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Moneycontrol.com India | Accounting Policy > Steel - Tubes/Pipes > Accounting Policy followed by Remi Metals Gujarat - BSE: 500365, NSE: REMIMETAL
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Remi Metals Gujarat
BSE: 500365|NSE: REMIMETAL|ISIN: INE731F01037|SECTOR: Steel - Tubes/Pipes
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« Mar 10
Accounting Policy Year : Mar '11
1.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The accounts are prepared on the historical cost convention on accrual
 basis and in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act, 1956.
 
 2.  FIXED ASSETS
 
 Fixed Assets are stated at cost (net of cenvat credit availed) less
 accumulated depreciation. The cost of fixed asset includes cost of
 acquisition, taxes, duties, freight, incidental expenses related to
 acquisition, construction and installation, allocated pre-operative
 expenditure and borrowing cost during the preoperational period.
 
 3.  DEPRECIATION
 
 The depreciation on Fixed Assets is provided on Straight Line Method at
 the rates prescribed in schedule XIV to the Companies Act, 1956.
 Premium on leasehold land is not amortized as the lease is for long
 period.
 
 4.  IMPAIRMENT OF ASSETS
 
 If the carrying amount of fixed assets exceeds the recoverable amount
 on the reporting date, the carrying amount is reduced to the
 recoverable amount. The recoverable amount is measured as the higher of
 the net selling price and the value in use determined by the present
 value of estimated future cash flows.
 
 5.  INVESTMENTS
 
 Long Term Investments are stated at cost less provision for diminution
 in the value which is other than temporary.  Current Investments are
 carried at lower of the cost and fair value.
 
 6.  FOREIGN CURRENCY TRANSACTIONS
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing on the date of transaction.  Any fluctuation
 on account of realisation/payment is accounted as an exchange
 fluctuation. Foreign Currency transactions remaining unsettled at the
 end of the year are converted at the year end rates. Exchange
 differences are dealt within the Profit and Loss account.
 
 Forward contracts are entered into to hedge the foreign currency risk
 of the underlying transaction. The premium or discount on all such
 contracts arising at the inception of each contract is amortised as
 income or expense over the life of the contract. Exchange differences
 on forward contracts are recognised as income or expense in the profit
 and loss account of the year / period. Any profit or loss arising on
 the cancellation and renewal of forward contract are recognised as
 income or expense for the year / period.
 
 7.  REVENUE RECOGNITION
 
 Sales are recognized when risks and rewards of ownership are passed on
 to the customers. Export sales are accounted for on the basis of date
 of bill of lading. Sales are inclusive of excise duty and net of sales
 tax and sales during trial run.  Export benefits are accounted on
 accrual basis.
 
 8.  INVENTORIES
 
 Raw Materials are valued at lower of cost or net realisable value. Cost
 is determined on weighted average basis.
 
 Stores and Spares are valued at cost determined on weighted average
 basis or net realizable value, except for those which have a longer
 usable life, which are valued on the basis of their remaining useful
 life.
 
 Semi Finished and Finished Goods are valued at lower of cost or net
 realisable value. Cost includes raw material, labour, manufacturing
 expenses, allocable overheads and depreciation.
 
 Scrap is valued at net realizable value.
 
 9.  EMPLOYEE BENEFITS
 
 i) Short-term employee benefits are recognized as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 ii) Post employment and other long term employee benefits are
 recognized as an expense in the profit and loss account for the year in
 which the employee has rendered services. The expense is recognized at
 the present value of the amount payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long term benefits are charged to the profit and
 loss account.
 
 10.  PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
 
 A provision is made based on a reliable estimate when it is probable
 that an outflow of resources embodying economic benefits will be
 required to settle an obligation. Contingent liabilities, if material,
 are disclosed by way of notes to accounts. Contingent assets are not
 recognized or disclosed in the financial statements.
 
 11.  BORROWING COSTS
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for its intended use. All other
 borrowing costs are charged to Profit and Loss account.
Source : Dion Global Solutions Limited
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