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Accounting Policies of RNB Industries Ltd. Company

Mar 31, 2015

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. "

USE OF ESTIMATES

In preparing the Financial Statements in conformity with accounting principles generally accepted in India, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of Financial Statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

FIXED ASSETS

Tangible Assets are stated at cost of acquisition less accumulated depreciation. Cost includes all expenses related to acquisition and installation of the concerned assets.

DEPRECIATION

Depreciation of Tangible assets is provided as per Schedule II to the Companies Act 2013 . Due to change in the method of Depreciation , excess depreciation provided amounts to Rs. 1,45,878/-

IMPAIRMENT OF ASSETS

Impairment is ascertained at each Balance Sheet date in respect of the Company's fixed assets. An impairment loss is recognised whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount.

INVENTORIES

"Inventories are valued as under)

a) Completed Flats/ Shops - At lower of cost or market value)

b) Construction work-in-progress - At cost Construction work-in-progress includes cost of land, borrowing costs, construction and development costs and expenses incidental to the projects undertaken by the company."

REVENUE RECOGNITION

The company will follow the Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued in February, 2012 by the Institute of Chartered Accountants of India for revenue recognition of real estate projects. Revenue on real estate projects is recognized on the percentage of completion (POC) method, when :

a) All significant risks and rewards of ownership by way of a legally enforceable agreement to sale have been transferred to the buyer.

b) The outcome of the real estate project can be estimated reliably

c) It is probable that the economic benefits associated with the project will flow to the enterprise

d) The project costs to complete the project and the stage of project completion at the reporting date can be measured reliably

e) The project costs attributable to the project can be clearly identified and measured reliably so that actual project costs incurred can be compared with prior estimates.

Further, the company recognizes revenue on POC on completion of the following events :

a) All critical approvals necessary for commencement of the project have been obtained

b) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development costs

c) At least 25% of the saleable project area is secured by contracts or agreements with buyers, and

d) At least 10% of the total revenue as per the agreements of sale or any other legally enforceable document are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts.

Determination of revenues under the POC method necessarily involves making estimates, some of which are of technical nature. Estimates of project income and project costs are reviewed periodically. The effects of changes, if any, to estimates is recognized in the financial statements for the period in which such changes are determined. When it is probable that total costs will exceed total project revenue, the expected loss is recognized as an expense immediately. Revenue recognized over and above the amount due as per payment plans agreed with the customers, is disclosed as unbilled revenue under Other Current Assets.

EMPLOYEE BENEFITS

Short Term Employees' Benefits are recognised in the statement of Profit and Loss of the year in which related services are rendered.

Post employment and other Long Term Employee Benefits :

(I) Gratuity : Provision for gratuity is not required to be made as none of the employees has completed his five years of continuous services, as per the provisions of The Payment of Gratuity Act, 1972. (ii) Leave Encashment : As per HR Policy Manual employees are entitled for casual leave and sick leave.

There has been no provision for privilege leave entitlement of employees in that manual. (iii) Provident Fund : Provident Fund for most of the employees is a Defined Contribution Scheme, where the Contribution is made to Fund administered by the Government Provident Fund Authority.

TAXES ON INCOME

Income-tax is accounted for in accordance with Accounting Standard(AS-22) - 'Accounting for Taxes on Income ' specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 .

Deferred Tax is provided and recognised on timing differences between taxable income and accounting income subject to prudential consideration.

Deferred Tax assets on unabsorbed depreciation and carry forward losses are not recognised unless there is virtual certanity about availability of future taxable income to realise such assets.

PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised in terms of Accounting Standard(AS-29) - ' Provisions, Contingent Liabilities and Contingent Assets' specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to occurence or non-occurence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an on going basis and only those having a largely probable outflow of resources are provided for. Contingent Assets are not recognised in the Financial Statements.


Mar 31, 2014

"BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, persuant to Section 211(3C) of the Companies Act, 1956 ("the Act") and other relevant provisions of "the Act" thereof.

USE OF ESTIMATES

In preparing the Financial Statements in conformity with accounting principles generally accepted in India, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilitiesasat the date of Financial Statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

FIXED ASSETS

Tangible Assets are stated at cost of acquisition less accumulated depreciation. Cost includes all expenses related to acquisition and installation of the concerned assets.

DEPRECIATION

Depreciation of Tangible assets is provided on "Written Down Value" method at the rates, which are in conformity with the requirements of Schedule XIV of the Companies Act, 1956.

IMPAIRMENT OF ASSETS

Impairment is ascertained at each Balance Sheet date in respect of the Company''s fixed assets. An impairment loss is recognised whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount.

INVENTORIES

Inventories are valued as under

a) Completed Flats/ Shops - At lower of cost or market value

b) Construction work-in-progress - At cost

Construction work-in-progress includes cost of land, borrowing costs, construction and development costs and expenses incidental to the projects undertaken by the company.

REVENUE RECOGNITION

The company will follow the Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued in February, 2012 by the Institute of Chartered Accountants of India for revenue recognition of real estate projects. Revenue on real estate projects is recognized on the percentage of completion (POC) method, when :

a) All significant risks and rewards of ownership by way of a legally enforceable agreement to sale have been transferred to the buyer.

b) The outcome of the real estate project can be estimated reliably

c) It is probable that the economic benefits associated with the project will flow to the enterprise

d) The project costs to complete the project and the stage of project completion at the reporting date can be measured reliably

e) The project costs attributable to the project can be clearly identified and measured reliably so that actual project costs incurred can be compared with prior estimates._

"Further, the company recognizes revenue on POC on completion of the following events :

a) All critical approvals necessary for commencement of the project have been obtained

b) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development costs

c) At least 25% of the saleable project area is secured by contracts or agreements with buyers, and

d) At least 10% of the total revenue as per the agreements of sale or any other legally enforceable document are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts.

Determination of revenues under the POC method necessarily involves making estimates, some of which are of technical nature. Estimates of project income and project costs are reviewed periodically. The effects of changes, if any, to estimates is recognized in the financial statements for the period in which such changes are determined. When it is probable that total costs will exceed total project revenue, the expected loss is recognized as an expense immediately. Revenue recognized over and above the amount due as per payment plans agreed with the customers, is disclosed as unbilled revenue under Other Current Assets."

EMPLOYEE BENEFITS

Short Term Employees'' Benefits are recognised in the statement of Profit and Loss of the year in which related services are rendered.

Post employment and other Long Term Employee Benefits :

(i) Gratuity : Provision for gratuity is not required to be made as none of the employees has completed his five years of continuous services, as per the provisions of The Payment of Gratuity Act, 1972.

(ii) Leave Encashment : As per HR Policy Manual employees are entitled for casual leave and sick leave.

There has been no provision for privilege leave entitlement of employees in that manual.

(iii) Provident Fund : Provident Fund for most of the employees is a Defined Contribution Scheme, where the Contribution is made to Fund administered by the Government Provident Fund Authority.

TAXES ON INCOME

Income-tax is accounted for in accordance with Accounting Standard(AS-22) - ''Accounting for Taxes on Income '' notified pursuant to the Companies (Accounting Standards) Rules, 2006.

Deferred Tax is provided and recognised on timing differences between taxable income and accounting income subject to prudential consideration.

Deferred Tax assets on unabsorbed depreciation and carry forward losses are not recognised unless there is virtual certanity about availability of future taxable income to realise such assets.

PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised in terms of Accounting Standard(AS-29) - '' Provisions, Contingent Liabilities and Contingent Assets'' notified pursuant to the Companies (Accounting Standards) Rules, 2006, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to occurance or non-occurance of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an on going basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the Financial Statements.

d) RIGHTS, PREFERENCES AND RESTRICTIONS ATTACHED TO SHARES:

The Company has only one class of equity share having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting except in case of interim dividend. In the event of Liquidation, the shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.


Mar 31, 2013

(a) system of Accounting:

The financial statements have been prepared under the historical cost convention in accordance with:

(i) The Generally Accepted Accounting Principles.

(ii) The Accounting Standards specified by the Institute of Chartered Accountants of India.

(iii) The Provisions of the Companies Act 1956.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

All financial transactions have been recognized on accrual basis. The management has made the required estimates and assumptions in conformity with Generally Accepted Accounting Principles wherever necessary.

(b) Presentation and disclosure of financial statements:

The Financial Statements has been prepared as per the Revised Schedule VI notified under the Companies Act, 1956. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements.

(c) Fixed Assets:

Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost includes all expenses related to acquisition and installation of the concerned assets.

(d)Inventories:

Inventories are valued at lower of cost and estimated net realisable value.

(e)Investments:

Long Term Investments are valued at cost. Current Investments are valued at lower of the cost or net realisable value.

(f) Revenue Recognition:

Revenue/income and cost/expenditure are generally accounted on accrual basis as they are earned or incurred.

(g) Accounting for Taxes:

Provision for tax is made by using applicable tax rates and tax laws. Deferred tax charge or credit on timing difference is recognized using tax rates and tax laws that has been enacted or substantively enacted as of the Balance Sheet date. Deferred Tax Assets are recognised to the extent there is virtual certainty that there will be sufficient future taxable income available to realise such assets.

(h)Earnings per Share:

Earning per share are calculated by dividing the net profit or net loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the period.

(i)Employee Benefits:

All short term employees'' benefits like salaries, wages, bonus, etc. are recognised in the period in which the employee rendered the related service.

(j) Provisions and Contingencies:

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Contingent liabilities are disclosed in the Notes.


Mar 31, 2012

(a) system of Accounting:

The financial statements have been prepared under the historical cost convention in Accordance with: (I) The Generally Accepted Accounting Principles,

(ii) The Accounting Standards specified by the institute sf Chartered accountants of India (ICAI)

(iii) The provisions of the Companies Act, 1956

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

All financial transactions have been recognized on accrual basis. The management has made the required estimates and assumptions in conformity with Generally Accepted Accounting Principles wherever necessary.

(b) Presentation and disclosure of financial statements:

During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act,1956 has be come applicable to the company,for preparation and presentation of its financial statements. The adoption of Revised Schedule Vl does not impact recognition and measurement principles followed for preparation offinancial statements. Forever, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified and regrouped the previous year figures in accordance with the requirements of Revised Schedule VI.

(c) Revenue Recognition:

Revenue/income and cost/expenditure are generally accounted on accrual basis as they are earned or incurred.

(d) Fixed Assets:

There are no fixed assets

(e) Investments:

Investments are valued at cost,

(f) Accounting for Taxes:

provision for tax is made by applying tax rates and tax laws. Deferred tax charge or credit on timing difference is recognized using current tax rates and tax laws that has been enacted or substantively enacted as ofthe Balance Sheet date" Deferred Tax Assets are recognised to the extent there is virtual certainty that these Assets can be realised in future.


Mar 31, 2010

A) The Company generally follows Mercantile System of Accounting and mainly complles with the mandatory standards Issued by the Institute of Chartered Accountants of India.

b) The Accounts are prepared on historical cost conversion basis and as a going concern. Unless otherwise specially provided the Companys Accounting Policies are consistent with generally accepted accounting policies.

c) Revenue is recognized on accrual basis.

d) There are no fixed assets.

e) Investments represent Equity Shares in unlisted Companies are stated at Cost. These investments are held in the name of the Company. In the previous years printed statement on Notes on Accounts annexed to Balance sheet there was a mention that the investments are not held in the name of the Company which was untrue and was a typographical error. This stood corrected.


Mar 31, 2003

A. The Company generally follows Mercantile System of Accounting and mainly complies with the mandatory standards issued by the Institute of Chartered Accountants of India.

b. The Accounts are prepared on historical cost conversion basis and as a going concern. Unless otherwise specially provided the Companys Accounting Policies are consistent with generally accepted accounting policies.

c. Revenue is recognized on accrual basis.

d. Fixed Assets are stated at cost and inclusive of Direct Expenses

e. Depreciation is not provided in the accounts in view of the losses of the Company.

 
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