1. Corporate Information
IO System limited had entered into a joint venture(JV) agreement with
the General Binding Corporation (GBC), USA on 19th june, 1988 for
manufacturing and selling office Automation products. The JV was
terminated with mutual consent between the parties on 31st March, 2002
and now more than 96% capital of the company is held by Spice
Infotainment Ltd. (formerly known as Spice Corp. Ltd.) except little
shareholding with the public. The manufacturing activities had been
discontinued since Feb., 2006 due to continued losses in the company.
The company has also not done very well in its trading business as
result of which, there have been no business activities in the company
during the past five years.
2. Basis of Accounting
The financial statements are prepared under the historical cost
convention on the concept of a going concern, in accordance with the
Generally Accepted Accounting Principles and mandatory Accounting
Standards as notified under the Companies (Accounting Standards) Rules,
2006 and as per the provisions and presentational requirements of the
Companies Act, 1956.
All assets and liabilities have been classified as current or
non-current as per the criteria set out in the ’ General Instructions
for Preparation of Balance Sheet'' of the Revised Schedule VI of the
Companies Act, 1956.
3 Use of estimates
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities on
the date of the financial statements and the results of operations
during the reporting year. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
4 Changes in Accounting policies
The accounting policies adopted are consistent with those of previous
financial year. The management assures that there has been no change in
accounting policies as compared to that of previous year which would
have any significant effect on these financials.
5 Recognition of Income
Income is recognized and accounted for on accrual basis unless
6 Tangible Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which take substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
Depreciation on tangible fixed assets
Each assets costing Rs. 5,000 or less each is 100% depreciated in the
year of purchase. Depreciation is provided using the SLM Method, at the
rates prescribed under Schedule XIV of the Companies Act, 1956.
7 Taxes on Income
Current tax is determined and provided for on the amount of taxable
income at the applicable rates for the relevant financial year.
Deferred Tax Assets and Liabilities (DTA/ DTL) are recognized, subject
to consideration of prudence, on timing differences, being the
difference between taxable income and accounting income that originate
in one period and is capable of reversal in one or more subsequent
periods. The DTA is recognized only to the extent that there is
reasonable certainty of sufficient future profits against which such
DTA can be realized.
8 Contingent Liability
The contingent liabilities, if any, are disclosed in the Notes to
Accounts. Provision is made in the accounts, if it becomes probable
that there will be outflow of resources for settling the obligation.
9 Events occurring after the balance sheet date
Adjustments to assets and liabilities are made for events occurring
after the balance sheet date to provide additional information
materially affecting the determination of the amounts of assets or
liabilities relating to conditions existing at the balance sheet date.
10 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year/ period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year/