What is RMG Accounting and Financial System
1.1 Basis of accounting
The financial statements of the Companies of Auto Group shall be prepared under the historical cost convention using the accruals basis of accounting, in accordance with the International Financial Reporting Standards (IFRSs) and International Accounting Standards Management as adopted in Bangladesh. It shall follow the Double Entry System of Book-keeping for recording and accounting of its financial transactions.
1.2 Method of Accounting and Financial System
The book-keeping and accounting of financial transactions of the Companies of Auto Group shall be recorded in the properly designed computerized accounting system.
1.3 Accounting period
The Accounting year of the Companies of Auto Group shall be the fiscal year i.e. 1st July to 30th June each year.
1.4 Accounting policies
1.4.1 Revenue recognition
Revenue shall be measured at the fair value of the products upon invoice and Bill of lading relating to Export Oriented Marketing Policy of the company & be recognized in the normal course of operation.
1.4.2 Inventories
Inventories shall be valued at lower of cost and net realizable value.
1.4.3 Miscellaneous income
Any income received or accrued from any sources other than sales shall be treated as Miscellaneous Income and shall be recognized in the year to which it relates.
1.4.4 Expenditure
Expenditures shall be recognized as expenditure in the year to which it relates. As Accrual Basis of Accounting shall be followed, expenditure incurred but not paid shall also be considered as expenditure in the year in which it was obligated.
1.4.5 Bank charge & commission
Any bank charge or commission paid or deducted by banks for usual banking transactions shall be considered as expense in the year in which it is paid or debited by the bank.
1.4.6 Allocation of expenditure
All expenditures must be classified and segregated under respective head based on the nature of transactions and Chart of Accounts.
1.4.7 Capitalization of expenditure
Property, plant and equipment (Fixed Assets) shall be recorded at cost. (The title of Fixed Assets purchased by the Companies of Auto Group shall belong to the Companies irrespective of sources of the resources out of which it is acquired.
1.4.8 Depreciation policy
The Companies of Auto Group shall follow Diminishing Balance Method in calculating depreciation on its fixed assets. A-full year's depreciation shall be charged on fixed assets in the year in which it is acquired. No depreciation shall be charged on assets during the year of disposal.
1.4.9 Rates of depreciation
Depreciation shall be charged in each financial year on every capital assets at the rate provided below
1.4.10 Fund management
Sales revenue, logistics income, miscellaneous income and any other receipts by the Companies of Auto Group from whatsoever sources shall be deposited directly to the bank account of the Companies.
Receipts in cash shall always be discouraged. The finance department shall immediately prepare credit voucher for such funds received and take proper steps to enter in the books of accounts under respective heads.
All idle funds should be kept in Interest-bearing term deposit account or Fixed Deposit Account as may be beneficial for the organization. The Companies shall invest its idle funds in a form that yields the highest return among the available secured investment choices
1.4.11 Provisions
Provisions shall be recognized when the Company has a present obligation as a result of a past event, and it is probable that-the Company will be required to settle that obligation. Provisions are measured at the management's best estimate of the expenditure required to settle the obligation at the Balance Sheet date.
1.4.12 Employee benefits
The provision should be made in accordance with the Administrative Policy and terms of employment Provisions for long-term benefits likely Gratuity, Provident Fund etc. shall be made on monthly basis to compute the monthly operational results and evaluate the state of affairs of the organization. The long-term benefits shall be paid as and when it is due to the employees. The amount of such provision is to be a part from the Company's fund and invested in accordance with related laws and regulations.
Profit Distribution
Distributable profit of the company will be considered after tax. Such net profit will be distributed as under:
1.1.1.1 20% will be transferred to Reserve Accounting and Financial System
1.1.1.2 20% will be set aside as retained earnings to accommodate the working capital of the company
1.1.1.3 10% will be transferred to profit participation scheme for distribution amongst the working employees as per approved policy.
1.1.1.4 The rest 50% will be considered as payment of dividend Amongst the Shareholders.
Whatever laid down in the policy the distribution of profit and payment of dividend will be effective as per decision of the Board of Directors.
1.4 Financial statements
The Annual Accounting and Financial System Statements of the Companies of Auto Group shall be prepared in accordance with International Financial Reporting Standards (IFRSs) and International Accounting Standards (IAS) as adopted in Bangladesh. The financial statements shall incorporate all income and expenditure and assets and liabilities of the entire cost centre concerning that particular year.
The annual Financial Statements of the Companies of Auto Group should comprise Balance Sheet, Statement of Income and expenditure, Receipts and Payments/cash flow, statement of changes in equity and notes to the Accounting and Financial System Statements.
The Annual Accounting and Financial System Statements of the Companies of Auto Group shall be prepared in accordance with International Financial Reporting Standards (IFRSs) and International Accounting Standards (IAS) as adopted in Bangladesh. The financial statements shall incorporate all income and expenditure and assets and liabilities of the entire cost centre concerning that particular year.
The annual Financial Statements of the Companies of Auto Group should comprise Balance Sheet, Statement of Income and expenditure, Receipts and Payments/cash flow, statement of changes in equity and notes to the Accounting and Financial System Statements.
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