BASIS FOR PREPARATION OF FINANCIAL STATEMENTS BASIS OF ACCOUNTING
The Financial Statements have been prepared under historical cost
convention on accrual basis and comply with notified accounting
standards as referred to in Section 211(3C) and other relevant
provisions of the per the Companies Act, 1956.
All assets and liabilities have been classsified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in Revised Scheule VI to the Companies Act, 1956.
Based on the nature of the services and their realisation in cash and
cash equivalents, the Company has ascertained its operating cycle as
twelve months for the purpose of current and non-current clasification
of assets and liabilities.
USE OF ESTIMATES
The preparation of the financial statements in conformity with the
accounting standards generally accepted in India requires the
management to make estimates that affect the reported amount of assets
and liabilities, disclosure of contingent liabilities as at the date of
the financial statements and reported amounts of revenues and expenses
for the year. Actual results could differ from these estimates.
The Company is a Small and Medium sized company (SMC) as defined in the
general instructions in respect of accounting standards notified under
the companies Act 1956. Accordingly, the company has compiled with the
accounting standards as applicable to a Small and Medium Sized Company.
VALUATION OF INVENTORY
The company does not have any Inventory as on 31.3.2012.
IMPAIRMENT OF ASSETS
An asset is concerned as impaired in accordance with Accounting
Standard 28 on ''Impair- ment of Assets, when at balance sheet date
there are indications of impairment and the carrying amount of the
asset, or where applicable the cash generating unit to which the asset
belongs, exists is recoverable amount (i.e. the higher of the asset''s
net selling price and value in use). There were no reduction or gain
against the carrying amount to the recoverable amount and no effect for
the impairment is recognized in the profit and loss account.
Contingent liabilities as defined in accounting standard 29 on
provisions, contingent liabilities and contingent assets are
disclosed by way of notes to the accounts. Provision is made if it is
probable that an outflow of future economic benefits will be required
for an item previously dealt with as a contingent liability. There were
no transactions covered under this category and no provision has been
made during this year.
ACCOUNTING FOR TAXES ON INCOME
Income taxes are accounted for in accordance AS 22 Accounting for
Taxes and Income issued by the ICAI. Tax expense comprises both
current and deferred tax. Current tax is measured at the amount
expected to be paid to/ recovered from the tax authorities using the
applicable tax rates. Deferred tax assets and liabilities are
recognized for future tax consequences attributable to timing
difference between taxable income and accounting income that are
capable of reversing in or more subsequent periods and or measured
using relevant enacted tax rates. At each Balance Sheet, the Company
reassesses unrec- ognized deferred tax assets to the extent they have
become reasonably certain or virtu- ally certain of realization, as the
case may be.
Defined Contribution Plan
The Company has defined contribution plans for employees. But there are
no permanent employees during the financial year. Hence there is no
Contributions Paid/Payable to these plans during the financial year.
FOREIGN CURRENCY TRANSACTION
There is no foreign currency transaction during the financial year
2011-12, hence there is no exchange difference.
As The Company has closed down its operation, there are no separate
reportable seg- ments as per Accounting Standard (AS) 17 Segment
In the opinion, of the Board of Directors and to the best of their
knowledge and belief, the value on realization of Current Assets, Loans
and Advances in the ordinary course of business will not be less than
the amount at which they are stated in the Balance sheet.
Confirmation of Balances from certain parties for the amounts due to
them or due from them is yet to be received / reconciled.
For the year ended on March 31, 2012, the company has not generated any
sales revenue from the Plant & Machinery capable of manufacturing 13000
tons P.A of Steel Ingots from Metal Scraps during the financial year
2011-12 but earned only exempted dividend income from the investment in
shares of companies.
The timing differences related mainly to depreciation and unabsorbed
losses and the net effect of such differences will result in deferred
tax asset or liability. The company has not earned any taxable income
hence as a measure of prudence net deferred tax asset relating to the
above period has not been recognized in the accounts.
Since there is no tax liability, no Provision for Income Tax has been
made in the books of accounts as per the provisions of the Income Tax
Payment of Managerial Remuneration and other benefits inclusive of
perquisites not made to the Managing Director and Director against
MICRO, MEDIUM & SMALL ENTERPRISES ACT, 2006.
In spite of the absence of a database identifying Creditors as Small
Scale industrial Undertakings, it is the opinion of the management that
there are no parties, which can be classified as Small Scale industrial
Undertaking to whom the Company owes any sum. The Auditors have
accepted the representation of the management in this matter.
As per the Business Plan prepared by the Management, they are exploring
the possibilities to revive the manufacturing activities along with the
present investment of surplus funds into the diversified projects.
According to the information and explanation given to us, we are of the
opinion that the changes in the Fixed Assets have not affected the
going concern status of the company.
Figures shown in the accounts have been rounded off to the nearest