(a) Basis of Accounting:
The financial statements are prepared under historical cost convention
and to comply in all material respect with the notified accounting
standards by the Companies Accounting standard Rules - 2006 and the
relevant provision of Companies Act, 1956. Except AS-6 being
Depreciation Accounting as depreciation has not been provided on all
the assets except Computer.
(b) Fixed Assets
Fixed Assets are stated at cost, except computer stated at cost less
accumulated depreciation. The cost of fixed asset comprise of its
purchase price and any directly attributable cost of bringing the
assets in an operational condition for its intended use.
Depreciation has not been provided at the rates and in the manner
prescribed in Schedule XIV of the Companies act, 1956. Depreciation on
addition or on sale/ disposal of assets is calculated on pro-rata basis
from the date of such addition or sale/ disposal as the case may be.
However no Depreciation has been provided for the year under review
except on computers.
(d) Valuation of Inventories
Stock in trade is valued at cost or net realizable value whichever is
lower. However there is no closing stock at the end of the year.
Long term investments are stated at cost. Provision of diminution in
the value of Long term investments is made only if such decline is
other than temporary in nature in the opinion of the Management.
(f) Revenue Recognition
Sales are recognized when the significant risks and rewards of
ownership of goods have been passed to the buyer, which coincides with
dispatch of goods and Execution of contract of distribution rights.
Purchases are also shown at its purchase/cost of acquisition.
All the income & expenses are accounted on accrual basis except
liability for leave encashment if any, which is accounted for as and
(g) Retirement/ Post retirement Benefits
The company has not made provision for gratuity and leave encashment as
prescribed by the Accounting Standard (AS) – 15(Revised) on Employee
Benefits. In the opinion of the management, none of the employees are
eligible for the benefit of gratuity.
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognized subject to
the consideration of prudence in respect of deferred tax assets on
timing differences, being the difference between the taxable incomes
and accounting income that originate in, one period and are capable of
reversal in one or more subsequent period. Deferred tax assets are
recognized and carried forward only to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
(i) Provisions, Contingent Assets and Contingent Liabilities
A provision involving substantial degree of estimation are recognized
when there is a present obligation as a result of past event and it is
probable that there will be on outflow or resources.