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Accounting Policies of Rahul Merchandising Ltd. Company

Mar 31, 2014

The Company has issued one class of Equity Shares having a par value of Rs. 10/- each . Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist curently.The distribution will be in proportion to the number of Equity Shares held by the Shareholders.


Mar 31, 2013

I) The financial statements are prepared under the historical cost convention, in accordance with applicable mandatory accounting standards prescribed under the Companies (Accounting Standards), Rules, 2006 and the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non current as per the company''s normal operating cycle and the criteria set out in Revised Schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purpose of current/ noncurrent classification of assets and liabilities.

ii) FIXED ASSETS

All fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes taxes, duties, freight and other identifiable direct cost incurred to bring the assets to their working condition for intended use. Interest on borrowed funds attributable to the qualifying assets up to the period such assets are put to use is included in the cost of fixed assets.

iii) DEPRECIATION

Depreciation on fixed assets is provided on Written Down Value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 on pro rata basis from the date of put to use. In respect of assets sold, discarded etc. during the year, depreciation is provided up to date of sale/discard. Assets costing up to Rs.5000/- each are depreciated fully in the year of purchase.

iv) REVENUE RECOGNITION

Sales are shown net of returns and excluding sales tax wherever applicable.

v) INVENTORIES

Inventories are shown at lower of cost or net realizable value.

vi) INVESTMENTS

Long-term investments are valued at cost with an appropriate provision for permanent diminution in value.

vii) TAXATION

Provision for current tax is made after taking into consideration benefits admissible under the Provisions of the Income Tax Act, 1961.

Deferred tax is recognized subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one of more subsequent periods. Deferred tax assets are recognized only to the extent there is virtual certainty and convincing evidence that there will be sufficient future taxable income available to realize such assets.

viii) IMPAIRMENT OF ASSETS

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment of assets. If any such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts. In case there is any indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the reversal of impairment loss is recognized as income in the profit & loss account.

ix) PROVISIONS/CONTINGENT LIABILITIES

A provision is recognized when the company has a present obligation as a result of a past event and it is probable that an outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation.

A contingent Liability is disclosed after a careful evaluation of the facts and legal aspects of the matter involved where the possibility of an outflow of resources embodying the economic benefits is remote.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

 
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