Annual Report 2010-11

(i) Raw Materials, Packing Materials,
Stores and Spares at monthly
weighted average cost.
(ii) Stock in Process at direct cost and
appropriate portion of overheads.
(iii) Finished Goods:
(a) Manufactured Urea lying at Plant at
Annualised Cost of Production.
(b) Manufactured Urea lying at
warehouses at Annualized Cost of
Production after adjustment of
subsidy determined as per norms
of the Fertilizers Industry
Coordination Committee (FICC).
(c) Imported Urea at procurement
cost determined on weighted
average basis plus direct expenses
less reimbursement of handling
remuneration as fixed by
Government of India (GOI).
(d) Imported Phosphatic/Potassic
Fertilizers at procurement cost
determined on weighted average
basis plus direct expenses after
adjustment of subsidy determined
as per the norms of GOI.
(e) Stocks of seeds, Chemicals and
Indigenous Phosphatic Fertilisers
at procurement cost /production
cost.
(iv) Spares, which are repaired, either
departmentally or through outside
agencies are taken into inventory at a
nominal cost of ` 1/- each.
(B) Net Realisable Value of Finished Goods is
computed as under:
(i) Concession price determined in
accordance with norms of FICC in
respect of urea stocks lying at Plant.
(ii) Estimated selling price in respect of
stocks of fertilisers and other products
lying at warehouses/ports.
(C) The diminution in the value of obsolete,
unserviceable, slow moving and surplus
stores and spares is ascertained on review
and provided for accordingly.
9. REVENUE RECOGNITION
(a) SALE OF GOODS
Sales are recognized upon the transfer of
significant risks and reward of ownership
to the customers, evidenced by issue of
Lifting certificates/Invoices to customers.
(b) CONCESSION FROM GOVERNMENT OF
INDIA
Fertilizers and freight Subsidy from
Government of India under concession
scheme is recognised on a systematic basis
to match with the related costs that they
are intended to compensate.
( c ) OTHER INCOME
(i) Dividend income is recognized when
the right to receive payment is
established. Interest income is
recognized on time proportion basis
taking into account amount
outstanding and rate applicable.
(ii) Interest on delayed payment from
customers, insurance claims, Railway
claims for finished goods, claims
receivable on account of dispatch
money on shipments, Additional
Handling Remuneration, Subsidy on
Seed and Bio-Fertilizers, Right of use
of land and Difference in service
charges receivable from/ payable to
M/s KRIBHCO Shyam Fertilizers Ltd.,
are recognized when no significant
uncertainty exists with regard to the
amount to be realized and ultimate
collection thereof.
(iii) Income from Scrap/ salvage and waste
material is recognised when sold.
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