A) Basis of preparation of financial statements:
(i) The financial statements are prepared in accordance with Generally
Accepted Accounting Principles (Indian GAAP) under the historical cost
convention on accrual basis and oh principles of going concern. The
accounting policies are consistently applied by the Company
(ii) The financial statements are prepared to comply in all material
respects with the accounting standards notified by the Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of the
Companies Act, 1956.
(iii) The preparation of the financial statements requires estimates
and assumptions to be made that affect the reported amounts of assets
and liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Differences between the actual results and estimates are recognised in
the period in which the results are known / materialise.
B) Fixed Assets & Depreciation:
(i) Fixed Assets are stated at cost, less accumulated depreciation and
impairment losses, if any. Cost comprises of their original cost of
acquisition including preoperative expenses and related expenses of
acquisition and installation.
(ii) Depreciation is provided on Straight Line Method at the rates
specified in Schedule XIV to the Companies Act, 1956 and also on
pro-rata basis, wherever applicable.
(iii) The carrying amounts of assets are reviewed at each balance sheet
date if there is any indication of impairment based on
internal/external factors. An impairment loss is recognised wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the higher of the assets net selling price and
value in use, which is determined by the present value of the estimated
future cash flows.
Long-term investments are carried at cost and provisions are made to
recognize any decline, other than temporary, in carrying value of each
investment. Current investments are carried at lower of cost and fair
D) Revenue Recognition and Expenses:
(i) Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
(ii) Interest income is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable
(iii) All the expenses are accounted for on accrual basis.
E) Retirement Benefits:
No provision is made for Gratuity & Leave Encashment and the same are
accounted for as and when paid.
F) Financial Derivatives and Commodity Hedging Transactions
There are no outstanding forward contracts as at the balance sheet date
and therefore no provision for losses on derivatives is required to be
made by the Company.
G) Borrowing Costs
(i) Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalised for the
period until the asset is ready for its intended use. A qualifying
asset is an asset that necessarily takes substantial period of time to
get ready for its intended use.
(ii) Other Borrowing costs are recognised as expense in the period in
which they are incurred.
H) Taxes on Income:
Tax expense comprises of current tax, deferred tax and fringe benefit
(i) Current tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities, computed in accordance with
the applicable tax rates and tax laws. In case of tax payable as per
provisions of MAT under section 115JB of the Income Tax Act, 1961,
deferred MAT Credit entitlement is separately recognized under the head
Loans and Advances. Deferred MAT credit entitlement isrecognized and
carried forward only if there is a reasonable certainty of it being set
off against regular tax payable within the stipulated statutory period.
(ii) Deferred tax liabilities and assets are recognized at
substantively enacted rates on timing difference between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax asset is
recognized only to the extent there is reasonable certainty with
respect to reversal of the same in future years as a matter of
I) Earnings per Share:
(i) Basic earnings per share is calculated by dividing the net profit
or loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period.
(ii) For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
J) Provision, Contingent Liabilities and Contingent Assets
(i) Provision involving substantial degree of estimation in
measurements is recognized when there is a present obligation as a
result of past events and it is probable that there will be an outflow
(ii) Contingent Liabilities are shown by way of notes to the Accounts
in respect of obligations where, based on the evidence available, their
existence at the Balance Sheet date is considered not probable.
(iii) A Contingent Asset is not recognized in the Accounts.