a) Accounting Convention
The financial statements have been prepared to comply in all material
respects with the notified accounting standards by the Companies
(Accounting Standards) Rules 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention, on an accrual basis
The classification of assets and liabilities of the Company is done
into current and non-current based on the operating cycle of the
business of the Company. The operating cycle of the business of the
Company is less than twelve months and therefore all current and
non-current classifications are done based on the status of
realisability and expected settlement of the respective asset and
liability within a period of twelve months from the reporting date as
required by Revised Schedule VI to the Companies Act 1956.
The accounting policies adopted in the preparation of financial
statements are consistent with those used in the previous year, except
for the change in accounting policy explained herein below.
b) Use of Estimates
The preparation of the financial statements in conformity with the
Generally Accepted Accounting Principles applicable in India and the
provisions of the Companies Act,1956 requires that the Management makes
estimates and assumptions that affect the reported amounts of the
assets and liabilities, disclosure of the contingent liabilities as at
the date of the Financial Statements and reported amount of the revenue
and expenses during the reported year. Actual results could defer from
Assets and Liabilities are shown at historical cost and no adjustments
are made for changes in purchasing power of money.
d) Fixed Assets
i) All fixed assets are stated at cost of acquisition, including any
attributable cost for bringing the assets to its working condition for
its intended use, less accumulated depreciation.
e) Depreciation , Amortisation and Impairment
Depreciation on fixed assets is charged on straight line method at the
rates prescribed under Schedule XIV to the Companies Act,1956 except
that depreciation on fixed assets at the Business Centre at the rate of
33 1/3 per cent on the Straight line method.
Impairment of assets is ascertained at each balance sheet date in
respect of the Company''s Fixed Assets. An impairment loss is recognised
whenever carrying amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the net selling price and
value in use, the estimated future cash flows are discounted to their
present value based on an appropriate discount factor.
f) Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalised as a part of such assets.All other
borrowing costs are charged to revenue in the year in which they are
Long term Investments are stated at cost. Provision for diminution is
made to recognise a decline, other than temporary, in value of long
term investments where applicable.
Current Investments are stated at lower of cost and fair value
h) Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at
bank,cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
i) Revenue Recognition
Revenue in respect of insurance / other claims, interest, commission
etc. are recognised only when it is reasonably certain that the
ultimate collection will be made.
j) Contingent Liabilities
These are disclosed by way of notes to the accounts . Provision is made
in respect of those liabilities which are likely to materialise after
the year end, till the finalisation of accounts and have material
effect on the position stated in the Balance Sheet.
k) Employee Benefits
The Company has only one employee who has attained the age of
1. Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
2. Long - Term benefit
(i) Defined Contribution Plan :
a. Provident Fund :
The eligible employee of the Company is entitled to receive post
employment benefits in respect of provident fund, in which both
employee and the Company make monthly contribution at a specified
percentage of the employee''s eligible salary (currently 12 % of
employee''s eligible salary). The contribution is made to Employees
Provident Fund Organisation. Provident Fund is classified as Defined
Contribution Plan as the Company has no further obligation beyond
making the contribution. The Company''s contribution to Defined
Contribution Plan is charged to statement of Profit and Loss as
b. Superannuation :
The Company has made provision @ 15 % of employee''s eligible salary
every year and no contribution is presently made since the employee has
crossed the age of superannuation. The same will be paid to the
employee on his separation.
(ii) Defined Benefit Plan :
a. Gratuity :
The Company has an obligation towards gratuity, a defined benefit
retirement plan covering eligible employee. The plan provides a lump-sum
payment to vested employee at retirement/separation, death while in
employment or on termination of employment of an amount equivalent to
15 days salary payable for each completed year of service. The Gratuity
Fund benefits are administered by a trust formed for this purpose
through Group Schemes of the Life Insurance Corporation of India (LIC).
The Company has made provision on arithmetical basis considering funds
lying which LIC for this purpose.
b. Compensated absences :
The Company provides for the encashment of leave or leave with pay
subject to certain rules. The employee is entitled to accumulate leave
for future encashment / availment. The liability is recognised based on
the number of unutilized leave at each balance sheet date on an
The Company has substantial carry forward of business losses under
Income-tax Act, 1961. However , as the availability of sufficient
future taxable income against which such depreciation and losses can be
set-off cannot be stated to be virtually certain, the deferred tax
asset has not been recognised.