Home  »  Company  »  Remi Process Pla  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Remi Process Plant & Machinery Ltd. Company

Mar 31, 2014

I) Basis of Accounting

The Financial Statements are prepared under historical cost convention and generally on accrual basis and are in accordance with the requirement of the Companies Act, 1956.

ii) Fixed Assets

Fixed Assets, other than those which have been revalued, are stated at their original cost which includes expenditure incurred in the acquisition and construction/installation and other related expenses. Assets which have been revalued in the earlier years are accounted for at values determined on the basis of such revaluation made by professional valuers. Profit arising on revaluation has been credited to Capital Reserve Account.

iii) Intangible Assets

Expenditure incurred for acquiring software is stated at acquisition cost. They are amortised over their useful life not exceeding five years.

iv) Depreciation

a. Depreciation on fixed assets has been provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions/deductions on Assets during the year is provided on pro-rata basis and for low items costing up to Rs. 5,000/-, 100% depreciation has been provided.

b. In respect of revalued assets, depreciation is provided on the revalued figures and an amount equal to the additional depreciation consequent on such revaluation is charged to Capital reserve.

v) Inventories

a) Raw materials valued at cost or realisable value, whichever is less. Work-in-process is valued at direct cost plus estimated overheads. Scrap has been valued at realisable value.

b) Finished Goods - At direct cost plus estimated overheads or market value whichever is lower.

vi) Investments

Long Term investments are stated at cost, temporary fall in market value, if any, is not provided for.

Current investments are carried at lower of cost or fair value.

(vii) EMPLOYEE RETIREMENT BENEFITS:

1) Post-Employment Employee Benefits

a) Defined Contribution Plans:

The Company has Defined Contribution Plan for Post employment benefits in the form of Provident Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund is classified as defined contribution plan as the Company has no further obligation beyond making the contributions. The Company''s contribution to Defined Contribution Plan is charged to the Profit and Loss Account as and when incurred.

b) Defined Benefit Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees which is administered through Life Insurance Corporation (LIC).

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

2) Other Long-term Employee Benefit:

Liability for Compensated Absences (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit Method in respect of past service.

3) Termination benefits are recognized as an expense as and when incurred.

4) The actuarial gains and losses arising during the year are recognized in the Profit and Loss Account of the year without resorting to any amortization.

viii) Impairment

Impairment of assets are assessed at each Balance Sheet date and loss is recognized whenever the recoverable amount of an asset is less than its carrying amount.

ix) Foreign Currencies Transactions

a) Foreign currency transactions completed during the year are recorded at the exchange rate prevailing at the time of the transaction.

b) Foreign currency transactions remaining unsettled at the year end and not covered by forward contract are translated at the exchange rate prevailing at the year end. Premium/discount on forward contracts are amortized over the period of the contract.

c) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

x) Sales

a) Sales are inclusive of excise duty and Sales tax, and net of return, claims, discounts etc.

b) Sale is recognized at the point of dispatch/billing to customer.

c) Export Sales are shown on FOB basis.

xi) Other Income

a) Service income is recognized on completion of job.

b) Interest income is accounted for on time proportion basis.

c) Rent income is accounted for on time proportion basis.

xii) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalized for the period until the asset is ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

xiii) Taxes

Tax expense for the year comprises of current tax and deferred tax/(credit). Current tax provision has been determined on the basis of reliefs, deductions available under the Income Tax Act. Deferred Tax is recognised for all timing differences between taxable income and accounts income for the reporting period that originate in one period and capable of reversal in one or more subsequent periods, subject to the consideration of prudence, applying tax rates that are applicable on Balance Sheet date.

(xiv) Provisions. Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.2 The Company revalued its factory building, plant & machinery and electric installation in earlier years. Consequently their gross values net of transfers, have increased by Rs. 52,89,706/, Rs. 27,55,912/- and Rs. 3,68,880/- respectively. Depreciation on revalued amount has been directly charged to Capital Reserve account. Consequently Fixed Assets and Reserves & Surplus are still higher by Rs. 13,00,648/- (PY Rs. 14,77,325/-).

1.3 Related parties disclosures:-

1) (a) Key Management Personnel:

Shri Rajendra C. Saraf.

(b) Associate Concerns:

Remi Edelstahl Tubulars Ltd., Remi Elektrotechnik Ltd.,

(c) Relatives of key management personnel and their enterprises where transactions have taken place:

Rajendra Electrical Motor Industries, Rishabh R. Saraf, Ritvik V. Saraf, Minakshi R. Saraf, Vishwambhar C. Saraf, Dholishakti International and Remi International.

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

1.4 Disclosures in accordance with Revised AS - 15 on "Employee Benefits":

(A) Defined Benefits Plans:

(i) The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

(ii) Following are the Principal Actuarial Assumptions used as at the balance sheet date:

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

1.5 Segment information for the year ended 31st March, 2014.

During the year there are no separately identifiable geographical segment hence disclosure as per geographical market is not required.

1.6 Contingent Liabilities not provided for:

a) Guarantees given by the Bankers on behalf of the Company Rs. 2,17,66,780/- (P.Y. Rs. 87,89,889/-).

b) Letters of Credit Rs. 2,78,71,015/- (P.Y. Rs. 15,72,050/-).

c) Sales Tax demands disputed in appeals Rs. 69,16,776/- (P.Y. Rs. 13,483/-).

d) Liability in respect of Lease rent including interest thereon disputed by the Company Rs. 2,54,24,073/- (P.Y. Rs. 2,34,86,874/-).

e) Demand of Excise Duty and penalty disputed in appeal Rs. 19,584/- (P.Y.Rs. 19,584/-).

f) Bills discounting of Rs. NIL (P.Y. Rs. 88,59,364/-).

g) Show cause notice in respect of excise duty amounting to Rs. 5,23,617/- (P.Y Rs. 5,23,617/-).

1.7 Confirmations have not been received of debit and credit balances of the parties'' accounts. Hence, the said balances are as per books of account only.

1.8 In the opinion of the Board, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amounts reasonably necessary. There are no contingent liabilities other than those stated hereinabove.

1.9 The company has exposure to National Spot Exchange Ltd. (NSEL) of Rs. 2,11,56,663/- (Net of w/off) as on 31st March, 2014 for commodity trade. NSEL has not been able to adhere to its payment obligations over the past few months. The Company has pursued legal action against NSEL & others by filing writ petition in Bombay High Court and criminal complaint in Economic Offence Wing (EOW) through NSEL Investors'' Forum, of which company is a member. Based on the information available with the Company, it was decided to write off an amount of Rs. 74,04,140/- in respect of its exposure to NSEL in the quarter ended 30th September, 2013 (current quarter NIL) which is disclosed under the head "Exceptional Items". The Company is hopeful for recovery of the balance amount of Rs. 2,11,56,663/- in view of the steps taken by the EOW of Mumbai Police, legal case in the High Court and steps taken by Govt.

1.10 Details of Micro, Small and Medium Enterprises are not available. As per the management payment to Micro, Small and Medium Enterprises are made in accordance with the agreed credit terms and to the extent ascertained from available information. There is no overdue payable to MSME units beyond the period specified in Micro, Small and Medium Enterprises Development Act, 2006.

1.11 a) Imports of Materials on C.I.F basis Rs. 10,15,872/- (P.Y. Rs. 1,78,71,232/-).

b) Foreign Exchange Earnings:

* FOB Value of Exports Rs. 13,06,788/- (P.Y. Rs. 2,17,795/-).

c) Expenditure in Foreign Currency:

* Travelling Expenses Rs. 6,53,832/- (P.Y. Rs. 6,14,125/-).

* Payment for Material Rs. 16,86,732/- (P. Y. Rs. 3,38,94,034/-).

1.12 Figures within brackets are for previous year and in case of loss same has been shown double brackets.

1.13 Figures have been rounded off to the nearest rupee.


Mar 31, 2010

I) Basis of Accounting

The Financial Statements are prepared under historical cost convention and generally on accrual basis and are in accordance with the requirement of the Companies Act, 1956.

ii) Fixed Assets

Fixed Assets, other than those which have been revalued, are stated at their original cost which includes expenditure incurred in the acquisition and construction/ installation and other related expenses. Assets which have been revalued in the earlier years are accounted for at values determined on the basis of such revaluation made by professional valuers. Profit arising on revaluation has been credited to Capital Reserve Account.

iii) Intangible Assets

Expenditure incurred for acquiring software is stated at acquisition cost. They are amortised over their useful life not exceeding five years.

iv) Depreciation

a. Depreciation on fixed assets has been provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions/deductions on Assets during the year is provided on pro-rata basis and for low items costing up to Rs.5,000/-, 100% depreciation has been provided.

b. In respect of revalued assets, depreciation is provided on the revalued figures and an amount equal to the additional depreciation consequent on such revaluation is charged to Capital reserve.

v) Inventories

a) Raw materials valued at cost or realisable value, whichever is less. Work-in- process is valued at direct cost plus estimated overheads. Scrap has been valued at realisable value

b) Finished Goods - At direct cost plus estimated overheads or market value whichever is lower.

vi) Investments

Long Term investments are stated at cost temporary fall in market value, if any, is not provided for. Current investments are carried at lower of cost or fair value.

(vii) EMPLOYEE RETIREMENT BENEFITS:

1) Post-Employment Employee Benefits

a) Defined Contribution Plans:

The Company has Defined Contribution Plan for Post employment benefits in the form of Provident Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund is classified as defined contribution plan as the Company has no further obligation beyond making the contributions. The Companys contribution to Defined Contribution Plan is charged to the Profit and Loss Account as and when incurred.

b) Defined Benefit Plans:

Funded Plan: The Company has defined benefit plan for Post- employment benefit in the form of Gratuity for all employees which is administered through Life Insurance Corporation (LIC).

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

2) Other Long-term Employee Benefit:

Liability for Compensated Absences (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method in respect of past service.

3) Termination benefits are recognized as an expense as and when incurred.

4) The actuarial gains and losses arising during the year are recognized in the Profit and Loss Account of the year without resorting to any amortization.

viii) Impairment

Impairment of assets are assessed at each Balance Sheet date and loss is recognized whenever the recoverable amount of an asset is less than its carrying amount.

ix) Foreign Currencies Transactions

a) Foreign currency transactions completed during the year are recorded at the exchange rate prevailing at the time of the transaction.

b) Foreign currency transactions remaining unsettled at the year end and not covered by forward contract are translated at the exchange rate prevailing at the year end. Premium/discount on forward contracts are amortized over the period of the contract.

c) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

d) Profit/Loss on foreign exchange derivative contract has been considered in Profit & Loss Account.

x) Sales

a) Sales are inclusive of excise duty and Sales tax, and net of return, claims, discounts etc.

b) Sale is recognized at the point of dispatch/billing to customer.

c) Export Sales are shown on FOB basis.

xi) Other Income

a) Service income is recognized on completion of job.

b) Interest income is accounted for on time proportion basis.

xii) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalized for the period until the asset is ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

xiii) Taxes

Tax expense for the year comprises of current tax and deferred tax/(credit). Current tax provision has been determined on the basis of reliefs, deductions available under the Income Tax Act. Deferred Tax is recognised for all timing differences between taxable income and accounts income for the reporting period that originate in one period and capable of reversal in one or more subsequent periods, subject to the consideration of prudence, applying tax rates that are applicable on Balance Sheet date.

(xiv) Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

 
Subscribe now to get personal finance updates in your inbox!