Accounting Policies of REI Six Ten Retail Ltd. Company

Mar 31, 2015

(i) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared as a going concern on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for depreciation as more fully stated in Note 10

(ii) USE OF ESTIMATES:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.

(iii) TANGIBLE FIXED ASSETS :

a) Fixed Assets are recorded at cost of acquisition inclusive of incidental expenses related to acquisition but shown after impairment if any.

b) When assets are sold or discarded, their cost and accumulated depreciation are removed from fixed assets and any gain/loss resulting there from is reflected in profit & loss account.

(iv) INTANGIBLE ASSETS :

Acquired Intangible Assets represents Software and is recorded at its acquisitions price and related expenses thereon is amortized over its estimated useful life on straight-line basis, commencing from the date, the asset is available for its use. The Management has estimated the useful life for such software as 3 {Three} Years. The useful life of the Assets are reviewed by the management at each Balance Sheet Date.

(v) DEPRECIATION:

Depreciation on Fixed Assets has been provided as per Useful life of Assets after considering the impairment, if any, at rates specified in Schedule II of the Companies Act, 2013.

(vi) IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(vii) INVENTORIES :

Inventories if any are valued at cost or net realizable value whichever is lower.

(viii) BORROWING COSTS:

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use of sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.

(ix) REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

(x) EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i) Defined Contribution Scheme- This benefit includes contribution to Employee's State Insurance Corporation {ESI} and Provident Fund Contribution {PF} to the Regional Provident Fund Commissioner. These contributions are defined as an expense in the Profit & Loss account as and when such contributions are due.

ii) Defined Benefit Scheme- For Gratuity and Compensated Leave-

The Company was recording its liability for Gratuity and compensated leave to its employees based on actuarial valuation as at the balance Sheet date, using the projected unit credit method. Effects of changes in actuarial valuations were immediately recognized in the Profit & Loss account. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets, if any. Actuarial gains/ losses are recognized in full, during the year in which they occur. During the year, since there are no employee on the payroll of the company, as such provision of gratuity has not been required.

(xi) TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

(xii) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made of the amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

(xiii) EARNING PER SHARE:

Basic earning per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earning per Share are computed after adjusting the effects of all dilutive potential equity shares if any.

(xiv) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include cash in hand and at Bank, Fixed Deposit and Margin Money with Banks.

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Mar 31, 2014

1) CORPORATE INFORMATION

REI Six Ten Retail Limited (RSTRL) was incorporated in March 2007 as Retail chain. The first SixTen stores were set up as part of REI Agro Limited. The business of retail was demerged into RSTRL since August 2007. The Company initially set up stores in the ''Company Owned Company Operated'' (COCO) model. However, with a view to increase the efficiency, the company franchised all its stores and the logistics were also being handled by Master Franchisees. Since 1st January, 2014 the Company has discontinued with its retail franchisee model and only operates wholesale cash and carry model.

2) (i) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting and comply with all mandatory accounting standards as specified in the Companies (Accounting Standard) Rules 2006 and the relevant provisions of Companies Act, 1956.

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management''s best knowledge of current events and actions, the Company may undertake in future, actual results ultimately may differ from the estimates.

As stated in paragraph 1 above, the Company has significantly changed its business model and has closed all its retail franchisee model and continue with wholesale cash and carry model. This changeover entailed significant write off of Fixed Assets and Debtors. The management is confident that inspite of the significant loss incurred during the current financial year,the new business model of wholesale cash and carry will generate significant cash flows to sustain the operations of the Company in the long run. Accordingly, the Financial Statements have been prepared on a Going Concern Basis.

(ii) TANGIBLE FIXED ASSETS:

a) Fixed Assets are recorded at cost of acquisition inclusive of incidental expenses related to acquisition but shown after impairment if any.

b) When assets are sold or discarded, their cost and accumulated depreciation are removed from fixed assets and any gain/loss resulting there from is reflected in profit & loss account.

(iii) INTANGIBLE ASSETS:

Acquired Intangible Assets represents Software and is recorded at its acquisitions price and related expenses thereon is amortized over its estimated useful life on straight-line basis, commencing from the date, the asset is available for its use. The Management has estimated the useful life for such software as 3 {Three} Years. The useful life of the Assets are reviewed by the management at each Balance Sheet Date.

(iv) DEPRECIATION:

Depreciation on Fixed Assets has been provided as per Straight Line Method (SLM) after considering the impairment at rates specified in Schedule XIV of the Companies Act, 1956.

(v) IMPAIRMENT OF ASSETS:

The company tests on annual basis the carrying amount of the asset for impairment so as to determine.

a) The provision for impairment loss if any, or

b) The reversal, if any, required on account of impairment loss recognized in previous periods.

(vi) INVENTORIES:

Inventories if any are valued at cost or net realizable value whichever is lower.

(vii) BORROWING COSTS:

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use of sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.

(viii) REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

(ix) EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i) Defined Contribution Scheme- This benefit includes contribution to Employee''s State Insurance Corporation (ESI) and Provident Fund Contribution (PF)to the Regional Provident Fund Commissioner. These contributions are defined as an expense in the Profit & Loss account as and when such contributions are due.

ii) Defined Benefit Scheme-For Gratuity and Compensated Leave.

The Company was recording its liability for Gratuity and compensated leave to its employees based on actuarial valuation as at the balance Sheet date, using the projected unit credit method. Effects of changes in actuarial valuations are immediately recognized in the Profit & Loss account. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets, if any. Actuarial gains/losses are recognized in full, during the year in which they occur. During the year, since there is one employee left as such provision of gratuity has been provided as per law and actuarial valuation has not been done.

x) TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

xi) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made of the amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

xii) EARNING PER SHARE:

Basic earning per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earning per Share are computed after adjusting the effects of all dilutive potential equity shares if any.

(xiii) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include cash in hand and at Bank, Fixed Deposit and Margin Money with Banks.

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Mar 31, 2013

1.1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting and comply with all mandatory accounting standards as specified in the Companies (Accounting Standard) Rules 2006 and the relevant provisions of Companies Act, 1956.

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management''s best knowledge of current events and actions, the Company may undertake in future, actual results ultimately may differ from the estimates.

1.2) FIXED ASSETS :

a) Fixed Assets are recorded at cost of acquisition inclusive of incidental expenses related to acquisition.

b) When assets are sold or discarded, their cost and accumulated depreciation are removed from fixed assets and any gain/loss resulting there from is reflected in profit & loss account.

1.3) INTANGIBLE ASSETS :

Acquired Intangible Assets represents Software and is recorded at its acquisitions price and related expenses thereon is amortized over its estimated useful life on straight-line basis, commencing from the date, the asset is available for its use. The Management has estimated the useful life for such software as 3 {Three} Years. The useful life of the Assets shall be reviewed by the management at each Balance Sheet Date.

1.4) DEPRECIATION:

Depreciation on Fixed Assets has been provided as per Straight Line Method (SLM) at rates specified in Schedule XIV of the Companies Act, 1956.

1.5) INVENTORIES :

Inventories are valued at cost or net realizable value whichever is lower, less VAT where applicable.

1.6) REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

1.7) IMPAIRMENT OF ASSETS:

The company tests on annual basis the carrying amount of the asset for impairment so as to determine -

a) The provision for impairment loss if any, or

b) The reversal, if any, required on account of impairment loss recognized in previous periods.

1.8) EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i) Defined Contribution Scheme - This benefit includes contribution to Employee''s State Insurance Corporation {ESI} and Provident Fund Contribution {PF} to the Regional Provident Fund Commissioner. These contributions are defined as an expense in the Profit & Loss account as and when such contributions are due.

ii) Defined Benefit Scheme- For Gratuity and compensated leave- The Company records its liability for Gratuity and compensated leave to its employees based on actuarial valuation as at the Balance Sheet date, using the projected unit credit method. Effects of changes in actuarial valuations are immediately recognized in the Profit & Loss account. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets, if any. Actuarial gains/losses are recognized in full, during the year in which they occur.

1.9) TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

1.10) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made of the amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

1.11) EARNING PER SHARE:

Basic earnings per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earnings per Share are computed after adjusting the effects of all dilutive potential equity shares.

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Mar 31, 2012

1.1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting and comply with all mandatory accounting standards as specified in the Companies (Accounting Standard) Rules 2006 and the relevant provisions of Companies Act, 1956.

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management,s best knowledge of current events and actions, the Company may undertake in future, actual results ultimately may differ from the estimates.

1.2) FIXED ASSETS :

a) Fixed Assets are recorded at cost of acquisition inclusive of freight, duty, taxes and incidental expenses related to acquisition.

b) When assets are sold or discarded, their cost and accumulated depreciation are removed from fixed assets and any gain/loss resulting there from is reflected in profit & loss account.

1.3) INTANGIBLE ASSETS :

Acquired Intangible Assets represents Software and is recorded at its acquisitions price and related expenses thereon is amortised over its estimated useful life on straight-line basis, commencing from the date, the asset is available for its use. The Management has estimated the useful life for such software as 3 (Three) Years. The useful life of the Assets shall be reviewed by the management at each Balance Sheet Date.

1.4) DEPRECIATION/AMORTISATION :

Depreciation on Fixed Assets has been provided as per Straight Line Method (SLM) at rates specified in Schedule XIV of the Companies Act, 1956.

1.5) INVENTORIES :

Inventories are valued at cost or net realizable value whichever is lower, less VAT where applicable.

1.6) REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

1.7) IMPAIRMENT OF ASSETS:

The company tests on annual basis the carrying amount of the asset for impairment so as to determine -

a) The provision for impairment loss if any, or

b) The reversal, if any, required on account of impairment loss recognized in previous periods.

1.8) EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i) Defined Contribution Scheme- This benefit includes contribution to Employee,s State Insurance Corporation {ESI} and Provident Fund Contribution (PF) to the Regional Provident Fund Commissioner. These contributions are defined as an expense in the Profit & Loss account as and when such contributions are due.

ii) Defined Benefit Scheme- For Gratuity and compensated leave- The Company records its liability for Gratuity and compensated leave to its employees based on actuarial valuation as at the balance Sheet date, using the projected unit credit method. Effects of changes in actuarial valuations are immediately recognized in the Profit & Loss account. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets, if any. Actuarial gains/losses are recognized in full during the year in which they occur.

1.9) TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

1.10) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made of the amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

1.11) EARNING PER SHARE:

Basic earning per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earning per Share are computed after adjusting the effects of all dilutive potential equity shares.

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Mar 31, 2011

1) DEPRECIATION/AMORTISATION:

Depreciation on Fixed Assets has been provided as per Straight Line Method (SLM) at rates specified in Schedule XIV ofthe Companies Act, 1956.

2) INVENTORIES:

Inventories are valued at cost or net realizable value whichever is lower, less VAT where applicable.

3) REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

4) IMPAIRMENT OF ASSETS:

The company tests on annual basis the carrying amount ofthe asset for impairment so as to determine -

a) The provision for impairment loss if any, or

b) The reversal, if any, required on account of impairment loss recognized in previous periods.

5) EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i) Defined Contribution Scheme- This benefit includes contribution to Employee's State Insurance Corporation {ESI} and Provident Fund Contribution {PF} to the Regional Provident Fund Commissioner. These contributions are defined as an expense in the Profit & Loss account as and when such contributions are due.

ii) Defined Benefit Scheme- For Gratuity and compensated leave-

The Company records its liability for Gratuity and compensated leave to its employees based on actuarial valuation as at the balance Sheet date, using the projected unit credit method. Effects of changes in actuarial valuations are immediately recognized in the Profit & Loss account. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets. Actuarial gains/losses are recognized in full during the year in which they occur.

6) TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

7) PROPOSED DIVIDEND:

Dividend proposed by the Board of Directors is provided in the books of accounts pending approval at the Annual General Meeting.

8) PROVISIONS, CONTINGENT LIABILITIES* CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made ofthe amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

9) EARNING PER SHARE:

Basic earning per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earning per Share are computed after adjusting the effects of all dilutive potential equity shares.

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Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting and comply with all mandatory accounting standards as specified in the Companies (Accounting Standard) Rules 2006 and the relevant provisions of Companies Act, 1956.

The preparation of financial statements is in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on managements best knowledge of current events and actions, the Company may undertake in future, actual results ultimately may differ from the estimates.

2. FIXED ASSETS:

a) Fixed Assets are recorded at cost of acquisition inclusive of freight, duty, taxes and incidental expenses related to acquisition.

b) When assets are sold or discarded, their cost and accumulated depreciation are removed from fixed asset and any gain/loss resulting therefrom is reflected in profit & loss account.

3. DEPRECIATION:

Depreciation on Fixed Assets has been provided as per Straight Line Method (SLM) at rates specified in Schedule XIV of the Companies Act, 1956.

4. INVENTORIES:

Inventories are valued as under:

a) Inventories are valued at cost or net realizable value whichever is lower.

b) Packing Material etc, if any, are valued at cost less VAT where applicable.

5. REVENUE RECOGNITION:

a) Sales are recognized when goods are supplied to customers and are recorded net of trade discounts, rebates, VAT etc.

b) Other items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is accounted when it is measured with certainty.

c) Interest on Fixed Deposits is booked on time proportion basis taking into account the amount invested and rate of interest.

6. IMPAIRMENT OF ASSETS:

The company tests on annual basis the carrying amount of the asset for impairment so as to determine -

a) The provision for impairment loss if any, or

b) The reversal, if any, required on account of impairment loss recognized in previous periods.

7. EMPLOYEE BENEFITS:

a) Short Term Employees Benefits:

The undiscounted amount of short term employee benefits, expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee remain under the service. This benefit includes salary, wages, short term compensatory absences and bonus.

b) Long Term Employee Benefits:

i. Defined Contribution Scheme- This benefit includes contribution to Employees State Insurance Corporation and Provident Fund scheme. The contribution is recognized during the year in which the employee rendered service.

ii. Defined Benefit Scheme- For defined benefit scheme the cost of providing benefit is determined using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The retirement benefit obligation recognized in the balance sheet represents value of defined benefit obligation as reduced by the fair value of planned assets. Actuarial gains and losses are recognized in full during the year in which they occur.

8. TAXES ON INCOME:

a) Current Tax is determined as the amount of tax payable as per Income Tax Act, 1961.

b) Deferred Tax liability if any is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference in one year and are capable of reversal in one or more subsequent years.

c) Fringe Benefit Tax is provided in the accounts as per applicable rules.

9. PROPOSED DIVIDEND:

Dividend proposed by the Board of Directors is provided in the books of accounts pending approval at the Annual General Meeting.

10. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a) The Company creates a provision when there is present obligation as a result of past events that probably require an outflow of resources and a reliable estimate can be made of the amount of obligation.

b) Contingent Liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where the likelihood of the outflow of resources is remote, no disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in financial statements.

11. EARNING PER SHARE

Basic earning per share is computed by dividing, the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted Earning per Share are computed after adjusting the effects of all dilutive potential equity shares.