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Accounting Policies of R J Shah & Company Ltd. Company

Mar 31, 2015

(a) Use of Estimates.

In preparation of financial statements requires the management to make judgments, estimates and assumption that affect the reported amounts of Assets and Liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period.

Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets as liabilities In future periods.

(b) Fixed Assets:

Fixed Assets are stated at cost and includes amounts added on revaluations less accumulated depreciations and impairment loss, if any. All costs including financing cost till commencement of commercial activities attributable to the Fixed Assets are capitalized.

(c) Depreciation on Tangible Fixed Assets.

(i) Depreciation on Plant and Machinery, Electrical installations and Equipment etc. Is provided on a Straight Line Method over the estimated useful life of assets.

(ii) Effective 1st April 2014, the company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Companies Act 2013, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the companies act 1956.

(iii) Based on terms of the Lease Deed signed as per Orders of the High Court of Judicature at Bombay, the useful life of

building at Wadala has been estimated as 13 years (on a single shift basis), which Is different from that prescribed in Schedule II of the Act.

(iv) In case of pre-owned assets, the useful life is estimated on a case to case basis.

(v) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the month of such addition or upto the month of such sale / discardment, as the case may be.

(d) Impairment of Assets:

An Asset is treated as impaired when the carrying cost of Assets exceeds its reasonable value. An impairment loss is charged to the profit and loss account in the year in which on asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(e) Foreign currency transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transactions.

(f) investments:

The long term investments are stated at cost provision for diminution in the value of the long term investments is made only if such a decline is other than temporary.

(g) Inventories:

The materials and consumables stores are valued at lower of cost or net realizable value. The cost is worked out on FI F 0 basis and the work in progress is valued at contract rate and I or at realizable value.

(h) Revenue recognition:

The work contracts are evaluated at the end of each year on stage completion method. On contract under execution revenue is recognized by evaluation of the work completed at the end of the accounting year. The claim (including escalations) which in the opinion of the management are recoverable on the contract are recognized at the time of evaluation of the work. Various claims, arbitration matters raised by company are subject to negotiation and redetermination. Claims make in respect thereof are accounted as income in the year of receipt of arbitration award and / or acceptance by client or evidence of acceptance received from the Client. Revenue from operations includes sale of scrap, services, service tax and value added tax.

Income from Services: Revenue from, warehousing contracts recognized pro-rata over the period of contract as and when services are rendered.

Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

Dividend: Dividend income is recognized when right to receive is established

(i) Employee Benefits:

As per the past practices and as per the understanding between company and the employees the monthly salary is inclusive of leave salary, gratuity and bonus and the salary is paid inclusive of these benefits to employee every month.

(j) Provision for Current and Deferred Tax:

Provision for current tax is made after taking Into consideration benefits admissible under the provision of the provisions of The Income Tax Act 1961.

Deferred Tax reflect the impact of "timing difference" between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred Tax is measured using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

Deferred Tax liabilities are recognized for all taxable timing differences. Deferred Tax Asset is recognized and cured forward only to the extent that there is a virtual certainty that the asset will be revised in future.

(k) Provisions and contingent liabilities.

A provision is recognized if the Company has present obligation, as a result of past event, that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligations at the reporting date.

Where no reliable estimate can be made, or disclosure is made as contingent liability A disclosure for contingent liability is also made when there is a possible obligation or a present obligation that may, but probable will not require outflow of resources. Where there is possible obligation or a present obligation in respect of which the likely wood of outflow of resources is remote, no provision or disclosure is made. Contingent liabilities are not recognized but are disclosed in the notes.

(l) Earning per Share.

Basic earning per Share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period.






Mar 31, 2014

(a) Use of Estimates.

In preparation of financial statements requires the management to make judgments, estimates and assumption that affect the reported amounts of Assets and Liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period.

Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets as liabilities in future periods.

(b) Fixed Assets :

Fixed Assets are stated at cost and includes amounts added on revaluations less accumulated depreciations and impairment loss, if any. All costs including financing cost till commencement of commercial activities attributable to the Fixed Assets are capitalized. -

(c) Depreciation on Tangible Fixed Assets.

Depreciation on Fixed Assets has been provided on straight line method as per section 2.5 (2) (b) of the Companies Act 1956 for pro-rata period for which the assets is put to use and lease hold land is stated at cost since inception. In respect of assets acquired upto 1.4.1987 on straight line method as per Circular No. 1/86 dated 20.5.1986 issued by the department of Company affairs and in respect of assets acquired from 2nd April 1987 and onwards at straight line method as the rates and in manner specified in schedule XIV of the Companies Act 1956.

(d) Impairment of Assets:

An Asset is treated as impaired when the carrying cost of Assets exceeds its reasonable value. An impaimlent loss is charged to the profit and loss account in the year in which on asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. -

(e) Foreign currency transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transactions.

(f) Investments:

The long term investments are stated at cost provision for diminution in the value of the long term investments is made only if such a decline is other than temporary.

(g) Inventories: .

The materials and consumables stores are valued at lower of cost or net realizable value. The cost is worked out on F I F O basis and the work in progress is valued at contract rate and / or at realizable value.

(h) Revenue recognition:

The work contracts are evaluated at the end of each year on stage completion method. On contract under execution revenue is recognized by evaluation of the work completed at the end of the accounting year. The claim (including escalations) which in the opinion of the management are recoverable on the contract are recognized at the time of evaluation of the work. Various claims, arbitration matters raised by company are subject to negotiation and redetermination. Claims make in respect thereof are accounted as income in the year of receipt of arbitration award and / or acceptance by client or evidence of acceptance received from the Client. Revenue from operations includes sale of scrap, services, service tax and value added tax. Income from Services: Revenue from, warehousing contracts recognized pro-rata over the period of contract as and when services are rendered. -

Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

Dividend: Dividend income is recognized when right to receive is established

(i) Employee Benefits:

As per the past practices and as per the understanding between company and the employees the monthly salary is inclusive of leave salary, gratuity and bonus and the salary is paid inclusive of these benefits to employee every month.

(j) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provision of the provisions of The Income Tax Act 1961.

Deferred Tax reflect the impact of "timing difference" between taxable income and accounting income originating during the current year and reversal of timing

difference for the earlier years. Deferred Tax is measured using the tax rates and laws- that are enacted or substantively enacted as on the balance sheet date.

Deferred Tax liabilities are recognized for all taxable timing differences. Deferred Tax Asset is recognized and cured forward only to the extent that there is a virtual certainty that the asset will be revised in future.

(k) Provisions and contingent liabilities.

A provision is recognized if the Company has present obligation, as a result of past event, that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligations at the reporting date.

Where no reliable estimate can be made, or disclosure is made as contingent liability A disclosure for contingent liability is also made when there is a possible obligation or a present obligation that may, but probable will not require outflow of resources. Where there is possible obligation or a present obligation in respect of which the likely wood of outflow of resources is remote, no provision or disclosure is made.'' Contingent liabilities are not recognized but are disclosed in the notes.

(l) Earning per Share.

Basic earning per Share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period.


Mar 31, 2013

(a) Presentation and disclosure of financial statements.

During the year ended 31st March, 2012 the revised schedule VI notified under the Companies Act, 1956, has become applicable to Company, for preparation and presentation of it''s financial statements. It has significant impact on presentation and disclosures made in the financial statements the Company have reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Use of Estimates.

In preparation of financial statements requires the management to make judgments, estimates and assumption that affect the reported amounts of Assets and Liabilities oh the date of financial statements and the reported amount of revenues and expenses during the reporting period.

Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets as liabilities in future periods.

(c ) Fixed Assets :

Fixed Assets are stated at cost and includes amounts added on revaluations less accumulated depreciations and impairment loss, if any. All costs including financing cost till commencement of commercial activities attributable to the Fixed Assets are capitalized.

(d) Depreciation on Tangible Fixed Assets.

Depreciation on Fixed Assets has been provided on straight line method as per section 2.5 (2) (b) of the Companies Act 1956 for pro-rata period for which the assets is put to use and lease hold land is stated at cost since inception. In respect of assets acquired upto 1.4.1987 on straight line method as per Circular No. 1/86 dated 20.5.1986 issued by the department of Company affairs and in respect of assets acquired from 2nd April 1987 and onwards at straight line method as the rates and in manner specified in schedule XTV of the Companies Act 1956.

(e) Impairment of Assets:

An Asset is treated as impaired when the carrying cost of Assets exceeds its reasonable value. An impairment loss is charged to the profit and loss account in the year in which on asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(f) Foreign currency transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transactions.

(g) Investments:

The long term investments are stated at cost provision for diminution in the value of the long term investments is made only if such a decline is other than temporary.

(h) Inventories:

The materials and consumables stores are valued at lower of cost or net realizable value. The cost is worked out on F IF O basis and the work in progress is valued at contract rate and / or at realizable value.

(i) Revenue recognition:

The work contracts are evaluated at the end of each year on stage completion method. On contract under execution revenue is recognized by evaluation of the work completed at the end of the accounting year. The claim (including escalations) which in the opinion of the management are recoverable on the contract are recognized at the time of evaluation of the work. Various claims, arbitration matters raised by company are subject to negotiation and redetermination. Claims make in respect thereof are accounted as income in the year of receipt of arbitration award and / or acceptance by client or evidence of acceptance received from the Client. Revenue from operations includes sale of scrap, services, service tax and value added tax. Income from Services: Revenue from, warehousing contracts recognized pro-rata over the period of contract as and when services are rendered. Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable. Dividend: Dividend income is recognized when right to receive is established

(J) Employee Benefits:

As per the past practices and as per the understanding between company and the employees the monthly salary is inclusive of leave salary, gratuity and bonus and the salary is paid inclusive of these benefits to employee every month.

(k) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provision of the provisions of The Income Tax Act 1961.

Deferred Tax reflect the impact of "timing difference" between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred Tax is measured using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred Tax liabilities are recognized for all taxable timing differences. Deferred Tax Asset is recognized and cured forward only to the extent that there is a virtual certainty that the asset will be revised in future.

(1) Provisions and contingent liabilities.

A provision is recognized if the Company has present obligation, as a result of past event, that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligations at the reporting date.

Where no reliable estimate can be made, or disclosure is made as contingent liability A disclosure for contingent liability is also made when there is a possible obligation or a present obligation that may, but probable will not require outflow of resources. Where there is possible obligation or a present obligation in respect of which the likely wood of outflow of resources is remote, no provision or disclosure is made. Contingent liabilities are not recognized but are disclosed in the notes.

(m) Earning per Share.

Basic earning per Share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period.


Mar 31, 2010

(i)Revenue Recognition:-

The works contracts are evaluated at the end of each year on stage completion method.. On contracts under execution, revenue is recognised by evaluation of the work completed at the end of the accounting year The claims (including escalations) which in the opinion of the management are recoverable on the contract are recognised at the time of evaluation of the work.

Various claims, arbitration matters raised by the company are subject to negotiations or redetermination. Claims made in respect thereof are accounted as income in the year of receipt of Arbitration Award and/or acceptance by Client or evidence of acceptance received from the Client.

(ii) Valuation of Fixed Assets:-Fixed Assets are valued at cost. In respect of assets scrapped. discarded the book value of such assets after deduction of estimated value is written off as loss .The receipts on sale of assets are accounted for as and when realised (iii) Depreciation-Depreciation of Fixed Assets has been provided on straight line method as per Section 205(2)(b) of the Companies Act, 1956 for pro rata period for which the asset is put to use as under:-

a)ln respect of assets acquired upto 1.4.1987 on straight line method as per Circular No. 1/86 dated 21.05.1986 issued bythe Department of Company affairs.

b)In respect of assets acquired from 2nd April 1987 onwards at straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act.

(iv) Borrowing Cost:-The borrowing costs that are attributable to the acquisition. construction or production of qualifying assets are capitalised as part of cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sell. All other borrowing costs are recognised as an expense in the period in which they are incurred. (v) Valuation of Inventories:-

(a) Materials and consumable stores are valued at lower of cost or net realisable value. The cost is worked out on FIF O basis. (b)Work in progress is valued at contract rate and/or at realisable value.

(vi) Foreign Currency transactions:-The payment for expenditure in foreign currency has been accounted for at exchange rate on the date of payment.

(vii) Retirement Benefits:-Retirement benefits including gratuity and leave salary are provided in the accounts on accrual basis. (viii) Investments :-Investments are stated at cost

(ix) Research and developement:-Capital expenditure on this account are shown as additions to fixed assets. (x) Income Tax:

(a)Provision is made for income tax liability, which is likely to arise on the results for the year at the current rate of tax in accordance with provisions of The Income Tax Act, 1961.

(b)Deferred income tax is provided .using the liability method, on all temporary differences at the Balance Sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. (c)Deferred tax assets are recognised on unabsorbed depreciation only to the extent that there is virtual certainty of their realisation.

(d)Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or subsequently enacted at the Balance Sheet level.

 
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