1.1 Basis of Preparation of Financial Statements
Financial Statements have been prepared under the historical cost
convention and in accordance with the provisions of Companies Act,
1956. Accounting Policies not referred to otherwise are consistent and
are in accordance with the generally accepted accounting Principles in
1.2 Use of Estimates
The preparation of Financial Statements are in Conformity with
generally accepted accounting principles requires estimates and
assumptions to be made to that effect the reported amount of Assets and
Liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
the results are known/materialized.
1.3 Fixed Assets
Fixed Assets are valued at Cost less Depreciation.
Depreciation on Fixed Assets has been provided on straight line method
at rates prescribed in schedule XIV of Companies Act, 1956.
Investments which are readily realisable and intended to be held for
less than one year are classified as Current Investments. All other
Investments are classified as long term investments. Current
Investments are carried at lower of cost and fair value determined on
an individual investment basis. Long Term investments are carried at
cost. Provision for diminution in the value of long tem investments is
made only if such a decline is other than temporary in nature in the
opinion of the management.
Stock-in-trade has been valued at cost or market price which ever is
1.7 Taxes on Income
Provision for Taxation is made on the basis of estimated taxable income
for the period at current rates. Tax expenses comprises of both Current
Tax and Deferred Tax at the applicable enacted or substantively enacted
rates. Current Tax represents the amount of Income Tax payable /
recoverable in respect of taxable income / loss for the reporting
period. Deferred Tax represents the effect of timing difference between
taxable income and accounting income for the reporting period that
originates in one year and are capable of reversal in one or more
1.8 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
1.9 Revenue Recognition
Items of Income and Expenditure are recognized and accounted for on
1.10 Contingent Liability, if any, are disclosed by way of Notes.