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Accounting Policies of FE (India) Ltd. Company

Dec 31, 2013

1.1 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 & Companies Act 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.The accounting policies adopted in the preparation of financial statements have been consistently applied by the Company and are consistent with those used in the previous year except for changes in accounting policies explained below.

1.1 Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles (''GAAP'') in India requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in future periods.

1.3 Operating cycle

The operating cycle is the time between the acquisition of assets for processing/ trading and their realization in cash or cash equivalent and the same is considered as a period of 12 months.

2.4 Tangible Fixed Assets And Depreciation

2.4.1 Fixed assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use.

2.4.2 Depreciation on fixed assets is provided on Straight Line Method based at the rates specified in Schedule XIV to the Companies Act, 1956 or the rates determined as per the useful lives of the respective assets, whichever is higher.

2.4.3 Fixed assets individually costing Rs 5,000 or less are fully depreciated in the year of purchase/ installation. Depreciation on additions and disposals during the period is provided on a pro-rata basis.

2.4.4 The cost of leasehold land is amortised over the period of the lease. Leasehold improvements and assets acquired on finance lease are amortised over the lease term or useful life, whichever is lower.

2.5 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred, Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS S Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Goodwill representing non - compete fee is amortized using the straight-line method over the period of respective agreements for non- compete fee.

Costs relating to software, which are acguired, are capitalized and amortized on a straight line basis over the useful lives of three years.

2.6 Investments

Investments, which are readily realizable and intended to be held for not more than ore year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acguisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of share or other securities, the acquisition cost is the fair value of the securities issued, if an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, which is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

2.7 Inventories

Inventories have been valued at lower of cost or net realizable value. Cost is determined on the basis of first-in-first out method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale,

2.8 Cash and cash equivalents

Cash and Cash Equivalents for the purpose of cash flow statement comprises cash at bank, cheques in hand (other than stale cheques), cash in hand and short term investments with an original maturity of three months or less.

2.9 Foreign Currency Transactions

2.9.1 Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

2.9.2 Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.

2.9.3 Exchange Differences: Exchange differences arising on the settlement of monetary items at rates different from those at which they mere initially recorded during the year, or reported in previous financial statements, are recognized as income or as exDense in the vear in which thev arise.

2.10 Tax Expenses

Income tax expense comprises current tax as per Income Tax Act, 1961, fringe benefit tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date, Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

2.11 Revenue Recogntion

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, In case of outright sales, the revenue is recognized on dispatch of goods to customers which is incidental to transfer of significant risks and rewards of ownership. Sales are stated net of discounts, rebates and returns.

Export sales are recognized on the basis of bill of lading dates and are accounted for at exchange rates as specified in the bill of lading documents.

Export incentives under Duty Exemption Pass Book (DEPB) Scheme, Duty Drawback Scheme, Vishesh Krishi Gram Upaj Yojna (VKGUY), Focus Product Scheme (FPS) etc., are accounted for on accrual basis, i.e. in the year of export of goods or in the year export benefits are announced by the relevant government authority for earlier years, to the extent the realisation of the same is considered certain by the Company.

Commission is recognized as and when the services are rendered.

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

2.12 Earnings Per Share

Basic earning per share is calculated by dividing the ret profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares,

2.13 Employee Benefits

Pursuant to the requirements of AS IS (revised 2005) on "Employee Benefits", issued by the Institute of Chartered Accountants of India (the standard), which has become effective from April 1, 2007, the Company provided for employee benefits as per the revised requirements of the standard for the current quarter. In respect of the employee benefits up to December 31, 2013, the actuarial valuation is being carried out by the management for the recognition of gratuity and leave encashment liability.

Gratuity has been provided on the basis of provisions of Gratuity Act, 1972 and actuarial assumption used by the actuary and leave encashment has been provided on the basis of company policy and actuarial assumption used by the actuary in this regard.

2.14 Commodity Futures contract

The Company enters into commodity futures contracts as a hedge against stocks and trading commitments and its various trading exposures. Principal commodities hedged by these contracts are Barley, RM Seed, Sugar, Ghana & Maize.

Mark-to-market gains/ losses arising from hedging transactions against physical stocks and trading commitments are accounted for on settlement of contracts. Against open position not backed by physical stocks and trading commitments, mark-to-market loss is recognized in the Statement of profit and loss and gain is not accounted for.

2.15 Lease Rentals

Leases of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease rentals under an operating lease are recognised as an expenses on a straight - line basis over the lease term or on a systematic basis that is representative of the time pattern of the user''s benefit.


Sep 30, 2012

1.1 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.The accounting policies adopted in the preparation of financial statements have been consistently applied by the Company and are consistent with those used in the previous year except for changes in accounting policies explained below.

1.2 Changes in Accounting Policies

Presentation and disclosure of financial statements - During the year ended 30 September 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. 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. The Company has also reclassified the previous year''s figures in accordance with the requirements applicable in the current year.

1.3 Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles (''GAAP'') in India requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in future periods.

1.4 Operating cycle

The operating cycle is the time between the acquisition of assets for processing/ trading and their realization in cash or cash equivalent and the same is considered as a period of 12 months.

1.5 Tangible Fixed Assets And Depreciation

1.5.1 Fixed assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use.

1.5.2 Depreciation on fixed assets is provided on Straight Line Method based at the rates specified in Schedule XIV to the Companies Act, 1956 or the rates determined as per the useful lives of the respective assets, whichever is higher.

1.5.3 Fixed assets individually costing Rs 5,000 or less are fully depreciated in the year of purchase/ installation. Depreciation on additions and disposals during the period is provided on a pro-rata basis.

1.5.4 The cost of leasehold land is amortised over the period of the lease. Leasehold improvements and assets acquired on finance lease are amortised over the lease term or useful life, whichever is lower.

1.6 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Goodwill representing non - compete fee is amortized using the straight-line method over the period of respective agreements for non- compete fee.

Costs relating to software, which are acquired, are capitalized and amortized on a straight line basis over the useful lives of three years.

1.7 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of share or other securities, the acquisition cost is the fair value of the securities issued, if an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, which is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long- term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.8 Inventories

Inventories have been valued at lower of cost or net realizable value. Cost is determined on the basis of first-in-first out method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.9 Cash and cash equivalents

Cash and Cash Equivalents for the purpose of cash flow statement comprises cash at bank, cheques in hand (other than stale cheques), cash in hand and short term investments with an original maturity of three months or less.

1.10 Foreign Currency Transactions

1.10.1 Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

1.10.2 Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.

1.10.3 Exchange Differences: Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

1.11 Tax Expenses

Income tax expense comprises current tax as per Income Tax Act, 1961, fringe benefit tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

1.12 Revenue Recogntion

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

In case of outright sales, the revenue is recognized on dispatch of goods to customers which is incidental to transfer of significant risks and rewards of ownership. Sales are stated net of discounts, rebates and returns.

Export sales are recognized on the basis of bill of lading dates and are accounted for at exchange rates as specified in the bill of lading documents.

Export incentives under Duty Exemption Pass Book (DEPB) Scheme, Duty Drawback Scheme, Vishesh Krishi Gram Upaj Yojna (VKGUY), Focus Product Scheme (FPS) etc., are accounted for on accrual basis, i.e. in the year of export of goods or in the year export benefits are announced by the relevant government authority for earlier years, to the extent the realisation of the same is considered certain by the Company.

Commission is recognized as and when the services are rendered.

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.13 Earnings Per Share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.14 Employee Benefits

Pursuant to the requirements of AS 15 (revised 2005) on "Employee Benefits", issued by the Institute of Chartered Accountants of India (the standard), which has become effective from April 1, 2007, the Company provided for employee benefits as per the revised requirements of the standard for the current quarter. In respect of the employee benefits up to September 30, 2012, the actuarial valuation is being carried out by the management for the recognition of gratuity and leave encashment liability.

Gratuity has been provided on the basis of provisions of Gratuity Act, 1972 and actuarial assumption used by the actuary and leave encashment has been provided on the basis of company policy and actuarial assumption used by the actuary in this regard.

1.15 Commodity Futures contract

The Company enters into commodity futures contracts as a hedge against stocks and trading commitments and its various trading exposures. Principal commodities hedged by these contracts are Barley, RM Seed, Sugar, Chana & Maize.

Mark-to-market gains/ losses arising from hedging transactions against physical stocks and trading commitments are accounted for on settlement of contracts. Against open position not backed by physical stocks and trading commitments, mark-to-market loss is recognized in the Statement of profit and loss and gain is not accounted for.

1.16 Lease Rentals

Leases of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease rentals under an operating lease are recognised as an expenses on a straight - line basis over the lease term or on a systematic basis that is representative of the time pattern of the user''s benefit.


Sep 30, 2011

A) Nature of Operations

Financial Eyes (India) Limited ('the Company') is engaged in the business of trading in Agri Commodities / Products.

b) Accounting basis and convention

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on a going concern basis under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

c) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

In case of outright sales, the revenue is recognized on dispatch of goods to customers which is incidental to transfer of significant risks and rewards of ownership. Sales are stated net of discounts, rebates and returns.

Export sales are recognized on the basis of bill of lading dates and are accounted for at exchange rates as specified in the bill of lading documents.

Export incentives have been accounted for on accrual basis.

d) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use.

e) Depreciation

Depreciation on fixed assets is provided on Straight Line Method based at the rates specified in Schedule XIV to the Companies Act, 1956 or the rates determined as per the useful lives of the respective assets, whichever is higher. Individual assets costing less than Rs. 5,000/- are depreciated at the rate of 100%.

f) Investments

Investments are stated in accordance with Accounting Standard-13 issued by the Institute of Chartered Accountants of India. Short Term Investments are stated at cost or market value which ever is less. Long Term Investments are stated at cost.

g) Inventories

Inventories have been valued at lower of cost or net realizable value. Cost is determined on the basis of first-in-first-out method.

h) Foreign Currency Transactions

i.) Initial Recognition : Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii.) Conversion : Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.

iii.) Exchange Differences : Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

i) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

j) Taxes on Income

Income tax expense comprises current tax as per Income Tax Act, 1961 and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

k) Employees Benefits

Pursuant to the requirements of AS 15 (revised 2005) on "Employee Benefits", issued by the Institute of Chartered Accountants of India, the Company provided for employee benefits as per the requirements of the standard for the current period. In respect of the employee benefits up to September 30, 2011, the actuarial valuation is being carried out by the management for the recognition of gratuity and leave encashment liability for the period ending 30th September 2011.

Gratuity has been provided on the basis of provisions of the Gratuity Act, 1972 and actuarial assumption used by the actuary and leave encashment has been provided on the basis of company policy and actuarial assumption used by the actuary in this regard.

l) Provisions & Contingencies

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made


Jun 30, 2010

A) Nature Operations

Financial Eyes (India) Limited (the Company) is engaged in the business of trading in Agri Commodities.

b) Accounting basis and convention

The financial statements are prepared to comply in all material respects with the mandatory Accounting Standard issued by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on a going concern basis under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

c) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

In case of outright sales, the revenue is recognized on dispatch of goods to customers which is incidental to transfer of significant risks and rewards of ownership. Sales are stated net of discounts, rebates and returns.

Export sales are recognized on the basis of bill of lading dates and are accounted for at exchange rates as specified in the bill of lading documents.

Export incentives have been accounted for on accrual basis.

d) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use.

e) Depreciation

Depreciation on fixed assets is provided on Straight Line Method based at the rates specified in Schedule XIV to the Companies Act, 1956 or the rates determined as per the useful lives of the respective assets, whichever is higher. Individual assets costing less than Rs. 5,000/- are depreciated at the rate of 100%.

f) Investments

Investments are stated in accordance with Accounting Standard-13 issued by the Institute of Chartered Accountants of India.

Short Term Investments are stated at cost or market value which ever is less.

Long Term Investments are stated at cost.

g) Stock In Trade

Inventories are valued lower of cost or net realizable value. Cost is determined on the basis of first-in-first-out method.

h) Foreign Currency Transactions

i.) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii.) Conversion

Foreign currency monetary items are reported using the closing rate. Non- monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.

iii.) Exchange Differences

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

i) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilative potential equity shares.

j) Taxes on Income

Income tax expense comprises current tax as per Income Tax Act, 1961, fringe benefit tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

k) Employees Benefits

Pursuant to the requirements of AS 15 (revised 2005) on "Employee Benefits", issued by the Institute of Chartered Accountants of India (the standard),

which has become effective from April 1, 2007, the Company provided for employee benefits as per the revised requirements of the standard for the current quarter. In respect of the employee benefits up to June 30, 2010, the actuarial valuation is being carried out by the management for the recognition of gratuity and leave encashment liability.

Gratuity has been provided on the basis of provisions of gratuity act 1972 and actuarial assumption used by the actuary and leave encashment has been provided on the basis of company policy and actuarial assumption used by the actuary in this regard.

l) Segment Reporting

i.) Segment Revenue & Expenses:

Revenue and Expenses have been identified to a segment on the basis of relationship of the operating activities of the segment. Revenue & Expenses which are not allocable to a segment on a reasonable basis have been disclosed as "Unallocable".

ii.) Segment Assets and Liabilities:

Segment assets and segment liabilities represent assets and liabilities in respective segments. Assets and liabilities which cannot be allocated on the reasonable basis have been disclosed as "Unallocable".

m) Provisions & Contingencies

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

 
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