1. Basis for preparation of Financial Statements
The financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles under the historical cost
convention, on the accrual basis except in the case of certain
financial transactions which are measured on the basis of fair values.
Accounting policies have been consistently applied except where a new
Accounting Standard is newly adopted or a revision is made an existing
2. Revenue Recognition
The Company follows the mercantile system of accounting and recognises
income & expenditure on accrual basis.
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 periods. Although these estimates are based upon
management''s knowledge of current events and actions, actual results
could differ from those estimates and, revisions, if any, are
recognised in the current and future periods.
4. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment if any. Cost includes all identifiable expenditure incurred
to bringing the Assets to its present condition.
Depreciation is provided using the Written Down Value Method, at the
rates and in the manner specified in Schedule XIV to the Companies Act,
6. Provisions and Contingent Liabilities
The Company creates a provision when there exists a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. When there is a possible
obligation or a present obligation in respect of which the likelihood
of outflow of resources is remote no provision or disclosure is made.
Contingent assets are not recognized in financial statements.
All the investments are classified as either current or long-term based
on management''s intention at the time of purchase. Current
investments are carried at the lower of cost or fair value. Long term
investments are carried at cost less provisions made to recognize any
decline other than temporary, in the carrying value of each investment.
8. Impairment of assets
Impairment of assets is recognised when there is an indication of
impairment. On such indication the recoverable amount of the assets is
estimated and if such estimation is less than its carrying amount, the
carrying cost is reduced to recoverable cost.
9. Employee Benefits
The provisions regarding Provident Fund, Employees State Insurance,
Gratuity etc mentioned in Accounting Standard 15 (Employee benefits)
are not applicable to the company at present.
10. Income tax
A provision is made for Income tax annually, based on tax liability
computed after considering tax allowances and exemptions.
11 Earnings per share
Basic Earnings Per Share are 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.
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.