sheet data exceeds the contribution already payable, the deficit payable to the scheme is recognized as a liability. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset.

Employee Stock Options

Company’s employees also receive remuneration in the form of share based payments whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation method.

Leases

A lease is a contract for certain period which leads to transfer of all risks and rewards incidental to ownership to the company is classified as financial lease. The company is the lessee (One which take any asset in lease). Financial lease is capitalized at the commencement of the lease i.e. at the inception date. Lease payments are divided between financial charges and reduction of lease liability in order to get a constant rate of interest for remaining balance of liability. The value of leased asset is depreciated over the period of time.

When company is the lessor (When company give any asset in lease). In this case company doesn’t transfer all the risks and rewards of ownership of an asset which is termed as Operating leases. Lease income on an operating lease is recognized in the Statement of Profit and Loss on a straight-line basis over the lease term.

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