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Moneycontrol.com India | Accounting Policy > Miscellaneous > Accounting Policy followed by Readymade Steel India - BSE: 533482, NSE: N.A
Readymade Steel India
BSE: 533482|ISIN: INE524L01018|SECTOR: Miscellaneous
, 16:01
-2.4 (-0.87%)
VOLUME 3,022
Readymade Steel India is not listed on NSE
Mar 12
Accounting Policy Year : Mar '13
(a) Basis of Accounting
 The Financial Statements have been prepared and presented under the
 historical cost convention on accrual basis of accounting principles
 generally accepted in India (GAAP) and comply in material respect with
 the mandatory Accounting Standards (AS) issued by the Institute of
 Chartered Acountants of India and notifed under the Companies
 Accounting Statndard Rules, to the extant applicable and with the
 relevant provisions of the Companies Act, 1956 except accounting for
 tax demands and Bonus which are accounted for on Cash Basis.
 (b) Use of estimates
 The preparation of Financial statements in conformity with GAAP
 requires management to make estimates and assumption that affect the
 reported amounts of Assets and Liabilities and disclosure of contingent
 liabilities on the date of the fnancial statements and reported amounts
 of the revenue and expenses for the year. Actual result could differ
 from these estimates is recognised prospectively in the current and
 future periods.
 (c) Fixed Assets
 Fixed Assets are capitalised at acquisition cost and any cost directly
 attributable to bringing the assets to their working condition for the
 intended use.
 (d) Depreciation on fxed assets is provided on straight line method at
 the rates prescribed under Schedule XIV of the Companies Act, 1956.
 (e) Inventories
 Inventories comprising of saleable stock are valued at cost or net
 realisable value, which ever is lower.  Consumbale stock are valued at
 (f) Revenue Recognistion
 Revenue is recognised when the property in the goods is transferred in
 favor of the customer, which normally coincides with the date of
 physical delivery. In case of transit sales where goods are transferred
 by transfer of the documents of title, revenue is recognised on the
 transfer of the document of title.
 Interest on Fixed Deposits is recognised on accrual basis.
 Income from sale of Scrap is accounted on cash basis.
 (g) Foreign currency transactions
 Transactions in foreign currencies are accounted at the prevailing
 exchange rates. Year end balances of payables are translated at
 applicable year end rates and resultant translation differences are
 recognised in the Proft and Loss account.
 (h) Retirement Benefts
 Gratuity expenses are accounted for on accrual basis. Provident fund
 contribution are charged in the year / period the same are incurred.
 (i) Borrowing Costs
 Interest/Finance Cost on loans specifcally borrowed for and expansion
 of projects, upto the point when the project is ready for start of
 commercial production is charged to the capital cost of the projects
 concerned. All other borrowing costs are charged to revenue.
 (j) Impairment of Assets
 Consideration is given at each balance sheet date to determine whether
 there is any indication of impairment of the carrying amount of the
 Company''s fxed assets. If any indication exists, an asset''s recoverable
 amount is estimated. An impairment loss is recognised whenever the
 carrying amount of the asset exceeds its recoverable amount.The
 recoverable amount is the greater of the net selling price and value in
 use.In assessing value in use, the estimated future cash fows are
 discounted to their present value based on an appropriate discount
 (k) Prior period and extraordinary items
 The nature and amount of prior period items and extraordinary items are
 seperately disclosed in the statement of proft and loss in a manner
 that their impact on current proft and loss account can be perceived.
 (m) Income Tax expenses
 Income Tax expense comprise of current tax and deferred tax charge or
 Current Tax
 The current charge for Income taxes is calculated in accordance with
 the relevant tax regulations applicable to Company.
 Deferred Tax
 Deffered Tax charge or credit refects the tax effects of timming
 difference between accounting income and taxable income for the period.
 The deferred tax charges or credit and the corresponding deferred tax
 liabilities or assets are recognised using the tax rates that have been
 enacted or substantially enacted by the balance sheet date. Deferred
 tax assets are recognised only to the extent there is reasonable
 certainty that the assets can be realised in future; however, where
 there is unabsorbed depreciation or carry forward losses, deferred tax
 assets are recognised only if there is a virtual certainty of
 realisation of such assets. Deferred tax assets are reviewed at each
 balance sheet date and is written -up to refect the amount that is
 reasonably or virtually certain, as the case may be, to be realised in
 The break-up of the major components of the deferred tax assets and
 liabilities as at balance sheet date has been arrived at after setting
 off deferred tax assets and liablities where the Company has a legally
 enforceable rights to set-off assets against liabilities and where such
 assets and liabilities relate to taxes on income levied by the same
 governing taxation laws.
 (n) Earnings per Share
 The basic Earnings Per Share (EPS) is computed by dividing the
 annualised net proft after tax for the period by the weighted average
 number of equity shares outstanding as at the end of the period. For
 the purpose of calculating diluted earnings per share, net proft after
 tax for the period and the weighted average number of outstaning during
 the year are adjusted for the effects of all dilutive potential equity
 shares. The dilutive potential equity shares are deemed converted as of
 the beginning of the period, unless they have been issued at a later
 date. The dilutive potential equity shares have been adjusted for the
 proceeds receivable had the shares been actually issued at fair value
 (i.e. the average market value of the outstanding shares).
 (o) Provisions, Contingent liability and Assets
 Provisions are recognized in terms of Accounting
 Standard-29Provisions,Contingent Liabilities and Contingent Assets,
 issued by the Institute of Chartered Accountants of India, where there
 is a present legal or statutory obligation as a result of past events,
 where it is probable that there will be outfow of resources to settle
 the obligation and when a reliable estimate of the amount of the
 obligation can be made.
 Contingent Liabilities are recognized only when there is a possible
 obligation from past events due to occurrence or non- occurrence 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 outfow of resources or where a reliable estimate of the
 obligation cannot be made. Obligations are assessed on an ongoing basis
 and only those having a largely probable outfow of resources are
 provided for.
 Contingent Assets are neither recognised nor disclosed. 
 (p) The company has incurred expenses on account of Preliminary and
 pre-operative expenses, other than issue expenses.
 The beneft of these expenses are likley to be availed by the company
 over a period. Hence the same are not charged off fully but are
 amortised over the period of benefts.  (q) Investment in equity of
 subsidiaries are accounted for as long term investments and are carried
 at cost
Source : Dion Global Solutions Limited
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